KORAB RESOURCES LIMITED — Management Reports 2018

Mar 20, 2018

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K O RA B R E SO U RC E S LIMI T ED KORAB H OUSE www.korab.co m .au

21 Ma r ch 2018

Issue d Capital

Shares: 299 Mln Last Price: 3.4 cents Capital: $ 10.17 Mln

Listing Codes ASX: KOR BERLIN: C6S.BE

D irectors

Andrej K. Karpinski Executive Chairman Director

Rodney H. Skeet Non-ex e cutive Director

Daniel A. Smetana Non-ex e cutive Director

Anthony G. Wills Non-ex e cutive Director

P rojects

Winchester (Rum Jungle, NT) Magne s ium carbonate (MgCO3)

Geolsec (Rum Jungle, NT) P hosphate rock (P2O5)

Batchelor (Rum Jungle, NT) Au, Ag, Zn, Pb, Ni, Cu, Co, Sc, Mn

Mt. Elephant (Ashburton, WA) Au, Cu Karratha (Pilbara, WA) Au, Co, Cu

Marble Bar/Nullagine (Pilbara, WA) Au, Co, Cu, Li

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WIN C HESTER MAGNESITE DIRE C T SHIPPING ORE F EASIBILITY STU D Y RESU L TS (EAR N INGS, N P V, EBIT D A, CAPE X , AND O P EX)

Korab Resources L t d (“Korab”, o r “Company” ) (ASX: KOR) is pleased t o provide the results of th e updat e of the pre-f e asibility stud y to develop W inchester m a gnesite dep o sit as a dire c t shipping or e (DSO) operation. T h is study was c ompleted by the Compan y using information collated and prepare d by Golder Associates Pty Ltd, t he Compan y , URS, Bate m an Tenova, and Devmi n Consultants. Following the current update, this is now a f easibility lev e l study; how e ver, for risk management reaso n s the Compa n y believed it would be pru d ent to contin u e using the o riginal accur a cy of the cost estimates of +/-30 % and cons e quently a 3 0 % contingency has bee n added to a ll capital an d operat i ng costs.

Assu m ptions and inputs (minin g work rate s , excavation and earthm o ving costs, labour costs, maint e nance costs, equipment a nd consuma b les costs, loading, haula g e, handling, port charges, shippi n g costs, selli n g costs, sell i ng prices, as well as othe r input variabl e s) underpin n ing this stud y which generated t h e NPV, gro s s earnings, EBITDA, cashflow, and c a pital and o p erating cost s estimates were s o urced from appropriate consultants, contractors, and potenti a l magnesiu m carbo n ate buyers. W hilst the ag g regate estim a tes of all co m ponents of o perating co s ts and capit a l costs a re provided further in this r eport (see T a ble 8, and T able 5), the specific detailed work rate s and p r ices, which w ere quoted b y third partie s are comme r cially sensiti v e and are n o t disclosed i n this re p ort.

This e x panded stud y which inclu d ed the estim a tes of reven u es and vario u s additional material cost s such a s haulage, p ort charges, interest, deb t repayment, royalties, ov e rheads, etc. evaluated th e econo m ics of Winc h ester quarry a ssuming its d evelopment a s a direct sh i pping ore (D S O) operation. Inclusi o n of additional information allowed esti m ation of earnings and net p resent value of the project .

The results of the feasibility study without inclu s ion of the ab o ve additiona l factors were announced t o the market on 7 March 2018. The Comp a ny confirms that all ma t erial assum p tions in that annou n cement continue to apply and have no t materially c h anged. The s tudy results released on 7 March 2018 contai n ed estimate s of capital ( C APEX) and operating c o sts (OPEX) o f Winchester projec t supplying a d irect shippin g ore.

As pa r t of this current update, th e Company e v aluated the b enefits of uti l ising automa t ic mineral or e sorter to sort crus h ed rock into multiple str e ams which w ould reduce the volume of waste an d increa s e the proportion of saleabl e product.

The o u tput from the quarry woul d consist of c r ushed magn e site rock wit h a waste str e am consistin g of ma g nesite fines, dolomite, ta l c, and wast e rock (inclu d ing polymet a llic ores), w h ich would b e stored on site. The e stimated rati o of coarse s a leable magnesite rock to f ines used in t his study wa s 80%. T he study re v ealed that th e re may be a market for m agnesite fin e s, dolomite, talc, and other waste rock; howeve r any potential revenue fro m sale of thes e has not been included in t his study.

This i s an update of the study results initially released t o the marke t on 10 Mar c h 2015. Th e Comp a ny confirms t hat, other th a n disclosed elsewhere in this report, all the material assumption s under p inning the p r oduction tar g et or the for e cast financi a l information derived fro m a productio n target i n the initial p u blic report c o ntinue to apply and have n o t materially c hanged.

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20 P R OWSE STRE E T, WEST PE R TH, WA, 600 5 , AUSTRALIA PO B OX 1958, WE S T PERTH, W A , 6872, AUST R ALIA TEL ( 08) 9474 6166 FAX (08) 93 2 2 6333 ACN 082 140 252 PAGE 1

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Issue d Capital

Shares: 299 Mln Last Price: 3.4 cents Capital: $ 10.17 Mln

Listing Codes ASX: KOR BERLIN: C6S.BE

K O RA B R E SO U RC E S LIMI T ED KORAB H OUSE www.korab.co m .au

This s t udy is based solely on in d icated miner a l resource. I n ferred miner a l resource s h own in Tabl e 11 was not used i n the estima t ion of the p r oduction target, or the fo r ecast financial informatio n derive d from the pr o duction targ e t. The estimated mineral resources u n derpinning t h is study hav e been p repared by a competent p e rson or persons in accordance with th e requirement s in the JOR C Code.

Deposit is located s o uth of Darwi n in the Northern Territory, approximatel y 85km by ro a d, less than a hundr e d meters fro m sealed roa d , and less t h an 5km fro m railway line. For location of the project please see Figure 1, and Figur e 5. The de p osit is a shallow, flat layin g body covered by up to 5 meter s of unconsoli d ated soil an d gravel over b urden. Figur e 4 shows th e test mining o f magnesiu m carbo n ate rock at W inchester. S urface (top of the overburden) and t he top of the magnesiu m carbo n ate rock are clearly mark e d in the ph o to. Personn e l are visible in the open p it setting th e explosive charges. Blasted rock w as then ex c avated using hydraulic ex c avators and moved to th e pad u s ing trucks.

D irectors Andrej K. Karpinski Executive Chairman Director

EARN I NGS ESTIM A TES

Result s of the expa n ded study sh o w that the p r oject has attr a ctive econo m ics combine d with ability t o potent i ally generate substantial p r e-tax earnin g s estimated a t approximat e ly $613.6 million to $614. 2 million over project life starting wi t h the first ye a r of operatio n s. Estimates of potential e a rnings befor e intere s t, tax, and amortisation but after pay m ents for roy a lties, overhe a ds etc. are shown in th e followi n g table. The estimated e a rnings are ro u nded to the n earest signif i cant digit an d are provide d as ran g es.

Rodney H. Skeet Non-ex e cutive Director Daniel A. Smetana Non-ex e cutive Director Anthony G. Wills Non-ex e cutive Director

Table 1 Project estimated EBITDA at US$105/T magnesium carbonate price and US$0.80 exchange rate

	YEAR 1	YEAR 2		YEAR 3	YEAR 4	Y EARS 5-8	YE ARS 9-12	T OTAL
	(in$ '0 00)	(in$ '000	)	(in$ '000)	(in$ '000)	( in$ '000)	( in$ '000)	(in $ '000)
From	37,20 0	37,800		37,500	49,700	201,100	250,300	6 13,600
To	37,30 0	37,900		37,600	49,800	201,200	250,400	6 14,200

P rojects

This s t udy assume d a two-stag e , bench-by-b e nch development. Stage-1 would establish a quarr y Winchester with all infrastructur e required to p roduce mag n esium carbo n ate rock at a n annual rate capacity of u p (Rum Jungle, NT) to 1,0 0 0,000 tonnes of saleable r o ck. Projecte d production schedule sho w n in Table 1 2 assumes a n Magne s ium carbonate initial rate of produc t ion of 600,0 0 0 tonnes of s a leable magnesium carbo n ate rock per y ear (for first 3 (MgCO3) years) , increasing t o 800,000 ton n es in year 4 , and further increasing to 1 ,000,000 tonnes in year 9. Geolsec The st u dy assumed a cut-back to enlarge the o pen pit in ye a r 4. The stud y shows that these change s (Rum Jungle, NT) P hosphate rock can b e deferred un t il at least 2, 4 00,000 tonn e s of saleabl e magnesium carbonate rock have bee n (P2O5) produ c ed and sold. In year 9 the s tudy assumed a partial diversion of a s h ort section of the creek an d Batchelor install a tion and con s truction of a d ditional wat e r management infrastruct u re in year 9, and year 10. (Rum Jungle, NT) ungle, NT) The st u dy assumed that the full c o st of the cut - back, diversi o n, and additi o nal infrastru c ture would b e Pb, Ni, Cu, Co, fully funded from th e project cas h flows. Cons e quently, thes e additional c osts have be e n included i n Sc, Mn the calculations of t he estimated earnings an d cashflows o f year 4, ye a r 9, and yea r 10 shown i n Mt. Elephant t. Elephant Table 1, and Tabl e 2, and in th e sensitivity s t udies of esti m ated earning s and NPV s h own in Tabl e (Ashburton, WA) urton, WA) 3, and Table 4.

Batchelor (Rum Jungle, NT) ungle, NT) Au, Ag, Zn, Pb, Ni, Cu, Co, Sc, Mn

Mt. Elephant t. Elephant (Ashburton, WA) urton, WA) Au, Cu Karratha (Pilbara, WA) Au, Co, Cu Marble Bar/Nullagine (Pilbara, WA) Au, Co, Cu, Li

CASH F LOW ESTIMATES

Import a ntly, in add i tion to havi n g high EBITDA, Winchester quarry h a s a potenti a l to generat e attract i ve Free Cas h Flow estima t ed at approximately $434.0 million to $ 4 34.6 million a fter providin g for int e rest, income tax, repaym e nts of debt, royalties, ov e rheads etc. P lease note that this stud y assumed no debt f u nding. Estim a te of Free C ash Flow fro m the quarry a fter payments for interest, incom e tax, repay m ents of deb t , royalties, o verheads et c . is shown in the followi n g table. Th e estimated cash-flow s are rounde d to the neare s t significant d igit and are p rovided as ra n ges.

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20 P R OWSE STRE E T, WEST PE R TH, WA, 600 5 , AUSTRALIA PO B OX 1958, WE S T PERTH, W A , 6872, AUST R ALIA TEL ( 08) 9474 6166 FAX (08) 93 2 2 6333 ACN 082 140 252 PAGE 2

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K O RA B R E SO U RC E S LIMI T ED KORAB H OUSE www.korab.co m .au

Table 2 Project estimated Free Cash Flow (in $ ‘000) after tax, interest, and debt repayments at US$105/T magnesium carbonate price and US$0.80 exchange rate

Issue d Capital

Shares: 299 Mln Last Price: 3.4 cents Capital: $ 10.17 Mln

Listing Codes ASX: KOR BERLIN: C6S.BE

D irectors Andrej K. Karpinski Executive Chairman Director

Rodney H. Skeet Non-ex e cutive Director Daniel A. Smetana Non-ex e cutive Director Anthony G. Wills Non-ex e cutive Director

P rojects

Winchester (Rum Jungle, NT) Magne s ium carbonate (MgCO3)

Geolsec (Rum Jungle, NT) P hosphate rock (P2O5)

Batchelor (Rum Jungle, NT) Au, Ag, Zn, Pb, Ni, Cu, Co, Sc, Mn

Mt. Elephant (Ashburton, WA) Au, Cu Karratha (Pilbara, WA) Au, Co, Cu

Marble Bar/Nullagine (Pilbara, WA) Au, Co, Cu, Li

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YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEARS 5-8 YEARS 9-12 TOTAL (in $ '000) (in $ '000) (in $ '000) (in $ '000) (in $ '000) (in $ '000) (in $ '000) From 30,0 0 0 26,500 26,300 34,900 141,000 175,300 4 34,000 To 30,1 0 0 26,600 26,400 35,000 141,100 175,400 4 34,600 Sensit i vity study sh o ws that eco n omics of Winchester mag n esium carbo n ate quarry a r e very robust with E B ITDA and fr e e cash flow e stimated to r e main positiv e even at US$ 5 0/T magnes i um carbonat e price (which is significantly belo w the current market price) with the annual sales fr o m the quarr y runnin g at only 60 % of its no m inal producti o n capacity. Sensitivity of the approxi m ate earning s (EBIT D A) estimates to variations in the magne s ium carbonate sale price is shown in the table below The e s timated earnings are roun d ed to the ne a rest significa n t digit.

Table 3 Project estim ated	Table 3 Project estim ated	EBITDA (in $	'000)- Se nsitivity to m agnesium carb onate selling price	'000)- Se nsitivity to m agnesium carb onate selling price	'000)- Se nsitivity to m agnesium carb onate selling price	'000)- Se nsitivity to m agnesium carb onate selling price	'000)- Se nsitivity to m agnesium carb onate selling price
	YEA @600 R 1 KT	YEAR @600 2 KT	YEAR @600K 3 T	YEAR 4 @800K T	YEARS 5- @800KT 8	YEARS 9- @1,000KT 12	TOTAL
	($ '0 00)	($ '00 0)	($ '000 )	($ '000 )	($ '000)	($ '000)	($ '000)
US$ 50/T	6,10 0	6,70 0	6,500	8,300	35,500	45,500	108,600
US$ 60/T	11,8 00	12,40 0	12,10 0	15,800	65,600	82,700	200,400
US$ 70/T	17,4 00	18,00 0	17,70 0	23,400	95,700	120,000	292,200
US$ 80/T	23,1 00	23,70 0	23,40 0	30,900	125,800	157,200	384,100
US$ 90/T	28,7 00	29,30 0	29,00 0	38,400	155,900	194,400	475,700
US$1 00/T	34,3 00	35,00 0	34,70 0	45,900	186,000	231,700	567,600
US$1 05/T	37,2 00	37,80 0	37,50 0	49,700	201,100	250,300	613,600
US$1 10/T	40,0 00	40,60 0	40,30 0	53,500	216,100	268,900	659,400
US$1 20/T	45,6 00	46,20 0	46,00 0	61,000	246,200	306,200	751,200
US$1 30/T	51,3 00	51,90 0	51,60 0	68,500	276,300	343,400	843,000
US$1 40/T	56,9 00	57,50 0	57,20 0	76,000	306,400	380,700	934,700
US$1 50/T	62,6 00	63,20 0	62,90 0	83,600	336,500	417,900	1,026,700
US$1 60/T	68,2 00	68,80 0	68,50 0	91,100	366,600	455,100	1,118,300

ESTI M ATED NPV

Study has also sho w n that the p o tential Free C ash Flow from Wincheste r quarry after provisions fo tax, in t erest, and ro y alties has a n estimated Net Present V a lue (NPV) of approximately $184 millio n to $18 5 million. Thi s high estima t ed NPV and a low estimated CAPEX o f approximately $2.4 millio n to $2. 5 million mak e Winchester a robust proj e ct. Importan t ly, the NPV o f Free Cash Flow remain s positiv e even after a 50% drop in the magn e site sale pri c e from curr e nt market le v els assumin g annua l volume of s a les of 600,00 0 tonnes of magnesium ca r bonate rock. S ensitivity of t he Free Cas h Flow N PV to variati o ns in the m a gnesite price is shown in the following t able. The estimated NPV- s are ro u nded to the n earest signifi c ant digit and are provided a s ranges.

Table 4 Free Cash Flow Net Present Value using a discount factor of 12%pa (in $ '000) after tax, interest and debt repayments at various magnesium carbonate prices

MgCO in US$ 3 price /tonne	US $85	US$90	US$90	US$95	U S$100	U S$100	US$1 05	US$110	US$115	U S$120	US$12 5
	(in '00 $ 0)	(in $ '000)		(in $ '000)		(in $ '000)	(in '000 $ )	(in $ '000)	(in $ '000)	(in $ '000)	(in $ '000)
F rom	129 ,000	143,000		157,000	1 70,000		184,0 00	198,000	212,000	22 6,000	240,00 0
To	130 ,000	144,000		158,000	1 71,000		185,0 00	199,000	213,000	22 7,000	241,00 0

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20 P R OWSE STRE E T, WEST PE R TH, WA, 600 5 , AUSTRALIA PO B OX 1958, WE S T PERTH, W A , 6872, AUST R ALIA TEL ( 08) 9474 6166 FAX (08) 93 2 2 6333 ACN 082 140 252 PAGE 3

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Issue d Capital

Shares: 299 Mln Last Price: 3.4 cents Capital: $ 10.17 Mln

Listing Codes ASX: KOR BERLIN: C6S.BE

D irectors

Andrej K. Karpinski Executive Chairman Director

Rodney H. Skeet Non-ex e cutive Director Daniel A. Smetana Non-ex e cutive Director

Anthony G. Wills Non-ex e cutive Director

K O RA B R E SO U RC E S LIMI T ED KORAB H OUSE www.korab.co m .au

Study assumed a 1 2 year quar r y life (see b a sed on indi c ated mineral resource es t imate of 12. 2 million tonnes of m a gnesium car b onate rock ( s ee Table 11 for detailed m ineral resources estimate). Produ c tion was as s umed to start at 600,00 0 tonnes/year of saleable m agnesite rock in Year 1, increa s ing to 800,0 0 0 tonnes/year of saleable m agnesite ro c k in Year 4, a nd increasin g to 1,000,00 0 tonne s /year saleabl e magnesite r o ck in Year 9.

The s t udy assume d a selling p r ice of magn e site rock of US$105 per tonne FOB b asis. Current marke t prices for m a gnesium car b onate rock r a nge from U S $90 to US$1 5 0 per tonne on FOB basi s depen d ing on the grade and the level of impurities. Winch e ster project w ill produce premium grad e magn e sium carbon a te with low i m purities. Selling prices for this type of p roduct currently range fro m US$1 2 0 to US$150 per tonne. Pr i ces of magn e sium carbon a te rock have risen considerably over last 2 yea r s primarily d ue to suppl y shortages a nd increase d demand. G lobal sales o f magnesiu m carbo n ate rock for the 2016 yea r were appro x imately 27 million to 28 m i llion tonnes. Data for 201 7 year i s not yet av a ilable. Howe v er, information obtained f rom Korab’s discussions with potenti a l buyer s and anecdotal evidence f r om various m agnesium carbonate prod u cing regions suggests that the de m and has increased again while the su p ply has decli n ed due to cl a mp-down on environmental polluti o n in China. The study a s sumed that over time magnesium ca r bonate pric e s will declin e some w hat and will a verage US$105 per tonne as the increa s ed supply fr o m new proje c ts catches-u p with the growing de m and.

The st u dy assumed a US$/AU$ e xchange rat e of US$0.80. The exchan g e rate at the t ime of writin g of this report was a p proximately U S$0.77. To c alculate the p otential royal t ies’ income o f the Norther n Territory governme n t, the study used curre n t royalty rat e of 20% (a f ter allowabl e deductions). Comp a ny income t a x rate used w as 30%. It w as further assumed that accumulated Company ta x losses (estimated a t approximat e ly $13 millio n ) will be set o ff against ta x able income until they ar e fully utilised. Study assumed t h at that no d ebt will be used. Other material mo d ifying factor s conce r ning this proj e ct are provid e d in Table 13.

OPER A TING COST ESTIMATES

P rojects

Winchester (Rum Jungle, NT) Magne s ium carbonate (MgCO3)

Geolsec (Rum Jungle, NT) P hosphate rock (P2O5)

Batchelor (Rum Jungle, NT) Au, Ag, Zn, Pb, Ni, Cu, Co, Sc, Mn

Mt. Elephant (Ashburton, WA) Au, Cu Karratha (Pilbara, WA) Au, Co, Cu Marble Bar/Nullagine (Pilbara, WA) Au, Co, Cu, Li

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Estim a ted approxi m ate project operating cost s at various o utput capaci t ies are sho w n in Table 5, Table 6 , and Table 7. The estim a ted operatin g costs are ro u nded to the n earest significant digit an d are pr o vided as ran g es. Table 5 Project estimated operating costs (shovel and truck, drill and blast) at 375KT/Y capacity

	Descripti on	Fr om	To
WATE R MANAGEMEN T($/YR.)		180,0 00	190 ,000
WAST E DUMPS($/YR .)		190,0 00	200 ,000
MINEA ND CRUSHING ($/YR.)		6,053,0 00	6,054 ,000
SUBTO TAL($/YR.)		6,423,0 00	6,444 ,000
CONT INGENCY(30%)		1,926,9 00	1,933 ,200
TOTAL ESTIMATE		8,349,9 00	8,377 ,200
CAPAC ITY OUTPUTR OM MAGNESIT E(T/YR.)		375,0 00	375 ,000
SALEA BLE COARSEM AGNESITE CO ST($/T)		27	28
COAR SE MAGNESITE /FINES		8 0%	80%
CAPA CITY OUTPUT C OARSE SALEA BLE MAGNESIT E(T/YR.)		300,0 00	300 ,000
CAPAC ITY OUTPUTF INES(T/YR.)		75,0 00	75 ,000

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20 P R OWSE STRE E T, WEST PE R TH, WA, 600 5 , AUSTRALIA PO B OX 1958, WE S T PERTH, W A , 6872, AUST R ALIA TEL ( 08) 9474 6166 FAX (08) 93 2 2 6333 ACN 082 140 252

PAGE 4

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K O RA B R E SO U RC E S LIMI T ED KORAB H OUSE www.korab.co m .au

Table 6 Project estimated operating costs (shovel and truck, drill and blast) at 750KT/Y capacity

Issue d Capital

Shares: 299 Mln Last Price: 3.4 cents Capital: $ 10.17 Mln

Listing Codes

ASX: KOR BERLIN: C6S.BE

D irectors Andrej K. Karpinski Executive Chairman Director

Rodney H. Skeet Non-ex e cutive Director Daniel A. Smetana Non-ex e cutive Director

Anthony G. Wills Non-ex e cutive Director

P rojects

Winchester (Rum Jungle, NT) Magne s ium carbonate (MgCO3)

Geolsec (Rum Jungle, NT) P hosphate rock (P2O5)

Batchelor (Rum Jungle, NT) Au, Ag, Zn, Pb, Ni, Cu, Co, Sc, Mn

Mt. Elephant (Ashburton, WA) Au, Cu Karratha (Pilbara, WA) Au, Co, Cu Marble Bar/Nullagine (Pilbara, WA) Au, Co, Cu, Li

	Descripti on		Fr om	To
WATE R MANAGEMEN T($/YR.)			180,0 00	190 ,000
WAST E DUMPS($/YR .)			190,0 00	200 ,000
MINEA ND CRUSHING ($/YR.)			10,078,0 00	10,079 ,000
SUBTO TAL($/YR.)			10,448,0 00	10,469 ,000
CONT INGENCY(30%)			3,134,4 00	3,140 ,700
TOTAL ESTIMATE			13,582,4 00	13,609 ,700
CAPAC ITY OUTPUTR OM MAGNESIT E(T/YR.)			750,0 00	750 ,000
SALEA BLE COARSEM AGNESITE CO ST($/T)			22	23
COAR SE MAGNESITE /FINES			8 0%	80%
CAPA CITY OUTPUT C OARSE SALEA BLE MAGNESIT E(T/YR.)			600,0 00	600 ,000
CAPAC ITY OUTPUTF INES(T/YR.)			150,0 00	150 ,000

Table 7 Project estimated operating costs (shovel and truck, drill and blast) at 1,000KT/Y capacity

	Descripti on	Fr om	To
WATE R MANAGEMEN T($/YR.)		180,0 00	190 ,000
WAST E DUMPS($/YR .)		190,0 00	200 ,000
MINEA ND CRUSHING ($/YR.)		12,997,0 00	12,998 ,000
SUBTO TAL($/YR.)		13,367,0 00	13,388 ,000
CONT INGENCY(30%)		4,010,1 00	4,016 ,400
TOTAL ESTIMATE		17,377,1 00	17,404 ,400
CAPAC ITY OUTPUTR OM MAGNESIT E(T/YR.)		1,000,0 00	1,000 ,000
SALEA BLE COARSEM AGNESITE CO ST($/T)		21	22
COAR SE MAGNESITE /FINES		8 0%	80%
CAPA CITY OUTPUT C OARSE SALEA BLE MAGNESIT E(T/YR.)		800,0 00	800 ,000
CAPAC ITY OUTPUTF INES(T/YR.)		200,0 00	200 ,000

All variants shown a bove assumed standard s hovel and tr u ck mining m ethod with li m ited drill an d blasting.

CAPI T AL COST ESTIMATES

Capital costs of the Winchester p roject have been estimat e d at approximately $2.4 m illion to $2. 5 million (including 3 0 % contingen c y). Compon e nts of the c a pital costs o f the project are shown i n Table 8.

Result s of the stud y show that m ain compon e nts of capital expenditure are not sensitive to output capaci t y and that the capacity is primarily the function of d e mand for th e DSO magn e site rock. Th e capaci t y of the pro j ect would t h erefore ultim a tely depend on any off-t a ke and/or l o ng term sal e agree m ents. The s t udy assume d that contra c tors would be used for m ajority of pr o ject operatin g tasks thus reducing capital costs b y limiting th e need for ow n er operated e quipment. C a pital cost ha s been e stimated for the develop m ent of open pit operatio n s with requir e d access roads, bunding, pads, a nd other site infrastructur e , waste and w ater manage m ent etc.

Sever a l development variants w ere evaluated initially. In the end, a t wo-stage, b e nch-by-benc h development was s e lected as th e optimum variant for this feasibility stud y update. Und e r this variant,

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20 P R OWSE STRE E T, WEST PE R TH, WA, 600 5 , AUSTRALIA PO B OX 1958, WE S T PERTH, W A , 6872, AUST R ALIA TEL ( 08) 9474 6166 FAX (08) 93 2 2 6333 ACN 082 140 252 PAGE 5

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Issue d Capital

Shares: 299 Mln Last Price: 3.4 cents Capital: $ 10.17 Mln

Listing Codes ASX: KOR BERLIN: C6S.BE

D irectors Andrej K. Karpinski Executive Chairman Director

Rodney H. Skeet Non-ex e cutive Director Daniel A. Smetana Non-ex e cutive Director Anthony G. Wills Non-ex e cutive Director

P rojects

Winchester (Rum Jungle, NT) Magne s ium carbonate (MgCO3)

Geolsec (Rum Jungle, NT) P hosphate rock (P2O5)

Batchelor (Rum Jungle, NT) Au, Ag, Zn, Pb, Ni, Cu, Co, Sc, Mn

Mt. Elephant (Ashburton, WA) Au, Cu Karratha (Pilbara, WA) Au, Co, Cu Marble Bar/Nullagine (Pilbara, WA) Au, Co, Cu, Li

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K O RA B R E SO U RC E S LIMI T ED KORAB H OUSE www.korab.co m .au

estimated capital c o sts to be bo r ne prior to commenceme n t of producti o n and sale o f magnesiu m carbo n ate rock wer e significantly reduced due to (among ot h ers) smaller v olume of ov e rburden to b e remov e d prior to commencemen t of mining, n o initial requirement for co n struction an d maintenanc e of a diversion chan n el, and a re d uced waste and water m a nagement r e quirements. A ny additional costs ( pit cut-backs, installation o f additional e q uipment, further infrastruc t ure) which a r e to be born e during subsequent years were included in t h e estimates of operating cashflows for the relevant period s .

The st u dy was bas e d on a conce p tual mine th a t could oper a te at various capacity levels: 375,000T/ y ROM capacity, 75 0 ,000T/y RO M capacity a n d 1,000,000T/y ROM c a pacity. Thes e levels wer e select e d on the basis of Korab’s d iscussions w i th potential b u yers of the m agnesite roc k . Korab is th e sole m arketing agent for all roc k produced by Korab’s wholly owned s ubsidiary Au s Mag Pty Ltd. AusM a g Pty Ltd is t h e owner and operator of t h e Winchester Project.

The la y out of the p r oject under t w o-stage, be n ch-by-bench operating sc e nario with st a ge-1 open pit quarry and quarry infrastructur e shown in F igure 2, and stage-2 o p en pit quar r y and quarr y infrast r ucture show n in Figure 3.

The e s timated capit a l costs are r o unded to the nearest significant digit an d are provide d as ranges.

Table 8 Project estimated capital costs

ct estim ated capital c osts
SUMMA RY	FROM	TO
WAT ER MANAGEME NT	390,000	400,000
SITE INFRASTRUCT URE	580,000	590,000
WAS TE PRODUCTS DUMPS	100,000	110,000
QUA RRY	810,000	820,000
SUBTO TAL	1,880,000	1,920,000
CON TlNGENCY (30% )	564,000	576,000
TOTAL ESTIMATE	2,444,000	2,496,000

CAU T IONARY S T ATEMENT

The f e asibility stud y referred to in this ann o uncement h a s been und e rtaken for t h e purpose of estimating approximate capital a n d operating costs of the Winchester Ma g nesium Carbonate Project. It is a p reliminary te c hnical and e c onomic stud y of the pote n tial viability o f this Project. It is based o n low le v el technical a nd economic assessment s that are not s ufficient to s u pport the es t imation of or e reserv e s. Further e v aluation wor k and appropriate studies a r e required b e fore the Company will be i n a posi t ion to estim a te any ore r e serves or to provide any a ssurance of an economi c development case.

This f e asibility stud y is based on the material assumptions outlined else w here in this report, and i n prior r e ports releas e d on 13 Jan u ary 2015 an d 10 March 2 0 15. The Co m pany confir m s that, all th e materi a l assumptions underpinni n g the produc t ion target, or the forecast f i nancial infor m ation derive d from a production t a rget, in the i n itial public r e ports (and w hich are not d isclosed els e where in thi s report) continue to apply and h a ve not mate r ially change d . These incl u de assumpti o ns about th e availa b ility of funding. While the C ompany co n siders all of the material a s sumptions t o be based o n reaso n able ground s , there is n o certainty th a t they will p r ove to be c o rrect or that the range of outco m es indicated by the feasibi l ity study will b e achieved.

To ac h ieve the range of outcome s indicated in the feasibility study, fundin g in the order of $3.5 millio n to $4 m illion will lik e ly be require d . Investors s h ould note th a t there is no certainty that the Compan y will be able to raise that amount of funding w h en needed. It is also pos s ible that suc h funding ma y

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K O RA B R E SO U RC E S LIMI T ED KORAB H OUSE www.korab.co m .au

only b e available o n terms that m ay be diluti v e to or other w ise affect the value of K o rab’s existin g share s .

Issue d Capital

Shares: 299 Mln Last Price: 3.4 cents Capital: $ 10.17 Mln

Listing Codes ASX: KOR BERLIN: C6S.BE

D irectors

Andrej K. Karpinski Executive Chairman Director

Rodney H. Skeet Non-ex e cutive Director Daniel A. Smetana Non-ex e cutive Director Anthony G. Wills Non-ex e cutive Director

It is al s o possible t h at the Comp a ny could pu r sue other ‘value realisatio n ’ strategies s uch as a join ventur e , a partial s ale, or a sale of the pro j ect. If it does, this could materially r e duce Korab’ s propor t ionate ownership of the pr o ject.

Given the uncertainties involved, investors sh o uld not mak e any invest m ent decision s based solel y on the results of the feasibility stu d y.

AVAI L ABILITY OF FUNDING

On 23 March 2016 t he Company reported that it has entere d into an agre e ment with Mr. Hong Wan g (who r e presents int e rests associ a ted with Chi n ese steel in d ustry, bankin g and financ e , constructio n and building mate r ials) for a $ 6 million d e velopment f u nding for t h e Winchest e r magnesiu m carbo n ate project. U nder this ag r eement, the $ 6 million de v elopment fu n ding would be provided b y way o f funders and / or their nomi n ees acquirin g a direct 25 % -30% equity interest in A u sMag Pty Lt d (wholl y owned subsidiary of Kor a b developing the Winchester project) a n d would be conditional o n Korab (or AusMag) s ecuring addi t ional offtake s for magnesi u m carbonate rock. The pa r ties are yet t o finalis e the funding documentati o n for this tra n saction inclu d ing the sub s cription agre e ment and th e mana g ement agree m ent. The parties have agreed to wait w ith finalising the funding d ocumentatio n until K o rab finalises and publishe s these result s .

The C o mpany assumed for the p urpose of thi s study that t h e funding m a y be source d either under the ab o ve agreeme n t, or in the a lternative, as a combination of debt (by way of a for w ard sale) an d equity (by way of a n institutional p lacement, a n d/or a pro-ra t a share issu e ). In light of t h e informatio n receiv e d from rele v ant counter p arties, and g iven the rel a tively low C A PEX of the project, bot h avenu e s appear feasible.

MINI N G PLAN

P rojects

Winchester (Rum Jungle, NT) Magne s ium carbonate (MgCO3)

Geolsec (Rum Jungle, NT) P hosphate rock (P2O5)

Batchelor (Rum Jungle, NT) Au, Ag, Zn, Pb, Ni, Cu, Co, Sc, Mn

Mt. Elephant (Ashburton, WA) Au, Cu Karratha (Pilbara, WA) Au, Co, Cu Marble Bar/Nullagine (Pilbara, WA) Au, Co, Cu, Li

Result s of the stud y show that a verage waste rock to or e ratio for th e entire minin g operation i s appro x imately 0.45 to 1 T/T, tho u gh the actua l ratio will fluctuate over th e life of the p r oject. Initially, the w a ste rock to o re ratio woul d be about 0.85 to 1, while towards th e end of min e -life the rati o would be less than 0.2. The average ratio of all waste (ov e rburden plu s waste rock) to ore for th e entire m ining operation was appr o ximately 0.5 5 to 1 T/T.

The d e sign criteria f o r the open p i t used in this study are su m marised in t h e following table.

Table 9 Open pit design criteria

ign criteria
Bench Height (m)	5
Distance betw een berms (m)	20
Berm Width (m )	5
Road Width (m )	20
Maximum Roa d Gradient (% )	12.5

The sl o pe design p a rameters used in this stud y are summarised in the foll o wing table.

Table 10 Open pit slope design parameters

it slo pe design par ameters
Uni t		Face Angle	FaceH eight
Ove rburden		40°	Irregu lar
Und isturbed rock		70°	20m

A thin layer (up to 5m) of unconsolidated s o il and unconsolidated all u vium overlie s the massiv e magn e site at the W i nchester de p osit. This ov e rburden would require pro g ressive rem o val to expos e

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K O RA B R E SO U RC E S LIMI T ED KORAB H OUSE www.korab.co m .au

the h a rd, consolid a ted magnesi t e. It is exp e cted that th e unconsolid a ted, overbur d en could b e remov e d by tractor s craper.

Issue d Capital

Shares: 299 Mln Last Price: 3.4 cents Capital: $ 10.17 Mln

Listing Codes ASX: KOR BERLIN: C6S.BE

D irectors

Andrej K. Karpinski Executive Chairman Director

Rodney H. Skeet Non-ex e cutive Director Daniel A. Smetana Non-ex e cutive Director

Anthony G. Wills Non-ex e cutive Director

P rojects

Winchester (Rum Jungle, NT) Magne s ium carbonate (MgCO3)

Geolsec (Rum Jungle, NT) P hosphate rock (P2O5)

Batchelor (Rum Jungle, NT) Au, Ag, Zn, Pb, Ni, Cu, Co, Sc, Mn

Mt. Elephant (Ashburton, WA) Au, Cu Karratha (Pilbara, WA) Au, Co, Cu Marble Bar/Nullagine (Pilbara, WA) Au, Co, Cu, Li

Under shovel and drill/blast opti o n, conventio n al open pit m ining metho d s using rubb e r-tyred truck s and ei t her a hydraulic excavator o r rubber-tyre d , front end lo a der were pr o posed for ex c avation of th e open p it materials. Please refer to the Figure 4 for a phot o of the pers o nnel setting the explosiv e charg e s in the Winc h ester open p it during the p rior test mini n g operations.

Under the shovel a n d drill/blast o p tion, magne s ite would req u ire blasting p rior to excav a tion and min e bench e s are expe c ted to be s u itable for r u nning rubbe r tyred minin g equipment with minim a l preparation.

Study indicates that optimum variant is for the mining opera t ions to be ini t ially carried o ut on a yearl y camp a ign basis by e mploying a s pecialist mining contractor. Study show s that campai g n mining ca n be util i sed as the p referred mo d e of operation up to appr o ximately 1,0 0 0,000 ROM output. If th e volum e s increase b eyond this level, it is e x pected that the project c ould move to year roun d operat i on.

MINE R AL RESOU R CES ESTIM A TES FOR WINCHESTER M AGNESITE DEPOSIT

Curre n t estimated m ineral resour c es at Winch e ster underpi n ning this pre - feasibility st u dy are show n in the f ollowing tabl e :

Table 11 Mineral resources estimates

A t 40% MgO Cu t-Off	MgCO Mass	MgO grade
	‘000 To nnes	%
IndicatedR esources	12,2 00	43.1
Inferred Re sources	4,4 00	43.6
Total	16,6 00	43.2

There has been no change to th e Winchester m ineral resource estimate s ince it was l a st reported i n the Annual Report 2017.

This information wa s prepared and first disclos e d under the J ORC Code 2 004 on 17 July 2007. It ha s not been updated since to comp l y with the J O RC Code 2012 on the ba s is that the i n formation ha s not m a terially changed since it w a s last reported.

The a u thor of this report is not aware of an y new information or data that materially affects th e inform a tion included in the report released on 1 7 July 2007 a nd, in the ca s e of mineral r esources that all the material as s umptions an d technical p arameters u n derpinning t h e estimates in the report releas e d on 17 July 2007 continu e to apply an d have not materially chang e d. The form and context i n which the findings o f the report r eleased on 1 7 July 2007 are presente d have not b e en materiall y modifi e d.

TIME F RAME FOR D EVELOPME N T AND PRODUCTION

The C ompany is a iming to co m mence the development of the proj e ct and the production of magn e sium carbon a te rock as so o n as practic a ble. The Co m pany intend s to lodge a “ N otice of intent to min e ” with the Northern Territo r y Departmen t of Primary I n dustry and R e sources ver y shortly.

For th e purpose of t his study th e Company a s sumed that the funding for the project, completion o sales and/or offtakes of magn e sium carbonate rock, an d securing r e quired gov e rnmental an d regula t ory project a pprovals will take approximately 12-14 months. This assumptio n is based o n inform a tion obtaine d from our dis c ussions with the relevant c ounterparties.

Howe v er; investors should note that the actual timeframe of the devel o pment and p roduction will depen d on the act u al availabilit y of funding f o r the project, completion of sales and / or offtakes of

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Issue d Capital

Shares: 299 Mln Last Price: 3.4 cents Capital: $ 10.17 Mln

K O RA B R E SO U RC E S LIMI T ED KORAB H OUSE www.korab.co m .au

magn e sium carbonate rock, se c uring required governm e ntal and re g ulatory proj e ct approvals, acces s to transport , and market factors such as magnesium carbonate rock prices, e nergy prices, foreig n exchange ra t es, etc. whic h are outside t he control of the Company.

Shoul d there be a d e lay with sec u ring the funding, sales, or regulatory pe r mits, or should there be a n adver s e change in a ny of the re m aining aforementioned fa c tors, it may i mpact on th e development and pr o duction time f rame.

PROD U CTION SC H EDULE

Listing Codes ASX: KOR BERLIN: C6S.BE

D irectors Andrej K. Karpinski Executive Chairman Director

Rodney H. Skeet Non-ex e cutive Director Daniel A. Smetana Non-ex e cutive Director Anthony G. Wills Non-ex e cutive Director

The C o mpany used the following production schedule in this feasibility stu d y.

Table 12 Project production schedule estimates

Ye ar	Salea ('0 ble Tonnage 00 tonnes)	ROM Tonna tonne ge ('000 s)	C P umulative ROM roduction ('000 tonnes)	Reso Classi urce fication
1	600	750	750	indic ated
2	600	750	1,500	indic ated
3	600	750	2,250	indic ated
4	800	1,00 0	3,250	indic ated
5	800	1,00 0	4,250	indic ated
6	800	1,00 0	5,250	indic ated
7	800	1,00 0	6,250	indic ated
8	800	1,00 0	7,250	indic ated
9	1,000	1,25 0	8,500	indic ated
10	1,000	1,25 0	9,750	indic ated
11	1,000	1,25 0	11,000	indic ated
12	960	1,20 0	12,200	indic ated

This production sc h edule is ba s ed solely on indicated mineral resour c es. For min e ral resource s estimate which includes both indi c ated and inf e rred mineral r esources ple a se refer to T a ble 11.

P rojects

Winchester (Rum Jungle, NT) Magne s ium carbonate (MgCO3)

Geolsec (Rum Jungle, NT) P hosphate rock (P2O5)

Batchelor (Rum Jungle, NT) Au, Ag, Zn, Pb, Ni, Cu, Co, Sc, Mn

Mt. Elephant (Ashburton, WA) Au, Cu Karratha (Pilbara, WA) Au, Co, Cu

Marble Bar/Nullagine (Pilbara, WA) Au, Co, Cu, Li

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The p r oduction sch e dule was de v eloped after consultation with potential and prospe c tive buyers of magn e sium carbon a te rock.

Simila r ly to the Timeframe for P r oduction and Development section; inv e stors should note that th e actual production s chedule will depend on the availabili t y of fundin g for the Pr o ject, finalise d magn e sium carbon a te rock sale s and/or offt a kes, govern m ental and r e gulatory proj e ct approvals, acces s to transport, and other f a ctors such a s magnesiu m carbonate r ock prices, e nergy prices, foreig n exchange ra t es, etc. whic h are outside t he control of the Company. On 6 March 2017, Korab advis e d that it ha s terminated Heads of A g reement for the supply of 300,0 0 0 tonnes per year of m a gnesium ca r bonate rock for 5 years (the Agreement) originall y report e d to the mar k et on 4 Nov e mber 2015. T his Agreeme n t was not re l ated to the tr a nsaction wit h Mr. W a ng, or prop o sed transaction with Chi n ese funders announced t o the market on 23 Marc h 2016. T his Agreem e nt was also n ot related to the Heads o f Agreement w ith the oper a tor of Darwi n Port w hich was an n ounced to t h e market on 8 Novembe r 2017. The A greement was terminate d withou t penalties b y Korab givin g notice in writing to the counterparty a s envisaged b y the terms of the A g reement. This termination will allow K o rab greater flexibility in s etting volum e s and price s during the ongoing d iscussions w i th potential a n d prospectiv e buyers of m a gnesium ca r bonate rock.

ACCE S S TO TRAN S PORT

Sea tr a nsport is av a ilable from D arwin Port’s East Arm w h ich is locate d 93km to th e north of th e projec t . Bulk materi a ls handling f a cility at East Arm include s an 850m rai l spur, 1,500 T /H rail botto m dump station, stockpiles, haul ro a ds and a 2, 0 00T/H travel l ing gantry s h iploader. Th e shiploader i s designed for Pana m ax class shi p s. Road tran s port by haul a ge trucks is a vailable to t h e Darwin port

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Issue d Capital

Shares: 299 Mln Last Price: 3.4 cents Capital: $ 10.17 Mln

Listing Codes ASX: KOR BERLIN: C6S.BE

D irectors Andrej K. Karpinski Executive Chairman Director

Rodney H. Skeet Non-ex e cutive Director Daniel A. Smetana Non-ex e cutive Director

Anthony G. Wills Non-ex e cutive Director

K O RA B R E SO U RC E S LIMI T ED KORAB H OUSE www.korab.co m .au

and to South Austr a lia, Victoria, N ew South W ales and Qu e ensland via B atchelor roa d and then vi a Stuart Highway. D a rwin to Adel a ide railway line runs alo n g Stuart Hig h way and is transected b y Batch e lor road appr o ximately 5k m from the de p osit. Currently there are n o rail loading f acilities either at Bat c helor or near the point wh e re Batchelor road transec t s the railway line. On 8 N o vember 2017, Korab reported that it has sign e d Heads of Agreement with the operator of Dar w in port. Ho A envisages exportin g of 500,000 t pa of magn e site rock thr o ugh Darwin Port East A r m Wharf an d includ e s sub-leasin g of the land, access to v arious port facilities, and use of load e rs, and other equip m ent. HoA pr o vides the b a sis for the fi n al port agre e ment which will allow for exporting th e magn e sium carbon a te rock throu g h Darwin.

PROJ E CT APPRO V ALS

Winch e ster deposit is located on a granted mineral lease M L 30587 hel d by Korab’s wholly owne d subsidiary AusMag Pty Ltd. Befo r e the quarry c an be established, an ap p ropriate Min e Management Plan ( M MP) will ne e d to be sub m itted to the N orthern Terri t ory Departm e nt of Primar y Industry an d Resources and Aus M ag will need to receive th e authorisatio n to impleme n t this MMP. P rior to lodgin g the M M P, AusMag will lodge a “ Notice of int e nt to mine” t o allow the D epartment to complete th e preliminary assess m ent of the pl a nned develo p ment.

Winch e ster quarry l a yout, pit design, site infra s tructure desi g n, and choi c e of equipment ensure that development and o peration of the Winche s ter quarry w ill have ver y small foot p rint and lo w enviro n mental impa c t.

Winch e ster deposit and the min e ral lease ar e located wh o lly on freeh o ld land and no native titl e appro v als would b e required t o establish a quarry. However, any s acred sites and sites of anthro p ological or h istorical sign i ficance that a re located w ithin the proj e ct area would need to b e protec t ed. The Co m pany will liai s e and consu l t with all affected parties a nd various s t akeholders t o ensur e that the proj e ct is well supported.

MODI F YING FACT O RS

P rojects

Winchester (Rum Jungle, NT) Magne s ium carbonate (MgCO3)

Geolsec (Rum Jungle, NT) P hosphate rock (P2O5)

Batchelor (Rum Jungle, NT) Au, Ag, Zn, Pb, Ni, Cu, Co, Sc, Mn

Mt. Elephant (Ashburton, WA) Au, Cu Karratha (Pilbara, WA) Au, Co, Cu Marble Bar/Nullagine (Pilbara, WA) Au, Co, Cu, Li

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For m a terial modifying factors an d assumption s used in this study which a re not disclo s ed elsewher e in this report please refer to Tabl e 13.

BACK G ROUND IN F ORMATION

Winch e ster Magne s ium Carbon a te Project c o nsists of a M ineral Leas e ML30587, 1 00% held b y AusM a g Pty Ltd, a wholly owne d subsidiary o f Korab Res o urces Ltd. K orab is the s ole marketin g agent f or the outpu t from the Wi n chester qua r ry. The proj e ct is located 2km east fro m the town of Batch e lor, some 70 km south of D arwin in the Northern Ter r itory. Mineral Lease ML30 5 87 covers a n area o f 352 ha.

The main use for m a gnesium ca r bonate rock i s in production of various t y pes of magnesium oxides. China and North K o rea control m ajority of the economically viable magn e sium carbo n ate resource s in the w orld. Global magnesium o xide market i s worth approximately US$ 6 0 billion. Th e main sector s where magnesium o xide is used include: refr a ctory bricks w hich are us e d to line the inside of ste e l and gl a ss furnaces and cement k ilns; producti o n of flame r e tardants; pro d uction of fir e resistant an d moisture resistant b uilding mat e rials like ma g wall, MgO board and m ag cement; production of magn e sium alloys used extens i vely in cars, airplanes, t a nks, APC-s and other d efence uses; hydro m etallurgy of c obalt and nic k el productio n ; water purifi c ation and soil treatment and feedstock.

The p o tential game changer is t h e recent dev e lopment of m agnesium-io n batteries w h ich have 8 t o 12 tim e s greater c a pacity than li t hium-ion bat t eries and can be charge d in as little as 36 minutes. Magn e sium-ion bat t ery's charge / discharge ef f iciency is 5 times higher than a lithiu m -ion battery. Anoth e r advantage o f magnesiu m -ion battery i s its ability to perform at te m peratures a s low as -30° C and a s high as +5 5 °C whereas lithium-ion b a tteries cease to function a t around -15°C. Addition a l

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K O RA B R E SO U RC E S LIMI T ED KORAB H OUSE www.korab.co m .au

benefi t of magnesi u m-ion batte r ies is that t h ey do not u se graphite and conseq u ently are not depen d ant on suppl y of this relati v ely expensiv e material.

Issue d Capital

Shares: 299 Mln Last Price: 3.4 cents Capital: $ 10.17 Mln

Listing Codes ASX: KOR BERLIN: C6S.BE

D irectors Andrej K. Karpinski Executive Chairman Director

Rodney H. Skeet Non-ex e cutive Director Daniel A. Smetana Non-ex e cutive Director Anthony G. Wills Non-ex e cutive Director

The v a riety of uses a nd the relati v e size of the magnesium o xide, and ma g nesium allo y s markets ar e of obvious benefit t o magnesium carbonate ro c k producers. By tonnage c omparison, t h e magnesiu m oxide m arket is approximately 4 0 times bigger than the lithium carbonat e market and approximatel y 22 tim e s bigger tha n the graphite market.

COMPETENT PER S ON STATE M ENT

The information in t his report th a t relates to Mineral Res o urces under p inning the f e asibility stud y report e d in this rep o rt is based o n information compiled by the Compan y and review e d by Malcol m Castle , a competen t person who is a Member of the Austr a lasian Institu t e of Mining a nd Metallurg y (“AusI M M”). It fairl y represents, information a nd supporting document a tion prepare d by Malcol m Castle who is a con s ultant geolo g ist employed by Agricola M ining Consul t ants Pty Ltd. Mr Castle ha s suffici e nt experience that is rel e vant to the style of mineralisation a n d type of d e posits under consideration and t o the activity b eing underta k en to qualify a s a Compet e nt Person as defined in th e 2004 e dition of the “ Australasian Code for Re p orting of Ex p loration Res u lts, Mineral R esources an d Ore R e serves” (“JORC Code”). M alcolm Castl e consents to the inclusion in this report of the matter s based on his information in the f o rm and cont e xt in which it appears. Thi s information was prepare d and first disclosed u nder the JO R C Code 20 0 4. It has not been updat e d since to c o mply with th e JORC Code 2012 o n the basis that the info r mation has n ot materially changed since it was last report e d.

CONT A CT:

Andrej K Karpinski, E xecutive Ch a irman - Aust r alia: (08) 9474 6166, Inter n ational: +61 8 9474 6166

ABOU T KORAB R E SOURCES

P rojects

Winchester (Rum Jungle, NT) Magne s ium carbonate (MgCO3)

Geolsec (Rum Jungle, NT) P hosphate rock (P2O5)

Korab Resources Ltd is an intern a tional minin g and exploration company with operatio n s in Australi a and E u rope. Korab’ s projects in c lude Winche s ter magnesium carbonate deposit at B a tchelor in th e North e rn Territory o f Australia, G eolsec phos p hate rock d e posit also at Batchelor, a n d other gold, silver, copper, cobalt, nickel, an d polymetallic projects in A ustralia and o verseas. More informatio n about Korab’s projects can be s o urced from K orab’s websi t e at www.ko r ab.com.au. K orab’s share s are tr a ded on Aust r alian Securities Exchang e (ASX) and on the Berli n Stock Exch a nge (Berliner Börse) through Equiduct electronic trading plat f orm.

Batchelor (Rum Jungle, NT) Au, Ag, Zn, Pb, Ni, Cu, Co, Sc, Mn

Mt. Elephant (Ashburton, WA) Au, Cu Karratha (Pilbara, WA) Au, Co, Cu Marble Bar/Nullagine (Pilbara, WA) Au, Co, Cu, Li

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20 P R OWSE STRE E T, WEST PE R TH, WA, 600 5 , AUSTRALIA PO B OX 1958, WE S T PERTH, W A , 6872, AUST R ALIA TEL ( 08) 9474 6166 FAX (08) 93 2 2 6333 ACN 082 140 252

PAGE 11

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K O RA B R E SO U RC E S LIMI T ED KORAB H OUSE www.korab.co m .au

DISC L AIMER AND CAUTIONAR Y STATEME N T

Issue d Capital

Shares: 299 Mln Last Price: 3.4 cents Capital: $ 10.17 Mln

Listing Codes ASX: KOR BERLIN: C6S.BE

D irectors Andrej K. Karpinski Executive Chairman Director

Rodney H. Skeet Non-ex e cutive Director Daniel A. Smetana Non-ex e cutive Director

Anthony G. Wills Non-ex e cutive Director

P rojects

Winchester (Rum Jungle, NT) Magne s ium carbonate (MgCO3)

Geolsec (Rum Jungle, NT) P hosphate rock (P2O5)

Batchelor (Rum Jungle, NT) Au, Ag, Zn, Pb, Ni, Cu, Co, Sc, Mn

Mt. Elephant (Ashburton, WA) Au, Cu Karratha (Pilbara, WA) Au, Co, Cu Marble Bar/Nullagine (Pilbara, WA) Au, Co, Cu, Li

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Forwa r d-looking statements are s tatements that are not historical facts. W ords such a s “expect(s)”, “expe c ted”, “feel(s) ” , “believe(s)”, “will”, “may”, “anticipate ( s)”, “should” , “envisage(s ) ” and similar expre s sions are int e nded to iden t ify such forward-looking information. T h is informatio n includes, but is not limited to s tatements r e garding futu r e exploratio n results, re s ources, or r eserves, an d produ c tion. Anyone reading this report is cau t ioned not to place undue reliance on these forward - lookin g statements. All of such s t atements are subject to ri s ks and unce rt ainties (man y of which ar e difficul t to predict and which ge n erally are b e yond the co n trol of the C ompany) that could caus e actual results to dif f er materially from those e xpressed in, or implied or projected b y , the forward - lookin g information and stateme n ts. These ri s ks and unc e rtainties incl u de, but are not limited to: those relating to th e interpretati o n of exploration results (including drill r esults), the geology, grad e and c o ntinuity of mi n eral deposit s and conclusions of econo m ic evaluatio n s; risks relating to possibl e variati o ns in reserv e s, grade, min i ng dilution, o r e loss, and r e covery rates; risks relating to changes i n projec t financial an d technical p a rameters; ri s ks relating t o the potenti a l for delays in exploratio n programs, project e v aluation/revi e w, completi o n of feasibilit y studies and project development; risk s relate d to commodity prices and f oreign exch a nge rate fluctuations; risks related to failure to secur e adequ a te financing on a timely b asis and on acceptable t e rms; risks re l ated to dela y s in obtainin g gover n mental, or ot h er permits a n d approvals; risks related to security of tenure; and o ther risks an d uncert a inties relate d to the Com p any’s prosp e cts, properti e s and busin e ss strategy. Any forward - lookin g information contained in this report is provided a s of the dat e of this rep o rt. Except a s requir e d under applicable listing r ules and se c urities laws, t he Company does not int e nd, and doe s not as s ume any obl i gation, to up d ate this forw a rd-looking in f ormation. Pil b ara East an d Pilbara West projec t s are considered to be of early stage, gr a ss roots exploration statu s .

LIST O F TABLES

Table 1 Project estimated EBI T DA at US$ 1 05/T magn e sium carbo n ate price a n d US$0.80 exch a nge rate ......................... . ............................................................................................... 2 Table 2 Project estimated Fre e Cash Flow (in $ ‘000) a fter tax, inte r est, and de b t repay m ents at US$105/T magnesium carbonate price a nd US$0.8 0 exchange r ate ........... 3 Table 3 Project e s timated EB I TDA (in $ '000) - Sensiti v ity to magn e sium carb o nate selling price . . ...................................... . ............................................................................................... 3 Table 4 Free Cas h Flow Net P resent Valu e using a discount factor of 12%pa (i n $ '000) after t a x, interest, and debt re p ayments at various magnesium car b onate price s ................ 3 Table 5 Project estimated ope r ating costs (shovel and truck, drill a n d blast) at 3 75KT/Y capa c ity .................................. . ............................................................................................... 4 Table 6 Project estimated ope r ating costs (shovel and truck, drill a n d blast) at 7 50KT/Y capa c ity .................................. . ............................................................................................... 5 Table 7 Project estimated ope r ating costs (shovel and truck, drill a n d blast) at 1,000KT/Y capa c ity .................................. . ............................................................................................... 5 Table 8 Project estimated cap i tal costs .................................................................................. 6 Table 9 Open pit d esign criteri a ............................................................................................. 7 Table 10 Open pit slope desig n parameter s .......................................................................... 7 Table 11 Mineral r esources e s timates ................................................................................... 8 Table 12 Project p roduction s c hedule esti m ates ................................................................... 9 Table 13 Material modifying factors ..................................................................................... 1 4

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20 P R OWSE STRE E T, WEST PE R TH, WA, 600 5 , AUSTRALIA PO B OX 1958, WE S T PERTH, W A , 6872, AUST R ALIA TEL ( 08) 9474 6166 FAX (08) 93 2 2 6333 ACN 082 140 252 PAGE 12

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K O RA B R E SO U RC E S LIMI T ED KORAB H OUSE www.korab.co m .au

LIST O F FIGURES

Issue d Capital Shares: 299 Mln Last Price: 3.4 cents Capital: $ 10.17 Mln Listing Codes ASX: KOR BERLIN: C6S.BE D irectors Andrej K. Karpinski Executive Chairman Director Rodney H. Skeet Non-ex e cutive Director Daniel A. Smetana Non-ex e cutive Director Anthony G. Wills Non-ex e cutive Director

Figure	1 Site local ity plan ........ ................... ................... .................... ................... ................	16
Figure	2 Conceptu al layout ate nd of year3 – two-stage , bench-by- bench deve lopment
varian t	.................. .................... ................... ................... .................... ................... ................	16
Figure varian t	3 Conceptu .................. al layout ate .................... nd of year1 ................... 2 – two-stag ................... e, bench-by .................... -bench deve ................... lopment ................	17
Figure	4 Test mini ng of magne sium carbon ate rock usi ng drill-blast ing. ............. ................	17
Figure	5 Winchest er Magnesite deposit rel ative to basic infrastructu re and topo graphy ....	18

P rojects Winchester (Rum Jungle, NT) Magne s ium carbonate (MgCO3)

Geolsec (Rum Jungle, NT) P hosphate rock (P2O5)

Batchelor (Rum Jungle, NT) Au, Ag, Zn, Pb, Ni, Cu, Co, Sc, Mn Mt. Elephant (Ashburton, WA) Au, Cu Karratha (Pilbara, WA) Au, Co, Cu Marble Bar/Nullagine (Pilbara, WA) Au, Co, Cu, Li

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20 P R OWSE STRE E T, WEST PE R TH, WA, 600 5 , AUSTRALIA PO B OX 1958, WE S T PERTH, W A , 6872, AUST R ALIA TEL ( 08) 9474 6166 FAX (08) 93 2 2 6333 ACN 082 140 252

PAGE 13

				KO KO www RAB RABH .korab.com RE OUSE .au SOU RCE S L IMIT ED	KO KO www RAB RABH .korab.com RE OUSE .au SOU RCE S L IMIT ED	KO KO www RAB RABH .korab.com RE OUSE .au SOU RCE S L IMIT ED
	Issued Shar Last Price Capital: Listin BERL D Andrej K Exec Rodn Non-exe Daniel A Non-exe Antho Non-exe P (Rum J Magnes (Rum J P (Rum J Au, Ag, Zn, M (Ashb (P Marble Ba (P Capital es:299Mln :3.4cents $10.17Mln g Codes ASX: KOR IN: C6S.BE irectors . Karpinski utive Chairman Director ey H. Skeet cutive Director . Smetana cutive Director ny G. Wills cutive Director rojects Winchester ungle, NT) ium carbonate (MgCO3) Geolsec ungle, NT) hosphate rock (P2O5) Batchelor ungle, NT) Pb, Ni, Cu, Co, Sc, Mn t. Elephant urton, WA) Au, Cu Karratha ilbara, WA) Au, Co, Cu r/Nullagine ilbara, WA) Au, Co, Cu, Li			Table 1 3 Material mo difying factors
				M ODIFYING FAC TOR		COMMENTS
				Legal	W l 2 r e o c m s m r inchester de icence) ML305 0 October 204 enewed multip ntitled to a ro perating costs harges and ro agnesite rock ubsidiary Mel ineralisationw ights to uraniu posit is located 87. ML30587h 0 prior to whic le times. Eas yalty of 5% o , transportation yalties, as we mined from rose Gold Min ithin the proje m mineralisatio within the gr as an area of h date it canb t Africa Resou f net profits ac and sales co ll as marketing Winchester de es Pty Ltdo ct. Polymetalli n within the pro anted Mineral 352 ha and wa e renewed. Th rces Limited hieved afterd sts and all taxe costs and fe posit. Korab’s wns rights to ca Minerals Lt ject. Lease (mining s granted up to e lease can be (ASX: EAF) is eduction of al s, governmen es on sales o wholly owned 100% of gold d owns 90% o l t f f
				Infrastru cture	T B t p v G a a he deposit is atchelor road o Adelaide rail ower runs alo oltage power as pipeline ru vailable on sit lternative acco located 2km and 75km from line runs appro ng the Batche lines run acros ns approximate e. Accommoda mmodation is east from th Darwin porta ximately 5kmf lor road nextt s the project 2 ly 3 km easto tion is availab available in Da e town ofB long Stuart H rom the depos o the deposit. km to the east f the deposit.P le at Batchelor rwin. atchelor along ighway. Darwin it. High voltage Additional high of the deposit otable water is town, and the .
				Transpo rtation	S 9 A s s h V v H d n N w m l a w D ea transport 3km to the no rm includes tockpiles, hau hiploader is aulage trucks ictoria, NewS ia Stuart High ighway and is eposit. Curren ear the point ovember 201 ith the operato agnesite rock easing of the nd other equip hich will allo arwin. is available fro rth of the pro 850m rail sp l roads and a designed for is availablet outh Wales a way. Darwin transected by tly there aren where Batch 7, Korab repor r of Darwin po through Darw land, access to ment. HoA pr w for exportin m Darwin Port ject. Bulk mate ur, 1,500T/H 2,000T/H trav Panamax clas o the Darwin nd Queensland to Adelaide ra Batchelor road o rail loadingf elor road trans ted that it has rt. HoA envisag in Port EastA various port ovides the bas g the magnes ’s East Armw rials handling rail bottom elling gantrys s ships. Roa port and toS via Batchelor ilway line run approximatel acilities either ects the railw signed Heads es exportingo rm Wharf and facilities, and is for the final ium carbonate hich is located facility at Eas dump station hiploader. The d transport by outh Australia road and then s along Stuar y 5km from the at Batchelor o ay line. On8 of Agreemen f 500,000tpa o includes sub use of loaders port agreemen rock through t , , t r t f - , t
				Mineral Resources Cla ssification	T c he mineral res lassified as ind ources estima icated mineral tes that were u resources. sed to underpin this report are
				Marketi (Off-tak ng e or Sale Agre ements)	D o w p evelopmento ff-take agreem ith number artnerships, o f Winchesterd ents being com of parties re ff-take and long epends on on pleted succes garding pote -term sales ag e or more lon sfully. Korab is ntial joint ve reements. g-term sale, o in discussions ntures, equity r
				Mine Pe rmitting	W K b b a inchester dep orab’s wholly e established, e submitted to nd AusMag w osit is located owned subsid an appropriate the Northern ill need to recei on granted mi iary AusMagP Mine Manage Territory Depa ve the authoris neral lease ML ty Ltd. Before ment Plan (MM rtment of Min ation to implem 30587 held by the quarry can P) will need to es and Energy ent this MMP.
				Environ mental studies	E nvironmental impact studies have been u ndertaken for the Wincheste r
				20 PR POB TEL( ACN OWSE STREE OX 1958, WES 08) 9474 6166 082 140 252 T, WEST PER T PERTH, WA FAX (08) 932 TH, WA, 6005 , 6872, AUSTR 2 6333 , AUSTRALIA ALIA PAGE 14

				KO KO www RAB RABH .korab.com RE OUSE .au SOU RCE S L IMIT ED	KO KO www RAB RABH .korab.com RE OUSE .au SOU RCE S L IMIT ED
	Issued Shar Last Price Capital: Listin BERL D Andrej K Exec Rodn Non-exe Daniel A Non-exe Antho Non-exe P (Rum J Magnes (Rum J P (Rum J Au, Ag, Zn, M (Ashb (P Marble Ba (P Capital es:299Mln :3.4cents $10.17Mln g Codes ASX: KOR IN: C6S.BE irectors . Karpinski utive Chairman Director ey H. Skeet cutive Director . Smetana cutive Director ny G. Wills cutive Director rojects Winchester ungle, NT) ium carbonate (MgCO3) Geolsec ungle, NT) hosphate rock (P2O5) Batchelor ungle, NT) Pb, Ni, Cu, Co, Sc, Mn t. Elephant urton, WA) Au, Cu Karratha ilbara, WA) Au, Co, Cu r/Nullagine ilbara, WA) Au, Co, Cu, Li
					m w d t h s m i agnesite proj ill have a min eveloped asa han crushinga ave a verys orters will be ines in the vic n operation. ect and the as imal impact. Th magnesite roc nd screening. mall footprint. utilised were p inity of the tow sessment show is is primarily k quarry withn The quarry and Mobile equipm ossible. There n of Batchelor s that the ma because the p o processingo associated in ent, including are several roc , some abando gnesite quarry roject would be f the rock othe frastructure wil crushers and k quarries and ned, and some r l
				NativeT itle	W l H s p inchester dep and and no na owever, any ignificance tha rotected. osit and them tive title approv sacred sites t are located ineral leasea als would ber and sites of within the pro re located who equired to esta anthropologica ject area wou lly on freehold blish a quarry l or historica ld need to be . l
				Social	W O p a q N p d j l t p O i inchester min ther than con ersonnel direc nd operatingt uarry has a orthern Territ roviding reve irectly benefit obs. Whilst the abour, local bu his would not roject will aim ther than co nvolved in esta e would utilise tractor’s staff, tly employed he mine (fewer potential to ge ory governmen nue stream fo Territorians by re is no legal sinesses and have negative to utilise local ntractor’s staff blishing and op contractorso there wouldb by AusMag Pty than 10). In ad nerate signific t over the life r the governm supporting lo requirement to labour would be impact on the contractors op , there would erating the qua perating on c e relatively sm Ltd involved dition, Winche ant royalties of the project ent, the qua cal businesses utilise localc given prefere viability of th erating on ac be a numbe rry. ampaign basis all number o in establishing ster magnesite income for the . In addition to rry would also and providing ontractors and nce as long as e project. The ampaign basis r of local staf . f . f
				20 PR POB TEL( ACN OWSE STREE OX 1958, WES 08) 9474 6166 082 140 252 T, WEST PER T PERTH, WA FAX (08) 932 TH, WA, 6005 , 6872, AUSTR 2 6333 , AUSTRALIA ALIA PAGE 15

Batchelor (Rum Jungle, NT) Au, Ag, Zn, Pb, Ni, Cu, Co, Sc, Mn Mt. Elephant (Ashburton, WA) Au, Cu Karratha (Pilbara, WA) Au, Co, Cu Marble Bar/Nullagine (Pilbara, WA) Au, Co, Cu, Li

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Issue d Capital Shares: 299 Mln Last Price: 3.4 cents Capital: $ 10.17 Mln

Listing Codes ASX: KOR BERLIN: C6S.BE

D irectors

Andrej K. Karpinski Executive Chairman Director

Rodney H. Skeet Non-ex e cutive Director Daniel A. Smetana Non-ex e cutive Director

Anthony G. Wills Non-ex e cutive Director

P rojects

Winchester (Rum Jungle, NT) Magne s ium carbonate (MgCO3)

Geolsec (Rum Jungle, NT) P hosphate rock (P2O5)

Batchelor (Rum Jungle, NT) Au, Ag, Zn, Pb, Ni, Cu, Co, Sc, Mn Mt. Elephant (Ashburton, WA) Au, Cu Karratha (Pilbara, WA) Au, Co, Cu Marble Bar/Nullagine (Pilbara, WA) Au, Co, Cu, Li

K O RA B R E SO U RC E S LIMI T ED KORAB H OUSE www.korab.co m .au

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Figure 1 Site locality plan

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Figure 2 Conceptual layout at end of year 3 – two-stage, bench-by-bench development variant

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20 P R OWSE STRE E T, WEST PE R TH, WA, 600 5 , AUSTRALIA PO B OX 1958, WE S T PERTH, W A , 6872, AUST R ALIA TEL ( 08) 9474 6166 FAX (08) 93 2 2 6333 ACN 082 140 252

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Issue d Capital

Shares: 299 Mln Last Price: 3.4 cents Capital: $ 10.17 Mln

Listing Codes ASX: KOR BERLIN: C6S.BE

D irectors

Andrej K. Karpinski Executive Chairman Director

Rodney H. Skeet Non-ex e cutive Director Daniel A. Smetana Non-ex e cutive Director

Anthony G. Wills Non-ex e cutive Director

P rojects

Winchester (Rum Jungle, NT) Magne s ium carbonate (MgCO3)

Geolsec (Rum Jungle, NT) P hosphate rock (P2O5)

Batchelor (Rum Jungle, NT) Au, Ag, Zn, Pb, Ni, Cu, Co, Sc, Mn

Mt. Elephant (Ashburton, WA) Au, Cu Karratha (Pilbara, WA) Au, Co, Cu Marble Bar/Nullagine (Pilbara, WA) Au, Co, Cu, Li

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K O RA B R E SO U RC E S LIMI T ED KORAB H OUSE www.korab.co m .au

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Figure 3 Conceptual layout at end of year 12 – two-stage, bench-by-bench development variant

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Figure 4 Test mining of magnesium carbonate rock using drill-blasting.

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20 P R OWSE STRE E T, WEST PE R TH, WA, 600 5 , AUSTRALIA PO B OX 1958, WE S T PERTH, W A , 6872, AUST R ALIA TEL ( 08) 9474 6166 FAX (08) 93 2 2 6333 ACN 082 140 252 PAGE 17

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Issue d Capital

Shares: 299 Mln Last Price: 3.4 cents Capital: $ 10.17 Mln

Listing Codes

ASX: KOR BERLIN: C6S.BE

D irectors

Andrej K. Karpinski Executive Chairman Director

Rodney H. Skeet Non-ex e cutive Director Daniel A. Smetana Non-ex e cutive Director

K O RA B R E SO U RC E S LIMI T ED KORAB H OUSE www.korab.co m .au

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Figure 5 Winchester Magnesite deposit relative to basic infrastructure and topography

Anthony G. Wills Non-ex e cutive Director

P rojects

Winchester (Rum Jungle, NT) Magne s ium carbonate (MgCO3)

Geolsec (Rum Jungle, NT) P hosphate rock (P2O5)

Batchelor (Rum Jungle, NT) Au, Ag, Zn, Pb, Ni, Cu, Co, Sc, Mn

Mt. Elephant (Ashburton, WA) Au, Cu Karratha (Pilbara, WA) Au, Co, Cu Marble Bar/Nullagine (Pilbara, WA) Au, Co, Cu, Li

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20 P R OWSE STRE E T, WEST PE R TH, WA, 600 5 , AUSTRALIA PO B OX 1958, WE S T PERTH, W A , 6872, AUST R ALIA TEL ( 08) 9474 6166 FAX (08) 93 2 2 6333 ACN 082 140 252

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