KORAB RESOURCES LIMITED — Proxy Solicitation & Information Statement 2012

Sep 12, 2012

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Korab Resources Limited ACN 082 140 252

NOTICE OF GENERAL MEETING

TO BE HELD AT

BGC CENTRE, PLAZA LEVEL, CORNER HOWARD ST AND THE ESPLANADE, PERTH, WA AT 2 PM ON 15 OCTOBER 2012

incorporating the Explanatory Memorandum

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF YOU ARE IN ANY DOUBT ABOUT THE ACTION YOU SHOULD TAKE PLEASE CONSULT YOUR STOCKBROKER, SOLICITOR, ACCOUNTANT OR OTHER PROFESSIONAL ADVISER.

TO BE VALID, FORMS OF PROXY FOR USE AT THE EXTRAORDINARY GENERAL MEETING MUST BE COMPLETED AND RETURNED TO THE COMPANY NO LATER THAN 2 PM PERTH TIME ON 13 OCTOBER 2012

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Section A - Chairman’s Letter

Dear Shareholder

The Directors of Korab Resources Limited ( “Korab” or “the Company ”) have convened a General Meeting of Shareholders to be held on 15 October 2012 to ask Shareholders to:

• (a) Ratify previous issues of a total of 9,283,913 Shares at a deemed issue price of $0.081 cents each and 3,094,642 Options at a deemed issue price of $0.001 each, which were issued as consideration for the acquisition of fully paid ordinary shares in Melrose Gold Mines Limited and Lugansk Gold Limited. No money was raised; and

• (b) Approve an issue of 5,000,000 Options to Hartleys Limited at a deemed issue price of $0.001 each pursuant to the terms of a corporate advisory mandate with the Company.

Shareholders are encouraged to read the enclosed Explanatory Memorandum, to attend the General Meeting and to vote on the Resolutions. A proxy form is enclosed to enable any Shareholder who is unable to attend the General Meeting to vote at that meeting.

The Directors support Resolution 1 and Resolution 2 in the Notice of General Meeting. We recommend that you vote in favour of both Resolutions, the full details of which are contained in the Notice of General Meeting.

Yours faithfully

Andrej K. Karpinski Chairman

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Section B - Glossary

1. Definitions

The following definitions are used in the Chairman’s Letter, the Notice of General Meeting and the Explanatory Memorandum:

ASX means ASX Limited ACN 008 624 691;

Board or Board of Directors means the board of Directors of the Company;

Business Day means a day which is not a Saturday, Sunday or public holiday in Perth;

Chairman means chairman of the Company, who is currently Andrej Karpinski;

Company or Korab means Korab Resources Limited ACN 082 140 252;

Corporations Act means the Corporations Act 2001 (Cth);

Directors means the directors of the Company;

Explanatory Memorandum means the explanatory memorandum set out in Section D of this document;

General Meeting means the general meeting of the Company to be held on 15 October 2012 pursuant to the Notice of General Meeting;

Korab Share or Share means a fully paid ordinary share in the issued capital of the Company and Korab Shares or Shares means any two or more of them;

Korab Option or Option means an option to subscribe for one Korab Share with an exercise price of 25 cents per share and an expiry date of 28 August 2014 and Korab Options or Options means any two or more of them;

Korab Shareholder or Shareholder means a holder of a Share;

Listing Rules means the official listing rules issued and enforced by the ASX as amended from time to time;

Lugansk means Lugansk Gold Ltd ACN 128 063 801;

Melrose means Melrose Gold Mines Limited ACN 142 865 576;

Notice of General Meeting or Notice means the notice of General Meeting set out in Section C of this document;

Option or Korab Option means an option to subscribe for one Korab Share with an exercise price of 25 cents per share and an expiry date of 28 August 2014 and Options or Korab Options means any two or more of them;

Related Party has the meaning ascribed to that term by section 228 of the Corporations Act and Related Parties is a reference to more than one Related Party;

Resolution means a resolution passed by the requisite majority of members of the Company on a show of hands or by the requisite majority of votes given on a poll;

Share or Korab Share means a fully paid ordinary share in the issued capital of the Company and Shares or Korab Shares means any two or more of them;

Shareholder or Korab Shareholder means a holder of a Share;

$ means Australian dollars unless specified.

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Section C - Notice of General Meeting

NOTICE IS HEREBY GIVEN that a General Meeting of the Shareholders of Korab Resources Limited ACN 082 140 252 ( Korab or the Company ) will be held at BGC Centre, Plaza Level, Corner Howard St and The Esplanade, Perth , WA on 15 October 2012 at 2 pm (Western Standard time).

Defined terms used in this Notice of General Meeting have the meanings given to them in the Glossary accompanying this Notice.

1. Special business

1.1 Resolution 1: Ratify Issue of Shares and Options

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution:

"That for the purpose of Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 9,283,913 Shares at a deemed issue price of 8.1 cents each and 3,094,642 Options at a deemed issue price of $0.001, which were issued as consideration for the acquisition of fully paid ordinary shares in Melrose Gold Mines Limited and Lugansk Gold Limited, on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice.”

Voting Exclusion:

The Company will disregard any votes cast on this resolution by a person who participated in the issue and an associate of that person (or those persons). However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or if it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

1.2 Resolution 2: Approve Issue of Options

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution:

"That for the purpose of Listing Rule 7.1 and for all other purposes, Shareholders approve the issue of 5,000,000 Options to Hartleys Ltd on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice.”

Voting Exclusion:

The Company will disregard any votes cast on this resolution by a person who participated in the issue and an associate of that person (or those persons). However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or if it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

2. Determination of membership and voting entitlement

For the purpose of determining a person’s entitlement to vote at the General Meeting, a person will be recognised as a member of the Company and the holder of Shares if that person is registered as a holder of those Shares at 2 pm Perth time on 13 October 2012 , being 48 hours prior to the General Meeting.

3. Votes of members

On a show of hands, each member present in person or by proxy or, in the case of a body corporate, by a representative at the General Meeting shall have one vote.

On a poll, every member present in person or by attorney or by proxy (or, in the case of a body corporate, by a representative) shall have one vote for each Share held by him, her or it provided that all Shares are fully paid.

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4. Proxies

Please note that:

• (a) a member entitled to attend and vote at the General Meeting is entitled to appoint no more than two proxies;

• (b) an instrument appointing a proxy must be in the form of the proxy form attached as Section E to this Notice of General Meeting;

• (c) where more than one proxy is appointed, each proxy must be appointed to represent a specified proportion of the member's voting rights if a member appoints two proxies, and the appointment does not specify the proportion of the member's voting rights each proxy may exercise, each proxy may exercise one-half of the voting rights;

• (d) a proxy need not be a member of the Company;

• (e) a proxy form may specify the manner in which the proxy is to vote in respect of a particular Resolution and, where a proxy form so provides, the proxy is not entitled to vote on the Resolution except as specified in the proxy form;

• (f) a proxy has the authority to vote on the member's behalf as he or she thinks fit, on any motion to adjourn the Extraordinary General Meeting, or any other procedural motion, unless the member gives a direction to the contrary;

• (g) a valid proxy form will be deemed to confer authority to demand or join in demanding a poll;

• (h) to be valid, a proxy form must be signed by the member or the member's attorney or, if the member is a corporation, executed in accordance with the corporation's constitution and the Corporations Act (and may be signed on behalf of the corporation by its attorney); and

• (i) to be valid, a proxy form and the power of attorney or other authority (if any) under which it is signed (or an attested copy of it) must be received by no later than 2 pm on 13 October 2012 :

with the Company:

• in person: Korab Resources Ltd Suite 6, Level 1, 100 Mill Point Road South Perth WA 6151 Or - by mail: Korab Resources Ltd P O Box 195 South Perth WA 6951 Australia Or - by facsimile: (08) 9474 6266

By Order of the Board

Andrej K. Karpinski Chairman

Dated: 13 September 2012

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Section D - Explanatory Memorandum

1. Introduction

This Explanatory Memorandum contains the information needed for Korab Shareholders to assess the Resolutions to be put to them at the General Meeting of the Company on 15 October 2012. A Notice of General Meeting accompanies this document.

This Explanatory Memorandum, as well as the Notice of General Meeting, should be read carefully and in their entirety.

2. Resolution 1 – Ratify Issue of Shares and Options

2.1 Background

Subject to certain exceptions, none of which are relevant here, the Directors are restricted by Listing Rule 7.1 from issuing or agreeing to issue new securities in the Company in any 12 month period, which amount to more than 15% of the Company’s ordinary securities on issue, without Shareholder approval ("15% Limit").

Listing Rule 7.4 permits the ratification of previous issues of securities made without prior Shareholder approval, provided the issue did not breach the 15% threshold set by Listing Rule 7.1. The effect of such ratification is to restore a company's maximum discretionary power to issue further securities up to 15% of the issued capital of the company without requiring Shareholder approval.

The Directors seek ratification by the Company of this issue pursuant to Listing Rule 7.4, in order to limit the restrictive effect of Listing Rule 7.1 on any further issues of securities in the next 12 months.

Prior to the issue of 9,283,913 Shares and 3,094,642 Options on 4 September, the Company’s capacity to issue equity securities within the 15% Limit was 15,102,682 securities. Accordingly the issue of 9,283,913 Shares and 3,094,642 Options did not breach the 15% threshold set by Listing Rule 7.1. The following information is provided to Shareholders for the purposes of Listing Rule 7.5:

• (a) A total of 9,283,913 Shares were allotted at a deemed issue price of $0.081 each and 3,094,642 Options were allotted at a deemed issue price of $0.001 each on 4 September 2012.

• (b) The Shares are fully paid ordinary shares that rank equally in all respect with existing Shares, the terms of which are already in the public domain. The Options are the same class and rank equally in all respect with existing options that were issued under the prospectus dated 19 July 2012, the terms of which are set out below:

• (i) Each Option shall entitle the Option holder, when exercised, to one fully paid ordinary share in the Company.

• (ii) The Options are exercisable wholly or in part at any time prior to 5.00 pm (WST) on the expiry date of 28 August 2014 (“Expiry Date”), and at an exercise price of $0.25.

• (iii) Options not exercised by the Expiry Date shall lapse.

• (iv) Each Option may be exercised by notice in writing to the Company, together with the payment for the number of Shares in respect of which the Options are exercised, at any time before the Expiry Date. Any notice of exercise of an Option received by the Company will be deemed to be a notice of the exercise of that Option as at the date of receipt.

• (v) An Option does not confer the right to a change in exercise price or a change in the number of the underlying Shares over which the Option can be exercised.

• (vi) Shares issued upon exercise of the Options will be issued following receipt of all the relevant documents and payments and will rank equally in all respect with the then issued Shares.

• (vii) The Company will apply for quotation on ASX of the Options and following their exercise, for quotation of all Shares issued upon exercise of the Options.

• (viii) Subject to the Corporations Act, the Constitution and the Listing Rules, the Options are freely transferable.

• (ix) There are no participating rights or entitlements inherent in the Options and Option holders will not be entitled to participate in new issues of securities offered to Shareholders during the currency of the Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 10 Business Days after the issue is announced so as to give Option holders the opportunity to exercise their Options before the date for determining entitlements to participate in any issue.

• (x) If at any time the issued capital of the Company is reorganised, the rights of an Option holder are to be changed to the extent necessary to comply with the Listing Rules applying to a reorganisation of capital at the time of the reorganisation.

• (c) The Shares and Options were allotted to minority shareholders in Melrose and Lugansk for the purpose of acquiring their minority shareholdings in Melrose and Lugansk.

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• (d) None of the allottees are Related Parties to the Company, or associates of the Company’s Related Parties.

• (e) No funds were raised as a result of the issue. The consideration for the Shares and Options were 25,320,730 fully paid ordinary shares in Lugansk and 4,590,190 fully paid ordinary shares in Melrose.

2.2 Recommendation of Directors

If Resolution 1 is passed, the 15% Limit imposed by Listing Rule 7.1 will be renewed to the extent of the ratification. The Directors of the Company unanimously recommend that Shareholders vote in favour of Resolution 1 to maximise the Company’s flexibility to issue additional securities going forward.

3. Resolution 2 – Approve Issue of Options

3.1 Background

Subject to certain exceptions, none of which are relevant here, the Directors are restricted by Listing Rule 7.1 from issuing or agreeing to issue new securities in the Company in any 12 month period, which amount to more than 15% of the Company’s ordinary securities on issue, without Shareholder approval ("15% Limit").

The Directors wish to secure approval by the Company for this issue pursuant to Listing Rule 7.1 in order to limit the restrictive effect of Listing Rule 7.1 on any further issues of securities in the next 12 months.

The following information is provided to Shareholders for the purposes of Listing Rule 7.3:

• (a) A total of 5,000,000 Options will be allotted at a deemed issue price of $0.001 each to Hartleys Limited or their nominees, as consideration for corporate advisory services delivered to the Company under a corporate advisory mandate between the Company and Hartleys dated 21 March 2012.

• (b) The Options are the same class and rank equally in all respect with existing options that were issued under the prospectus dated 19 July 2012, the terms of which are identical to those set out above in relation to Resolution 1.

• (c) None of the allottees will be Related Parties to the Company, or associates of the Company’s Related Parties.

• (d) No funds will be raised as a result of the issue. Should the options be exercised this will lead to an injection of funds of $1,250,000 for working capital purposes.

• (e) The Options will be allotted on one date, and not on progressive dates, no later than 3 months after the date of the Meeting, if Shareholders approve Resolution 2.

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Proxy Form

Korab Resources Limited, ACN 082 140 252 (the Company)

I/We (name of member)

of

Shareholder Reference Number/Holder Identification Number

being a member/members of Korab Resources Limited ACN 082 140 252 appoint:

(Name of the proxy, or name of the office held by the proxy) (Address of the proxy)

or failing him or her, the Chairman of the meeting as my proxy vote on my behalf at the General Meeting of the Company to be held on 15 October 2012 and any adjournment of that meeting.

If two proxies are being appointed, the proportion of the voting rights that this proxy is authorised to exercise is %. (The Company will supply an additional form on request.)

PROXY INSTRUCTIONS

PLEASE NOTE THAT IF YOU APPOINTED THE CHAIRMAN OF THE MEETING AS YOUR PROXY, YOU HAVE TO MARK EITHER BOX A OR BOXES B . IF YOU DO NOT MARK BOX A , AND YOU HAVE NOT DIRECTED YOUR PROXY HOW TO VOTE ON THE RESOLUTIONS BY MARKING THE BOXES B , THE CHAIRMAN WILL NOT CAST YOUR VOTES ON THE RESOLUTIONS, AND YOUR VOTES WILL NOT BE COUNTED IN CALCULATING THE REQUIRED MAJORITY IF A POLL IS CALLED ON THE RESOLUTIONS. PLEASE NOTE THAT IF YOU MARK BOX A , THE CHAIRMAN WILL VOTE IN FAVOUR OF EACH RESOLUTION IN WHICH HE RECEIVES UNDIRECTED PROXIES.

If the Chairman of the meeting is appointed as your proxy, or may be appointed by default and you do not wish to direct your proxy how to vote as proxy in respect of a Resolution, please place a mark in the box. By marking this box, you acknowledge  A that the Chairman may exercise your proxy even if he has an interest in the outcome of the Resolutions and votes cast by him other than as proxy holder will be disregarded because of that interest.

If you wish to instruct your proxy how to vote, insert X in the appropriate column against each item of business set out below. Otherwise your proxy may vote as he/she thinks fit or abstain from voting.

I/We instruct my/our proxy vote as follows:

			For	Against	Abstain
Resolution	1	Ratify issue of Shares and Options				B
Resolution	2	Approve issue of Options			

Where this Proxy Form is signed under power of attorney, the Attorney(s) declare(s) that he/she/they has/have not received any notice of the revocation of such power.

Dated:

Signed: Signed: Name (printed): Name (printed): Capacity: Capacity:  If joint holders, each must sign.  Companies must execute:  under seal; or  by two Directors signing this Proxy Form; or  by a Director and a company secretary signing this Proxy Form; or  (where it is a proprietary company where the sole director is also the sole company secretary) by that director signing this Proxy Form; or  by authorised officer; or  by attorney.

Please forward your proxy by no later than 2 pm Perth time, on 13 October 2012 to Korab Resources Limited P O Box 195 South Perth WA 6951

or by fax to (08) 9474 6266

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