QUARTERLY ACTIVITIES REPORT TO 30 SEPTEMBER … · QUARTERLY ACTIVITIES REPORT TO ... Mt. Elephant...

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KORAB RESOURCES LIMITED KORAB HOUSE www.korab.com.au 20 PROWSE STREET, WEST PERTH, WA, 6005, AUSTRALIA PO BOX 1958, WEST PERTH, WA, 6872, AUSTRALIA TEL (08) 9474 6166 FAX (08) 9322 6333 ACN 082 140 252 PAGE 1 Issued Capital Shares: 213 mln Options: 4 mln Last Price: 2.2 cents ASX: KOR BERLIN: C6S.BE Projects Winchester (NT) Magnesium carbonate (MgCO3) Geolsec (NT) Phosphate rock (P2O5) Batchelor (NT) Au, Ag, Zn, Pb, Ni, Cu, Co Mt. Elephant (WA) Au, Cu Bobrikovo (UKR) Au, Ag, Pb 31 October 2016 QUARTERLY ACTIVITIES REPORT TO 30 SEPTEMBER 2016 This is a quarterly activities report for the period from 1 July 2016 to 30 September 2016 by Korab Resources Ltd (“ Korab”, or “ Company”) (ASX: KOR) and its subsidiaries (“ Korab Group”). OPERATIONS – EXPLORATION, EVALUATION AND DEVELOPMENT Winchester Magnesium Carbonate Project (Northern Territory) During the quarter Korab Group continued to work with potential buyers, partners and funders on moving the Winchester project towards production. Previously, (23 March 2016) the Company reported that it has entered into an agreement with Mr. Hong Wang (who represents interests associated with Chinese steel industry, banking and finance, construction and building materials) for a $6 million development funding for the Winchester magnesium carbonate project. Under this agreement, the $6 million development funding would be provided by way of funders acquiring a direct equity interest in AusMag Pty Ltd (subsidiary of Korab developing the Winchester project) and would be conditional on Korab (or AusMag) securing additional offtakes for magnesium carbonate rock. Under the same agreement, but as a separate transaction, in addition to arranging the $6 million development funding, Mr. Wang would provide Korab with $500,000 cash injection by personally subscribing for 10 million Korab shares. During the quarter Korab has received approximately $270,000 of the total of $500,000 to be invested personally by Mr. Wang. Following the end of the quarter, Korab has been advised by the Indian Ocean Group, who are the brokers and advisors for this placement, that the completion of the remaining tranche worth approximately $230,000 has been delayed until at least end of November 2016. However, this is not affecting the proposed $6 million investment by the parties associated with Mr. Wang, who intend to invest $6 million directly into Korab’s subsidiary AusMag Pty Ltd. This transaction, which is also brokered and advised by the Indian Ocean Group and which is a separate transaction from the $500,000 Korab share placement, is progressing as planned and the documentation for this investment is currently being finalised. During the quarter, Korab has been meeting with various stakeholders, including the Northern Territory mines department to discuss the development of the project, and is currently preparing plans to take it to the next stage. In parallel with this work, Korab is also preparing the documentation for the investors who are to provide $6 million funding for the project by taking direct equity stake equity in Korab’s subsidiary AusMag Pty Ltd (the Share Subscription Agreement and the Shareholder Agreement). Given that the investors will hold a minority stake in this subsidiary, it is necessary to have a formal agreement detailing the corporate and operational processes governing the operations of the magnesium carbonate business following the completion of the investment. These documents are currently being finalised. During the quarter, Korab’s Chairman was invited to speak at the Mining the Territory conference in Darwin about Korab’s projects with a focus on our Northern Territory operations. Winchester Project Technical Information On 10 March 2015, Korab released the results of the expanded pre-feasibility study into Winchester magnesite quarry and its potential earnings, costs, free cashflow, and net present value. Results of this expanded study have shown that the project has very attractive economics with an aggregate EBITDA of $395 mln over quarry life and attractive long-run annual EBITDA of $32 For personal use only

Transcript of QUARTERLY ACTIVITIES REPORT TO 30 SEPTEMBER … · QUARTERLY ACTIVITIES REPORT TO ... Mt. Elephant...

Page 1: QUARTERLY ACTIVITIES REPORT TO 30 SEPTEMBER … · QUARTERLY ACTIVITIES REPORT TO ... Mt. Elephant (WA) Au, Cu ... Full text of the report can be accessed through the link below:

KORAB RESOURCES LIMITED KORAB HOUSE www.korab.com.au

20 PROWSE STREET, WEST PERTH, WA, 6005, AUSTRALIA

PO BOX 1958, WEST PERTH, WA, 6872, AUSTRALIA TEL (08) 9474 6166 FAX (08) 9322 6333 ACN 082 140 252 PAGE 1

Issued Capital

Shares: 213 mln Options: 4 mln

Last Price: 2.2 cents

ASX: KOR BERLIN: C6S.BE

Projects

Winchester (NT) Magnesium carbonate

(MgCO3)

Geolsec (NT) Phosphate rock

(P2O5)

Batchelor (NT) Au, Ag, Zn, Pb, Ni, Cu, Co

Mt. Elephant (WA) Au, Cu

Bobrikovo (UKR) Au, Ag, Pb

31 October 2016

QUARTERLY ACTIVITIES REPORT TO 30 SEPTEMBER 2016 This is a quarterly activities report for the period from 1 July 2016 to 30 September 2016 by Korab Resources Ltd (“Korab”, or “Company”) (ASX: KOR) and its subsidiaries (“Korab Group”).

OPERATIONS – EXPLORATION, EVALUATION AND DEVELOPMENT Winchester Magnesium Carbonate Project (Northern Territory)

During the quarter Korab Group continued to work with potential buyers, partners and funders on moving the Winchester project towards production.

Previously, (23 March 2016) the Company reported that it has entered into an agreement with Mr. Hong Wang (who represents interests associated with Chinese steel industry, banking and finance, construction and building materials) for a $6 million development funding for the Winchester magnesium carbonate project. Under this agreement, the $6 million development funding would be provided by way of funders acquiring a direct equity interest in AusMag Pty Ltd (subsidiary of Korab developing the Winchester project) and would be conditional on Korab (or AusMag) securing additional offtakes for magnesium carbonate rock. Under the same agreement, but as a separate transaction, in addition to arranging the $6 million development funding, Mr. Wang would provide Korab with $500,000 cash injection by personally subscribing for 10 million Korab shares.

During the quarter Korab has received approximately $270,000 of the total of $500,000 to be invested personally by Mr. Wang. Following the end of the quarter, Korab has been advised by the Indian Ocean Group, who are the brokers and advisors for this placement, that the completion of the remaining tranche worth approximately $230,000 has been delayed until at least end of November 2016. However, this is not affecting the proposed $6 million investment by the parties associated with Mr. Wang, who intend to invest $6 million directly into Korab’s subsidiary AusMag Pty Ltd. This transaction, which is also brokered and advised by the Indian Ocean Group and which is a separate transaction from the $500,000 Korab share placement, is progressing as planned and the documentation for this investment is currently being finalised.

During the quarter, Korab has been meeting with various stakeholders, including the Northern Territory mines department to discuss the development of the project, and is currently preparing plans to take it to the next stage. In parallel with this work, Korab is also preparing the documentation for the investors who are to provide $6 million funding for the project by taking direct equity stake equity in Korab’s subsidiary AusMag Pty Ltd (the Share Subscription Agreement and the Shareholder Agreement). Given that the investors will hold a minority stake in this subsidiary, it is necessary to have a formal agreement detailing the corporate and operational processes governing the operations of the magnesium carbonate business following the completion of the investment. These documents are currently being finalised.

During the quarter, Korab’s Chairman was invited to speak at the Mining the Territory conference in Darwin about Korab’s projects with a focus on our Northern Territory operations.

Winchester Project Technical Information

On 10 March 2015, Korab released the results of the expanded pre-feasibility study into Winchester magnesite quarry and its potential earnings, costs, free cashflow, and net present value.

Results of this expanded study have shown that the project has very attractive economics with an aggregate EBITDA of $395 mln over quarry life and attractive long-run annual EBITDA of $32

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KORAB RESOURCES LIMITED KORAB HOUSE www.korab.com.au

20 PROWSE STREET, WEST PERTH, WA, 6005, AUSTRALIA

PO BOX 1958, WEST PERTH, WA, 6872, AUSTRALIA TEL (08) 9474 6166 FAX (08) 9322 6333 ACN 082 140 252 PAGE 2

Issued Capital

Shares: 213 mln Options: 4 mln

Last Price: 2.2 cents

ASX: KOR BERLIN: C6S.BE

Projects

Winchester (NT) Magnesium carbonate

(MgCO3)

Geolsec (NT) Phosphate rock

(P2O5)

Batchelor (NT) Au, Ag, Zn, Pb, Ni, Cu, Co

Mt. Elephant (WA) Au, Cu

Bobrikovo (UKR) Au, Ag, Pb

mln/year (at 800kt/year of rock sales). The capital and start-up costs were estimated at around $4 mln (including quarry costs of approximately $1.2 mln and a contingency of ~$1mln). Full text of the report can be accessed through the link below:

http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01606646

Deposit is located approximately 85km south of the port of Darwin in the Northern Territory (see Figure 1, Figure 2 and Figure 4). It is less than a hundred meters from sealed road, and less than 5km from railway line linking Winchester with Darwin port and major Australian cities.

The Company confirms that all material assumptions underpinning the production target in that announcement continue to apply and have not materially changed. This expanded study included the estimates of revenues and various additional material costs such as haulage, port charges, interest, debt repayment, royalties, overheads, etc. and evaluated the economics of Winchester quarry assuming its development as a direct shipping ore (DSO) operation.

This pre-feasibility study was based on the indicated mineral resource only. Current estimated mineral resources at Winchester, including both indicated and inferred categories, are shown in the following table: Table 1 Mineral resources estimates

At 40% MgO Cut-Off MgCO Mass MgO grade

‘000 Tonnes %

Indicated Resources 12,200 43.1

Inferred Resources 4,400 43.6

Total 16,600 43.2

There has been no change to the Winchester mineral resource estimate since it was last reported in the Annual Report 2016. This information was prepared and first disclosed under the JORC Code 2004 on 17 July 2007. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported. The author of this report is not aware of any new information or data that materially affects the information included in the report released on 17 July 2007 and, in the case of mineral resources that all the material assumptions and technical parameters underpinning the estimates in the report released on 17 July 2007 continue to apply and have not materially changed. The form and context in which the findings of the report released on 17 July 2007 are presented have not been materially modified.

Market for magnesium carbonate has been growing at a strong historical trend rate over several decades with the trend pointing to yet higher consumption over coming years. The main uses for magnesite is in production of various types of magnesium oxides. Magnesium carbonate is also used to produce magnesium metal which is the lightest of all metals, being about two-thirds lighter than aluminium but stronger then steel. Magnesium is non-toxic, non-magnetic, has high-impact strength and is resistant to denting.

The main sectors where magnesium oxide is used include: refractory bricks which are used to line steel and iron furnaces; production of flame retardants; production of fire resistant and moisture resistant building materials like mag-wall, MgO board and mag-cement; production of magnesium alloys used extensively in cars, airplanes, tanks, APC-s and other defence equipment; hydrometallurgy (primarily for nickel and cobalt production); water purification and soil treatment and feedstock.

Experts expect that the market for magnesium carbonate will continue to expand due to the growth in all these sectors, however the potential game changer is the recent development of magnesium-ion

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KORAB RESOURCES LIMITED KORAB HOUSE www.korab.com.au

20 PROWSE STREET, WEST PERTH, WA, 6005, AUSTRALIA

PO BOX 1958, WEST PERTH, WA, 6872, AUSTRALIA TEL (08) 9474 6166 FAX (08) 9322 6333 ACN 082 140 252 PAGE 3

Issued Capital

Shares: 213 mln Options: 4 mln

Last Price: 2.2 cents

ASX: KOR BERLIN: C6S.BE

Projects

Winchester (NT) Magnesium carbonate

(MgCO3)

Geolsec (NT) Phosphate rock

(P2O5)

Batchelor (NT) Au, Ag, Zn, Pb, Ni, Cu, Co

Mt. Elephant (WA) Au, Cu

Bobrikovo (UKR) Au, Ag, Pb

batteries which have 8 to 12 times greater capacity than lithium-ion batteries and can be charged in as little as 36 minutes. Magnesium-ion battery's charge/discharge efficiency is 5 times higher than a lithium-ion battery. Another advantage of magnesium-ion batteries is their ability to perform at temperatures as low as -30°C and as high as +55°C whereas lithium-ion batteries cease to function at around -15°C. Additional benefit of magnesium-ion batteries is that they do not use graphite and consequently are not dependant on supply of this relatively expensive material.

The key determinant of the success of a magnesite project is the quality of its magnesium carbonate rock and its proximity to transport infrastructure. Winchester magnesite project has the advantage of being one of the highest grade magnesium carbonate deposits and also being located in close proximity to rail, roads, and a major deep sea port. The deposit is a shallow, flat lying ore body covered by approximately 5m of clay overburden and it can be mined using easy open cut method, essentially as a quarry.

Rock Phosphate Geolsec Project (Northern Territory)

During the quarter, Korab Group continued the marketing of the Geolsec phosphate rock but despite significant effort none of the sale leads have been converted to sales to date. On 8 September, 2016 Korab announced that the Geolsec project has been put under review with the objective of rationalising Company’s use and outlays of financial, human and other resources taking into consideration the external and internal demands, constraints and impediments. The review is still in progress, however the initial view is that in the present depressed and oversupplied rock phosphate market, the project would require a significant marketing effort to get-up to the required minimum level of actual sales to justify the ongoing costs of running the project.

There are various options currently being considered, one of them is leasing of the project to one of the current phosphate rock producers and handing over to them the operations of the project in exchange for an ongoing leasing fee plus a royalty on each tonne of rock phosphate extracted. The new operator would also be responsible for marketing, planning, mining, and compliance. The obvious benefit of this would be to allow Korab to derive potentially significant revenue without having to expend further funds and other resources on marketing of rock and the operation of Geolsec project.

Location of the Geolsec project (see Figure 1, Figure 2 and Figure 3), just south of the port of Darwin and within a short distance to majority of Asian ports gives Geolsec significant shipping advantage over phosphate producers located in Africa and the Middle East when supplying Indian, Asian, Australian and New Zealand buyers and distributors. Furthermore, being located next to trans-continental rail-way link and highway connecting Darwin to Queensland, NSW, Victoria and the Ord River agricultural region in WA, Geolsec has excellent access to the main agricultural regions in all Australian states.

Bobrikovo Gold and Silver Project (Ukraine)

There has been little activity during the quarter at the Bobrikovo project. During and following the end of the quarter Korab Group continued engagement with various stakeholders, potential partners and investors with the view to re-commencing operations at this project.

Batchelor/Green Alligator Polymetallic Project (Northern Territory)

During the quarter Korab continued to explore the Batchelor/Green Alligator Polymetallic Project for various metals and specialty minerals. No material results were generated. Material results will be announced to the market when available.

Zinc, Silver and Lead

On 24 August, 2016 Korab reported that it has received information regarding historical drilling intercepts of high grade zinc, lead and silver mineralisation within Korab’s exploration ground near

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KORAB RESOURCES LIMITED KORAB HOUSE www.korab.com.au

20 PROWSE STREET, WEST PERTH, WA, 6005, AUSTRALIA

PO BOX 1958, WEST PERTH, WA, 6872, AUSTRALIA TEL (08) 9474 6166 FAX (08) 9322 6333 ACN 082 140 252 PAGE 4

Issued Capital

Shares: 213 mln Options: 4 mln

Last Price: 2.2 cents

ASX: KOR BERLIN: C6S.BE

Projects

Winchester (NT) Magnesium carbonate

(MgCO3)

Geolsec (NT) Phosphate rock

(P2O5)

Batchelor (NT) Au, Ag, Zn, Pb, Ni, Cu, Co

Mt. Elephant (WA) Au, Cu

Bobrikovo (UKR) Au, Ag, Pb

Batchelor town. This information indicated that the zinc intercepts occur in the same rock layers as the Woodcutters zinc, lead and silver mine located 8km to the north and are of similar tenor (see Figure 5).

Consequently, Korab commenced review of the historical drill data for the area to assess the potential for Batchelor project to hold viable zinc mineralisation. This assessment work was undertaken in parallel with the ongoing work on the development of the magnesium carbonate Winchester mine which is located 4km to the north. The review of zinc potential is almost complete and the results are currently being verified and collated. They will be reported shortly.

Lithium

Following the end of the quarter, on 19 October 2016, Korab reported that it has commenced exploration for lithium at the Batchelor project following discoveries of lithium mineralisation and pegmatite swarms by Core Exploration, Liontown Resources and Lithium Australia to the north-west from Batchelor project, and the recent “pegging” activity by Core Exploration to the west and north-west from Korab ground (see Figure 7). For details of other companies’ exploration results see ASX reports by Core Exploration, Liontown Resources and Lithium Australia over the last few months.

Finniss project (where lithium and pegmatites were reported by Core Exploration, Liontown Resources and Lithium Australia) and Batchelor project are both located within the western part of the Pine Creek Orogen (PCO) just south of Darwin in the Northern Territory. Finniss project area is located on the west and north west sides of the Rum Jungle Complex (which comprises Rum Jungle and Waterhouse granitic domes consisting of peraluminous granites), and Batchelor project is located on the south, south east and east sides.

According to Northern Territory Geological Survey (NTGS) reports, lithium mineralisation in the area is related to tin and tantalum occurrences and occurs primarily in pegmatite dykes and sills within the Burrell Creek Formation of the Finniss River Group. Whilst government reports show presence of tin within Korab’s ground and NTGS reports pegmatite and quartz being present at surface and at depth within the area (quartz is often what remains from pegmatite after a prolonged weathering process), historical exploration by previous tenement holders was limited to other metals.

Consequently, they have not tested the pegmatites for tin or lithium and have not followed-up these previously discovered occurrences. Korab has in the past primarily targeted nickel, copper and PGM in the area. Consequently, most of our exploration was limited to sampling and drill testing mafic and ultramafic units within the area. As a result there are very few drill holes on Korab’s ground which have been assayed for tin and we are not aware of any drill or rock chip samples which have been assayed for lithium.

Notwithstanding the above, our review of the geology of the area of interest and of the geological setting of the recent lithium discoveries to the north-west suggests sufficient potential for lithium mineralisation to warrant a further examination. As part of the initial phase of the exploration, Korab will continue detailed review of historical exploration data, surface and downhole geochemistry, RAB, RC and diamond core drill logs and outcrop mapping. Korab will also undertake its own mapping and sampling program. Proximity of the rocks within Korab’s ground (which are shown to be the main lithium hosting rocks at Finniss project) to S-type granites of the Rum Jungle and Waterhouse granitic domes further enhances this potential. According to NTGS and USGS reports, S-type granites are often associated with LCT pegmatites and multiple wide-spread pegmatite dykes and outcrops have been reported by NTGS near the margins of these granitic domes. The LCT pegmatites are typically associated with late tectonic peraluminous granites (see Figure 6), are some distance from the source and their emplacement is controlled at least in part by shear zones. Quartz and feldspars are the dominant minerals that crystallize from granitic melts, and the rare elements are highly incompatible in these minerals. Thus, extreme fractionation resulting from extended crystallization of quartz and feldspars can generate very high concentrations of rare elements in residual melts.

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Page 5: QUARTERLY ACTIVITIES REPORT TO 30 SEPTEMBER … · QUARTERLY ACTIVITIES REPORT TO ... Mt. Elephant (WA) Au, Cu ... Full text of the report can be accessed through the link below:

KORAB RESOURCES LIMITED KORAB HOUSE www.korab.com.au

20 PROWSE STREET, WEST PERTH, WA, 6005, AUSTRALIA

PO BOX 1958, WEST PERTH, WA, 6872, AUSTRALIA TEL (08) 9474 6166 FAX (08) 9322 6333 ACN 082 140 252 PAGE 5

Issued Capital

Shares: 213 mln Options: 4 mln

Last Price: 2.2 cents

ASX: KOR BERLIN: C6S.BE

Projects

Winchester (NT) Magnesium carbonate

(MgCO3)

Geolsec (NT) Phosphate rock

(P2O5)

Batchelor (NT) Au, Ag, Zn, Pb, Ni, Cu, Co

Mt. Elephant (WA) Au, Cu

Bobrikovo (UKR) Au, Ag, Pb

Similarly, individual pegmatites also consist largely of quartz and feldspar, and the rare elements are concentrated in small volumes. The ionic radius of Li is much smaller than that of the other alkali metals, and Li partitions into micas, cordierite, and amphiboles via coupled substitution reactions.

Within the Pine Creek Orogen the target mineralization is associated with granitic intrusives. The majority of deposits are found in quartz veins and pegmatite dykes hosted by Early to Middle Proterozoic metasediments. The metasedimentary rocks are interbedded shale, sandstone, conglomerate and flyshoid sediments of the Burrell Creek Formation of the Finniss River Group.. The pegmatites intrude the metasediments and have originated from the S-Type Two Sisters Granite which forms a large discordant batholith in the western portion of the Bynoe district. Likewise, quartz-tourmaline veins are fairly common at the margins of the Rum Jungle Complex and in the surrounding metasediments.

The majority of the Finniss pegmatite veins are zoned, lenticular in shape, irregular in distribution and intrude at least in part along the foliation and bedding planes of the country rock. The pegmatite dykes and quartz veins have preferentially intruded the less competent shale units of the Burrell Creek Formation. In outcrop, the pegmatite dykes are weathered to quartz rubble, kaolinitic clay and muscovite. Tertiary processes have leached and intensely weathered the pegmatites to depths in excess of 20 m. The decomposed nature of the pegmatites provided easy exploitation by tin miners at the turn of last century but has hindered an understanding of their petrology, chemistry and morphology. The bulk mineralogy of unweathered pegmatite consists of microcline, perthite, K-feldspar, albite, muscovite and quartz. Minor components include cassiterite, tantalite-columbite, amblygonite, magnetite, zircon, ilmenite, garnet and tourmaline. In outcrop, primary mineralogy is preserved only in quartz-rich samples that either consist solely of quartz and muscovite, or consist of feldspar that is protected from decomposition by quartz-mica shielding. Feldspar is otherwise reduced to kaolin. At surface, veins and dykes of pegmatite at the Rum Jungle Complex appear to consist mainly of microcline and quartz, with small but varying amounts of muscovite. NTGS and the Commonwealth Bureau of Mineral Resources further report that there is also increased level of tungsten and reported presence of tourmaline in drill cuttings taken from this area providing further evidence of the area’s prospectivity.

Sundance Gold Project (Northern Territory)

Sundance gold mine is located on granted mining leases adjoining the Winchester magnesium carbonate mining lease. Gold occurs in auriferous pipes which were historically mined by open cut and the ore was trucked for processing to nearby mills. Korab has been continuing a review of this project to assess its viability as a supplier of ore for toll treatment and whilst no decision to mine has been made, Sundance potential has been enhanced by inclusion of more modern mining techniques in the assessment. Project evaluation suggests that the it could be mined using vertical mining equipment supplied by Bauer (see Figure 8). Sundance auriferous pipes are vertical to sub vertical and are ideal for this type of equipment (see Figure 9). Using Bauer vertical mining equipment would allow for targeted excavation of auriferous “pipes, reducing waste/ore ratio to a minimum (see Figure 10). Ore could then be trucked via Stuart Highway to Union Reefs mill for processing (see Figure 11 for location). Historically, large quantity of the gold ore from Sundance mine was treated at Union Reefs mill with 92%-95% gold recoveries.

Ashburton Downs Copper and Gold Project (Western Australia)

Exploration of the Ashburton Downs project continued during the quarter. No material results were generated. Material results will be announced to the market when available. MRDC (a third party which was earning interest in the project) continued to be having difficulty raising funds during the quarter. On 22 July 2916, Korab reported that MRDC has failed to meet calls on it equity in the project and has been issued with a notice. On 11 August 2016, Korab reported that MRDC has not made the payment as required by the notice and consequently its equity has been forfeited. As a

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KORAB RESOURCES LIMITED KORAB HOUSE www.korab.com.au

20 PROWSE STREET, WEST PERTH, WA, 6005, AUSTRALIA

PO BOX 1958, WEST PERTH, WA, 6872, AUSTRALIA TEL (08) 9474 6166 FAX (08) 9322 6333 ACN 082 140 252 PAGE 6

Issued Capital

Shares: 213 mln Options: 4 mln

Last Price: 2.2 cents

ASX: KOR BERLIN: C6S.BE

Projects

Winchester (NT) Magnesium carbonate

(MgCO3)

Geolsec (NT) Phosphate rock

(P2O5)

Batchelor (NT) Au, Ag, Zn, Pb, Ni, Cu, Co

Mt. Elephant (WA) Au, Cu

Bobrikovo (UKR) Au, Ag, Pb

result Korab Group became the sole owner of the Ashburton Downs project. Ashburton Downs project is also known as Mt. Elephant project.

OPERATIONS – CORPORATE During quarter Korab repaid the outstanding balance of the $250,000 convertible loan and has raised approximately $270,000 by issue of shares to Mr. Wang as part of the $500,000 placement announced on 23 March 2016..

CONTACT:

Andrej K Karpinski, Executive Chairman - Australia: (08) 9474 6166, International: +61 8 9474 6166

ABOUT KORAB RESOURCES

Korab Resources Ltd is an international mining and exploration company with operations in Australia and Europe. Korab’s projects include Winchester magnesium carbonate deposit and Geolsec phosphate rock deposit at Batchelor in the Northern Territory of Australia as well as a gold and silver deposit at Bobrikovo in eastern Ukraine,. The Company also explores for gold and copper at Ashburton Downs in Western Australia and for various metals and specialty minerals at Batchelor in the Northern Territory. More information about Korab’s projects can be sourced from Korab’s website at www.korab.com.au. Korab’s shares are traded on Australian Securities Exchange (ASX) and on the Berlin Stock Exchange (Berliner Börse) through Equiduct electronic trading platform.

INTERESTS IN MINING TENEMENTS

Project/Tenements Location Held at end of quarter

Acquired during quarter

Disposed during quarter

Batchelor/Green Alligator Project

Northern Territory, Australia

EL29550 100%MLN512 100% MLN513 100% MLN514 100% MLN515 100% MLN542 100% MLN543 100% EL31341 100% 100% Winchester Project Northern Territory ML30587 100% Geolsec Project Northern Territory ML27362 100% Bobrikovo Project Ukraine BKB169 100% 4420381100646545 100% 1589 100% 27304101 100% Ashburton Downs Project: Western Australia,

Australia

E08/2115 100% 75% E08/2307 100% 75% E52/2724 E08/2756 E08/2757

100%100% 100%

75% 75% 75%

Farm-in agreements/Tenements

Location Held at end of quarter

Acquired during quarter

Disposed during quarter

none Farm-out

agreements/Tenements Location Held at end of

quarter Acquired during

quarter Disposed during

quarter none

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KORAB RESOURCES LIMITED KORAB HOUSE www.korab.com.au

20 PROWSE STREET, WEST PERTH, WA, 6005, AUSTRALIA

PO BOX 1958, WEST PERTH, WA, 6872, AUSTRALIA TEL (08) 9474 6166 FAX (08) 9322 6333 ACN 082 140 252 PAGE 7

Issued Capital

Shares: 213 mln Options: 4 mln

Last Price: 2.2 cents

ASX: KOR BERLIN: C6S.BE

Projects

Winchester (NT) Magnesium carbonate

(MgCO3)

Geolsec (NT) Phosphate rock

(P2O5)

Batchelor (NT) Au, Ag, Zn, Pb, Ni, Cu, Co

Mt. Elephant (WA) Au, Cu

Bobrikovo (UKR) Au, Ag, Pb

Figure 1 Location of Winchester proposed quarry relative to East Arm Wharf at Darwin Port

Figure 2 Location of Geolsec and Winchester relative to local infrastructure, roads and rail

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Page 8: QUARTERLY ACTIVITIES REPORT TO 30 SEPTEMBER … · QUARTERLY ACTIVITIES REPORT TO ... Mt. Elephant (WA) Au, Cu ... Full text of the report can be accessed through the link below:

KORAB RESOURCES LIMITED KORAB HOUSE www.korab.com.au

20 PROWSE STREET, WEST PERTH, WA, 6005, AUSTRALIA

PO BOX 1958, WEST PERTH, WA, 6872, AUSTRALIA TEL (08) 9474 6166 FAX (08) 9322 6333 ACN 082 140 252 PAGE 8

Issued Capital

Shares: 213 mln Options: 4 mln

Last Price: 2.2 cents

ASX: KOR BERLIN: C6S.BE

Projects

Winchester (NT) Magnesium carbonate

(MgCO3)

Geolsec (NT) Phosphate rock

(P2O5)

Batchelor (NT) Au, Ag, Zn, Pb, Ni, Cu, Co

Mt. Elephant (WA) Au, Cu

Bobrikovo (UKR) Au, Ag, Pb

Figure 3 Strategic location of Darwin port

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Page 9: QUARTERLY ACTIVITIES REPORT TO 30 SEPTEMBER … · QUARTERLY ACTIVITIES REPORT TO ... Mt. Elephant (WA) Au, Cu ... Full text of the report can be accessed through the link below:

KORAB RESOURCES LIMITED KORAB HOUSE www.korab.com.au

20 PROWSE STREET, WEST PERTH, WA, 6005, AUSTRALIA

PO BOX 1958, WEST PERTH, WA, 6872, AUSTRALIA TEL (08) 9474 6166 FAX (08) 9322 6333 ACN 082 140 252 PAGE 9

Issued Capital

Shares: 213 mln Options: 4 mln

Last Price: 2.2 cents

ASX: KOR BERLIN: C6S.BE

Projects

Winchester (NT) Magnesium carbonate

(MgCO3)

Geolsec (NT) Phosphate rock

(P2O5)

Batchelor (NT) Au, Ag, Zn, Pb, Ni, Cu, Co

Mt. Elephant (WA) Au, Cu

Bobrikovo (UKR) Au, Ag, Pb

Figure 4 Site locality plan

Figure 5 Zinc/base metals horizon at Batchelor F

or p

erso

nal u

se o

nly

Page 10: QUARTERLY ACTIVITIES REPORT TO 30 SEPTEMBER … · QUARTERLY ACTIVITIES REPORT TO ... Mt. Elephant (WA) Au, Cu ... Full text of the report can be accessed through the link below:

KORAB RESOURCES LIMITED KORAB HOUSE www.korab.com.au

20 PROWSE STREET, WEST PERTH, WA, 6005, AUSTRALIA

PO BOX 1958, WEST PERTH, WA, 6872, AUSTRALIA TEL (08) 9474 6166 FAX (08) 9322 6333 ACN 082 140 252 PAGE 10

Issued Capital

Shares: 213 mln Options: 4 mln

Last Price: 2.2 cents

ASX: KOR BERLIN: C6S.BE

Projects

Winchester (NT) Magnesium carbonate

(MgCO3)

Geolsec (NT) Phosphate rock

(P2O5)

Batchelor (NT) Au, Ag, Zn, Pb, Ni, Cu, Co

Mt. Elephant (WA) Au, Cu

Bobrikovo (UKR) Au, Ag, Pb

Figure 6 Pegmatite types associations

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per

sona

l use

onl

y

Page 11: QUARTERLY ACTIVITIES REPORT TO 30 SEPTEMBER … · QUARTERLY ACTIVITIES REPORT TO ... Mt. Elephant (WA) Au, Cu ... Full text of the report can be accessed through the link below:

KORAB RESOURCES LIMITED KORAB HOUSE www.korab.com.au

20 PROWSE STREET, WEST PERTH, WA, 6005, AUSTRALIA

PO BOX 1958, WEST PERTH, WA, 6872, AUSTRALIA TEL (08) 9474 6166 FAX (08) 9322 6333 ACN 082 140 252 PAGE 11

Issued Capital

Shares: 213 mln Options: 4 mln

Last Price: 2.2 cents

ASX: KOR BERLIN: C6S.BE

Projects

Winchester (NT) Magnesium carbonate

(MgCO3)

Geolsec (NT) Phosphate rock

(P2O5)

Batchelor (NT) Au, Ag, Zn, Pb, Ni, Cu, Co

Mt. Elephant (WA) Au, Cu

Bobrikovo (UKR) Au, Ag, Pb

Figure 7 Tenement locations on geology, tin, lithium and pegmatites

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l use

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Page 12: QUARTERLY ACTIVITIES REPORT TO 30 SEPTEMBER … · QUARTERLY ACTIVITIES REPORT TO ... Mt. Elephant (WA) Au, Cu ... Full text of the report can be accessed through the link below:

KORAB RESOURCES LIMITED KORAB HOUSE www.korab.com.au

20 PROWSE STREET, WEST PERTH, WA, 6005, AUSTRALIA

PO BOX 1958, WEST PERTH, WA, 6872, AUSTRALIA TEL (08) 9474 6166 FAX (08) 9322 6333 ACN 082 140 252 PAGE 12

Issued Capital

Shares: 213 mln Options: 4 mln

Last Price: 2.2 cents

ASX: KOR BERLIN: C6S.BE

Projects

Winchester (NT) Magnesium carbonate

(MgCO3)

Geolsec (NT) Phosphate rock

(P2O5)

Batchelor (NT) Au, Ag, Zn, Pb, Ni, Cu, Co

Mt. Elephant (WA) Au, Cu

Bobrikovo (UKR) Au, Ag, Pb

Figure 8 Bauer vertical mining equipment with 2.4m bucket

Figure 9 Production field cross-section showing auriferous "pipes" at Sundance gold mine

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l use

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Page 13: QUARTERLY ACTIVITIES REPORT TO 30 SEPTEMBER … · QUARTERLY ACTIVITIES REPORT TO ... Mt. Elephant (WA) Au, Cu ... Full text of the report can be accessed through the link below:

KORAB RESOURCES LIMITED KORAB HOUSE www.korab.com.au

20 PROWSE STREET, WEST PERTH, WA, 6005, AUSTRALIA

PO BOX 1958, WEST PERTH, WA, 6872, AUSTRALIA TEL (08) 9474 6166 FAX (08) 9322 6333 ACN 082 140 252 PAGE 13

Issued Capital

Shares: 213 mln Options: 4 mln

Last Price: 2.2 cents

ASX: KOR BERLIN: C6S.BE

Projects

Winchester (NT) Magnesium carbonate

(MgCO3)

Geolsec (NT) Phosphate rock

(P2O5)

Batchelor (NT) Au, Ag, Zn, Pb, Ni, Cu, Co

Mt. Elephant (WA) Au, Cu

Bobrikovo (UKR) Au, Ag, Pb

Figure 10 Production field surface plan showing spacing and size of shafts drilled by vertical miner

Figure 11 Proximity of Sundance gold mine to Union Reefs mill

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