Fortbridge Media Release

Korab Resources Ltd [KOR] - Winchester offtake, financing and operational support

Korab Resources Ltd (�Korab�, or �Company�) (ASX: KOR) and its wholly owned subsidiary AusMag Pty Ltd (�AusMag�) are excited to announce that AusMag has executed a binding agreement with a well-known, respected unrelated entity (�Partner�) for an offtake and marketing rights to 25% of the magnesite to be produced from the Winchester magnesite mine for a period of 7 years.
Under the agreement the Partner and its group will also provide operational, technical, managerial and transactional support to Korab and AusMag in relation to Winchester magnesite project.
The Partner will also offer to AusMag funding for the development of Winchester magnesite mine by way of a loan facility on commercial terms and subject to a due diligence to be completed within 60 days from today.
On 13 January 2015 Korab provided to the market the results of the pre-feasibility study to develop Winchester magnesite deposit as a direct shipping ore (DSO) operation. Results released on 13 January 2015 have shown a low CAPEX of AU$4 million and a long-life mining operation with the capacity to supply 800,000 tonnes of crushed direct shipping magnesite rock per year at a cost of AU$$21 per tonne. This 800,000 tonnes per year capacity is based on single day shift operation and can be easily expanded should this be required. Current magnesite prices range between US$80 and US$140 per tonne. Winchester mine is designed to supply a raw magnesite rock crushed on site with no additional processing.
Winchester is located approximately 85km south of Darwin in the Northern Territory, less than a hundred meters from sealed road, and less than 5km from railway line. The deposit is a shallow, flat laying body covered by up to 5 meters of soil overburden. It can be mined at a low cost by open cut method.
The study is now being expanded to quantify the additional material factors including estimated selling prices for magnesite, foreign exchange rates, and various additional costs; including costs of haulage, port loading, marketing, royalties, and others.
The inclusion of quantified material factors will allow for the estimation of free cashflow from the mine operations and the estimation of its net present value.