Korab Resources : Winchester magnesium scoping study

Issued CapitalonlyIssued Shares: 367 Mln

Last Price: 4.5 cents

Capitalisation: $17 Mln

Listing Codes

ASX: KOR

BERLIN: C6S

useDirectors

Andrej K. Karpinski

Executive Chairman

Executive Director

Rodney H. Skeet personalNon-executiveDirector (Independent)

Anthony G. Wills

Non-executive Director (Independent)

Projects

Winchester (Rum Jungle, NT)

Magnesium

Sundance (Rum Jungle, NT)

Gold, Silver, Tin

Batchelor & G. Alligator

(Rum Jungle, NT)

Gold, Silver, Zinc, Lead, Nickel,

Copper, Cobalt, Tin, Scandium,

For

Lithium, Manganese, Uranium

Geolsec (Rum Jungle, NT)

Phosphate Rare Earth Elements Uranium (Sub-leased to third party)

Mt. Elephant (Ashburton, WA)

Gold, Copper

Bobrikovo (Luhansk, UKRAINE)

Gold, Silver, Zinc, Lead, Antimony

KORAB RESOURCES LIMITED

KORAB HOUSE

www.korab.com.au

09 March 2022

WINCHESTER MAGNESIUM SCOPING STUDY

CAUTIONARY STATEMENTS: WINCHESTER MAGNESIUM METAL SCOPING STUDY

The Scoping Study referred to in this ASX report has been undertaken for the purpose of initial evaluation of a potential development of the Winchester Magnesium Project as a producer of magnesium metal. The Scoping Study is a preliminary technical and economic study of the potential viability of the Winchester Magnesium Project as magnesium producer. The Scoping Study outcomes, production target, and forecast financial information referred to in this release are based on low level technical and economic assessments that are insufficient to support estimation of Ore Reserves. The Scoping Study is presented in Australian dollars to an accuracy level of +/- 30%. While each of the JORC modifying factors was considered and applied, there is no certainty of eventual conversion to Ore Reserves or that the production target itself will be realised. Further exploration and evaluation work and appropriate studies are required before Korab Group will be in a position to estimate any Ore Reserves or to provide any assurance of an economic development case. The production target stated in this announcement is based on Korab Group's current expectations of future results or events and should not be relied upon by investors when making investment decisions. Further evaluation work and studies are required to establish sufficient confidence that the production target will be met. Accordingly, given the uncertainties involved, investors should not make any investment decisions based solely on the results of the Scoping Study. Given that the results of the Scoping Study are subject to the qualifications above (including assumptions as to accuracy) any results reported in this release should be considered as approximates and subject to variances having regard for the assumptions referred to in this release. Of the Mineral Resources scheduled for extraction in the Scoping Study only Indicated resource was used. Korab Group confirms that the financial viability of the Winchester Magnesium Project is not dependent on the inclusion of Inferred Resources in the Scoping Study. The Mineral Resources underpinning the production target in Scoping Study was prepared by a competent person in accordance with the requirements of the JORC Code (2004) and was most recently reported to the market in the Annual Report of Korab Group for the year ended 30 June 2021. Korab confirms that it is not aware of any new information or data that materially affects the information included in that report and that all material assumptions and technical parameters underpinning the estimate continue to apply and have not been changed. To achieve the potential mine development outcomes indicated in the Scoping Study, funding in the order of AU$409-AU$422 million will likely be required. Investors should note that there is no certainty that the Company will be able to raise funding when needed, however the Company has concluded it has a reasonable basis for providing the forward looking statements included in this announcement and believes that it has a "reasonable basis" to expect it will be able to fund the development of the Project. It is also possible that such funding may only be available on terms which are dilutive to, or otherwise affect the value of, Korab's existing shares. It is also possible that Korab's could pursue other 'value realisation' strategies such as sale, partial sale, or joint venture of the Project. If it does, this could materially reduce Korab's proportionate ownership of the Project. Korab has concluded that it has a reasonable basis for providing these forward-looking statements and the forecast financial information included in this release. This includes a reasonable basis to expect that it will be able to fund the development of the Winchester Magnesium Project upon successful delivery of key development milestones as and when required. While Korab considers all of the material assumptions to be based on reasonable grounds, there is no certainty that they will prove to be correct or that the range of outcomes indicated by the Scoping Study will be achieved. All financials are provided in Australian dollars unless stated otherwise.

20 PROWSE STREET, WEST PERTH, WA, 6005, AUSTRALIA PO BOX 1958, WEST PERTH, WA, 6872, AUSTRALIA

TEL [phone]	FAX [phone]
ACN 082 140 252	PAGE 1

Issued CapitalonlyIssued Shares: 367 Mln

Last Price: 4.5 cents

Capitalisation: $17 Mln

Listing Codes

ASX: KOR

BERLIN: C6S

useDirectors

Andrej K. Karpinski

Executive Chairman

Executive Director

Rodney H. Skeet personalNon-executiveDirector (Independent)

Anthony G. Wills

Non-executive Director (Independent)

Projects

Winchester (Rum Jungle, NT)

Magnesium

Sundance (Rum Jungle, NT)

Gold, Silver, Tin

Batchelor & G. Alligator

(Rum Jungle, NT)

Gold, Silver, Zinc, Lead, Nickel,

Copper, Cobalt, Tin, Scandium,

For

Lithium, Manganese, Uranium

Geolsec (Rum Jungle, NT)

Phosphate Rare Earth Elements Uranium (Sub-leased to third party)

Mt. Elephant (Ashburton, WA)

Gold, Copper

Bobrikovo (Luhansk, UKRAINE)

Gold, Silver, Zinc, Lead, Antimony

KORAB RESOURCES LIMITED

KORAB HOUSE

www.korab.com.au

Korab Resources Ltd ("Korab", or "Company") (ASX: KOR) and its subsidiaries ("Korab Group") are pleased to report the results of the scoping study assessing the economics of a tested and proven magnesium production method relying on electric arc furnace using as feedstock magnesium oxide, aluminium, and ferrosilicon to produce magnesium metal (the Scoping Study).

SUMMARY

The following parameters were used for the Scoping Study:

Magnesium metal annual production rate:	50,000 tonnes per year.
MgO feed to processing:	310,000 tonnes per year.
Magnesite annual feed to plant:	642,000 tonnes per year.
Annual magnesite mining rate:	864,000 tonnes per year.
Magnesium production method:	Owned and operated electric arc furnace working
	under inert gas conditions, using as feedstock
	magnesium oxide, ferrosilicon, and aluminium scrap.
Electric power source:	From grid.
Calcination method:	Owned and operated gas-fired rotary kiln using natural
	gas as firing gas.
Gas source:	From pipeline, or on-site storage.
Accuracy of estimates:	30%
Mineral resource used:	Indicated mineral resource of 12.2 million tonnes
	grading 43.1% MgO at a 40% MgO cut-off.
Mining method:	Open pit, drill-and-blast,shovel-and-truck method,
	contract operated.
Input costs used:	Prices for gas, electricity, ferrosilicon, aluminium scrap,
	fuel, labour, consumables, maintenance costs, parts,
	equipment, plant, and components obtained from
	suppliers, contractors, and traders.
Exchange rate used:	US$0.80/AU$1.00
Magnesium selling price:	AU$10,000 per tonne

The Scoping Study estimated the capital cost of the Project at between AU$409 million and AU$422 million. This capital cost estimate includes direct costs estimate of between AU$330 million and AU$340 million, indirect cost estimate of between AU$46 million and AU$48 million, and a contingency of 10% of estimated direct costs. Direct cost estimate includes the cost of mine, site, hydrology, processing plant, and gas scrubbing and waste management. Indirect costs include E.P.C.M. costs, temporary facilities costs, and Australian transport costs. Please see Table 4 and Table 5 for the components of the capital costs by category.

The production cost of the magnesium metal has been estimated at between AU$5,300 per tonne and AU$5,400 per tonne. Production cost estimate includes contingency of 10%. Production costs estimates include ongoing maintenance costs and consumables. Please see Table 6, Table 7, and Table 8 for the components of the overall production costs by activity type, category, and inputs.

Annual revenue has been estimated at around AU$500 million at magnesium metal price of approximately AU$10,000 and the production level of 50,000 tonnes per year. Annual gross profit margin has been estimated at between AU$230 million and AU$235 million.

20 PROWSE STREET, WEST PERTH, WA, 6005, AUSTRALIA PO BOX 1958, WEST PERTH, WA, 6872, AUSTRALIA

TEL [phone]	FAX [phone]
ACN 082 140 252	PAGE 2

Issued CapitalonlyIssued Shares: 367 Mln

Last Price: 4.5 cents

Capitalisation: $17 Mln

Listing Codes

ASX: KOR

BERLIN: C6S

useDirectors

Andrej K. Karpinski

Executive Chairman

Executive Director

Rodney H. Skeet personalNon-executiveDirector (Independent)

Anthony G. Wills

Non-executive Director (Independent)

Projects

Winchester (Rum Jungle, NT)

Magnesium

Sundance (Rum Jungle, NT)

Gold, Silver, Tin

Batchelor & G. Alligator

(Rum Jungle, NT)

Gold, Silver, Zinc, Lead, Nickel,

Copper, Cobalt, Tin, Scandium,

For

Lithium, Manganese, Uranium

Geolsec (Rum Jungle, NT)

Phosphate Rare Earth Elements Uranium (Sub-leased to third party)

Mt. Elephant (Ashburton, WA)

Gold, Copper

Bobrikovo (Luhansk, UKRAINE)

Gold, Silver, Zinc, Lead, Antimony

KORAB RESOURCES LIMITED

KORAB HOUSE

www.korab.com.au

ECONOMIC ANALYSIS

Project design, modelling, capital cost and operating cost estimations, and various contributions were provided by multiple consultants including Golder Associates, Bateman Tenova, Krupp Polysius, Svedala, and Metso.

Input values for capital costs, and operating costs models/estimations were obtained from quotes and prices sourced from multiple suppliers, vendors, contractors, and industry bodies.

Recent average price of magnesium metal based on the prevailing prices over the last 6 months, (from 1 September 2021 to 28 February 2022) was used for revenue estimates. The highest magnesium price during this period was AU$15,127 per tonne and the lowest magnesium price during this period was AU$6,453 per tonne.

Recent average prices of ferrosilicon (AU$1,625 per tonne), aluminium scrap (AU$808 per tonne), gas ($236 per tonne), and electricity (AU$0.23 per KWh) were used as inputs to estimate the production costs.

The study covered a period of 14 years with the production schedule of approximately 865,000 tonnes of rock per year to be mined and used to provide approximately 640,000 tonnes per year of feedstock for calcination into magnesium oxide.

Production schedule relied solely on the 12.2 million tonnes of the mineral resource classified as the indicated mineral resource category.

MINING PLAN

Results of the study show that average waste rock to ore ratio for the entire mining operation is approximately 0.45 to 1 T/T, though the actual ratio will fluctuate over the life of the Project. Initially, the waste rock to ore ratio would be about 0.85 to 1, while towards the end of mine-life the ratio would be less than 0.2. The average ratio of all waste (overburden plus waste rock) to ore for the entire mining operation was approximately 0.55 to 1 T/T.

The design criteria for the open pit used in this study are summarised in the following table.

Table 1 Open pit design criteria

Bench Height (m)	5
Distance between berms (m)	20
Berm Width (m)	5
Road Width (m)	20
Maximum Road Gradient (%)	12.5

The slope design parameters used in this study are summarised in the following table.

Table 2 Open pit slope design parameters

Unit	Face Angle	Face Height
Overburden	40°	Irregular
Undisturbed rock	70°	20 m

A thin layer (up to 5m) of unconsolidated soil and unconsolidated alluvium overlies the massive magnesite at the Winchester deposit. This overburden would require progressive removal to expose the hard, consolidated magnesite. It is expected that the unconsolidated, overburden could be removed by tractor scraper.

Under shovel and drill/blast option, conventional open pit mining methods using rubber-tyred trucks and either a hydraulic excavator or rubber-tyred, front end loader were proposed for excavation of the

20 PROWSE STREET, WEST PERTH, WA, 6005, AUSTRALIA PO BOX 1958, WEST PERTH, WA, 6872, AUSTRALIA

TEL [phone]	FAX [phone]
ACN 082 140 252	PAGE 3

Issued CapitalonlyIssued Shares: 367 Mln

Last Price: 4.5 cents

Capitalisation: $17 Mln

Listing Codes

ASX: KOR

BERLIN: C6S

useDirectors

Andrej K. Karpinski

Executive Chairman

Executive Director

Rodney H. Skeet personalNon-executiveDirector (Independent)

Anthony G. Wills

Non-executive Director (Independent)

Projects

Winchester (Rum Jungle, NT)

Magnesium

Sundance (Rum Jungle, NT)

Gold, Silver, Tin

Batchelor & G. Alligator

(Rum Jungle, NT)

Gold, Silver, Zinc, Lead, Nickel,

Copper, Cobalt, Tin, Scandium,

For

Lithium, Manganese, Uranium

Geolsec (Rum Jungle, NT)

Phosphate Rare Earth Elements Uranium (Sub-leased to third party)

Mt. Elephant (Ashburton, WA)

Gold, Copper

Bobrikovo (Luhansk, UKRAINE)

Gold, Silver, Zinc, Lead, Antimony

KORAB RESOURCES LIMITED

KORAB HOUSE

www.korab.com.au

open pit materials. Please refer to Figure 12 and Figure 13 for the photos of test mining at Winchester Magnesium Project.

Under the shovel and drill/blast option, magnesite would require blasting prior to excavation and mine benches are expected to be suitable for running rubber tyred mining equipment with minimal preparation. Study indicates that optimum variant is for the mining operations to be initially carried out on a yearly campaign basis by employing a specialist mining contractor. Study shows that campaign mining can be utilised as the preferred mode of operation up to approximately 1,000,000 ROM output. If the volumes increase beyond this level, it is expected that the Project could move to year round operation.

MINERAL RESOURCES ESTIMATES FOR WINCHESTER MAGNESITE DEPOSIT

Current estimated mineral resource at Winchester is shown in the following table. The study relied solely on the mineral resource in the indicated category.

Table 3 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 2021.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.

PRODUCTION SCHEDULE

The Company used the following annual production schedule in this study (over 14 years).

900
800
700
600
500
400
300
200
100
0
1	2	3		4	5			6	7	8		9	10			11	12	13	14
									Annual Feed to Process Tonnage ('000 tonnes)
									Annual Feed to Plant Tonnage ('000 tonnes)
									ROM Tonnage ('000 tonnes)
20 PROWSE STREET, WEST PERTH, WA, 6005, AUSTRALIA
PO BOX 1958, WEST PERTH, WA, 6872, AUSTRALIA
TEL [phone]		FAX [phone]
ACN 082 140 252																											PAGE 4

Issued CapitalonlyIssued Shares: 367 Mln

Last Price: 4.5 cents

Capitalisation: $17 Mln

Listing Codes

ASX: KOR

BERLIN: C6S

useDirectors

Andrej K. Karpinski

Executive Chairman

Executive Director

Rodney H. Skeet personalNon-executiveDirector (Independent)

Anthony G. Wills

Non-executive Director (Independent)

Projects

Winchester (Rum Jungle, NT)

Magnesium

Sundance (Rum Jungle, NT)

Gold, Silver, Tin

Batchelor & G. Alligator

(Rum Jungle, NT)

Gold, Silver, Zinc, Lead, Nickel,

Copper, Cobalt, Tin, Scandium,

For

Lithium, Manganese, Uranium

Geolsec (Rum Jungle, NT)

Phosphate Rare Earth Elements Uranium (Sub-leased to third party)

Mt. Elephant (Ashburton, WA)

Gold, Copper

Bobrikovo (Luhansk, UKRAINE)

Gold, Silver, Zinc, Lead, Antimony

KORAB RESOURCES LIMITED

KORAB HOUSE

www.korab.com.au

This production schedule is based solely on indicated mineral resources. For mineral resources estimate which includes both indicated and inferred mineral resources please refer to Table 3 and

Table 9.

Investors should note that the actual production schedule will depend on the availability of funding for the Project, finalised magnesium metal sales and/or offtakes, governmental and regulatory project approvals, access to transport, and other factors such as magnesium prices, energy prices, foreign exchange rates, etc. which are outside the control of the Company.

PRODUCTION PROFILE

The study demonstrated that the mining and processing schedule will results in the production of 50,000 tonnes of the magnesium metal per year for 14 years of Project's life using solely the mineral resource classified as indicated.

PROCESS DESIGN

The plant is designed to produce high purity Mg metal from Magnesium Carbonate (MgC03) mined at Winchester. The run of mine material is crushed and screened prior to calcination in a gas fired, refractory lined, rotary kiln. The calcination process produces dead burnt magnesia (MgO). This is combined with ferrosilicon (FeSi) and aluminium scarp and fed to a DC Arc Furnace where the MgO is reduced to magnesium (Mg) metal which vaporises off the melt at the furnace temperature. The ratios of the reagents are adjusted to produce a slag with suitable disposal characteristics, liquidus temperature, and optimal Mg metal extraction whilst the furnace is operated at atmospheric pressure.

Mg vapour flows to a purpose designed condenser vessel where it is condensed by cooling to Mg liquid. Crude Mg metal is tapped periodically from the condenser and transported to the adjacent refining furnace where impurities are removed by the addition of fluxing agents, and the purified Mg metal is cast into ingots on a casting machine.

Processing plant layout and process flow chart for each of the main components of the processing plant are shown in the following diagrams.

Figure 1 Magnesium Processing Plant layout

20 PROWSE STREET, WEST PERTH, WA, 6005, AUSTRALIA PO BOX 1958, WEST PERTH, WA, 6872, AUSTRALIA

TEL [phone]	FAX [phone]
ACN 082 140 252	PAGE 5