Fortbridge Media Release

Korab Resources Ltd [ASX:KOR] - Korab completes 1MT/y feasibility study for Winchester

Korab Resources Ltd (�Korab�, or �Company�) (ASX: KOR) is pleased to provide the results of the pre-feasibility study to develop Winchester magnesite deposit as a direct shipping ore (DSO) operation.
Deposit 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. For location of the project please see Figure 1. 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.
Korab has been in discussions with unrelated parties regarding the funding for the development of this project. The Company will now proactively pursue these discussions with interested parties.
CAPITAL COST ESTIMATES
Capital costs of the Winchester project have been estimated at approximately $4 million (including 30% contingency). Results of the study show that main components of capital expenditure are not sensitive to output capacity. Capital cost has been estimated for the development of open pit operations with required access roads, diversion channels, waste and water management and site infrastructure etc. Two variants were evaluated, bench-bench and staged development. The study was based on a mine that could operate at various capacity levels, 250,000T/y ROM capacity, 500,000T/y ROM capacity and 1,000,000T/y ROM capacity.
Under the staged development variant the capital costs will be slightly reduced but the operating costs will not change. However, the difference in capital costs estimates between the two development variants (bench-by-bench versus staged development) is negligible and can be disregarded for the purposes of this study.
OPERATING COST ESTIMATES
Operating cost at 1,000,000T/y ROM output capacity (800,000T/y of saleable rock) is estimated at $21/T of saleable coarse magnesite (including 30% contingency).
The Company also undertook high level assessment of alternative method relying on continuous surface miners and ancillary equipment for moving the in-situ crushed ore and for direct loading onto trucks. Preliminary assessment of the alternative method suggests that the use of continuous miners with either an integrated loading system, or a wheel loader and conveyor would yield 20%-30% operating cost savings compared to the shovel and truck method.
MINING PLAN
Results of the study show that average waste rock to ore ratio for the entire mining operation is 0.5 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 1 to 1, while towards the end of mine-life the ratio would be less than 0.2 to 1. The average ratio of all waste (overburden plus waste rock) to ore for the entire mining operation was 0.6 to 1 T/T.
MINERAL RESOURCES ESTIMATES FOR WINCHESTER MAGNESITE DEPOSIT
Current estimated indicated mineral resources at Winchester underpinning this pre-feasibility study are 12.2 million tonnes grading average of 43.1% MgO.
CONTACT:
Andrej K Karpinski, Executive Chairman - Australia: (08) 9474 6166, International: +61 8 9474 6166