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Market:	ASX
Sector:	General Mining
EPIC:	KOR
Latest Price:	0.15 (-3.33% )
52-week High:	0.40
52-week Low:	0.14
Market Cap:	12.76M

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Korab Resources

Korab Resources (ASX: KOR) operates organic phosphate rock and magnesium projects in Australia. Korab also holds shares in two gold mining companies Melrose Gold Mines and Lugansk Gold.

Korab Resources cuts phosphate project costs, improves project returns

Tuesday, October 27, 2009

Korab Resources Ltd (ASX: KOR) has lowered the estimated start-up costs of its GeolSec phosphate project in the Northern Territory from the range of $300,000-$500,000 to the range of $200,000-$300,000.

Also, GeolSec’s estimated working capital requirements have been reduced from the range of $500,000-$800,000 to the range of $300,000-$500,000.

This brings the total savings in combined start-up and working capital requirements to around $500,000.

Korab has recently completed a $2 million Share Purchase Plan (SPP) which closed oversubscribed after 16 days.

Part of the funds raised under the SPP will be used to cover the start-up costs and the working capital requirements of the GeolSec project, making it fully-funded to production.

Korab’s application for a mining lease covering GeolSec phosphate deposit has progressed through the objection period with no objections received.

Because of the deposit’s location, its structure and its characteristics, the development of the GeolSec deposit should have a negligible environmental impact, said executive chairman Andrej K. Karpinksi.

“Furthermore, through the development of the GeolSec deposit as a preferred supplier of environmentally friendly organic products that can be substituted for soluble fertilisers, Korab can contribute to solving soil salinity and water pollution problems,” he said.

Korab’s GeolSec rock phosphate deposit is located 65 km south of Darwin on the outskirts of the regional centre of Batchelor. Korab is intending to develop the deposit as a simple quarrying operation capable of supplying pastoralists, organic farmers and other users of phosphate based organic fertilisers.

The deposit is located around 1 km from the grinding mill and is accessible during both dry and wet seasons. Local infrastructure includes a sealed highway, railway line, gas pipeline, high voltage power and potable water.

GeolSec is slated to commence production in 2010 with a targeted first year output of 15,000 tons p.a. to generate a projected pre-tax gross profit of around $5 million. GeolSec will be targeting a second year profit of $9 million, and a third year profit of $12 million.

This represents a targeted pre-tax profit of $26 million over three years commencing in 2010.

At this level it would generate a revenue stream for Korab, with gross profit of 33 cents per share over three years.

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