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Korab Resources shareholders to receive free shares in two new ASX gold miners


Korab Resources (ASX: KOR), as previously announced to the market, is to spin-off Melrose Gold Mines and Lugansk Gold into new gold companies that will seek listing on the ASX.

Extraordinary general meeting notice and documentation is being finalised and will be despatched to Korab shareholders once all regulatory and ASX approvals have been received.

Lugansk Gold has resumed mining operations at Bobrikovo gold mine in Ukraine. Lugansk Gold is developing the 1 million ounce Bobrikovo gold mine through its 74% owned subsidiary Donetsky Kryazh Ltd (DKL). The remaining 26% interest in DKL is held by Ukrainian investors.

A JORC compliant resource upgrade for Bobrikovo mine has been completed with a resource of over 1 million oz.

The Lugansk Gold indicative IPO issue price has been set at 26-34 cents per share.

Korab shareholders are to receive 1-1.3 free shares in Lugansk Gold.

Melrose Gold Mines has been incorporated as a wholly owned subsidiary of Korab Resources. Melrose Gold Mines will own and operate Melrose and Darlot East projects and will hold rights to gold mineralisation at Batchelor, Green Alligator and Ashburton Downs projects.

The Melrose project has JORC code compliant resource base of 326,000 ounces. A JORC code compliant resource upgrade for the Boundary deposit at Melrose project is nearing completion following the 29% upgrade to the resource at Bungarra deposit (also at Melrose project).

The Melrose Gold Mines indicative IPO issue price has been set at 20-24 cents per share.

Korab shareholders are to receive 1-1.3 free shares in Melrose Gold Mines.

Following the demerger of the gold mining operations, Korab will concentrate on developing its organic phosphate rock (GeolSec) and its magnesium oxide (Winchester) businesses in the Northern Territory.

It will also continue to explore for base metals within its Northern Territory and Western Australian projects.

Andrej Karpinski, Executive Chairman, said the demerger of the gold assets into two independent entities will serve a number of purposes. It will:

- maximise the returns to Korab shareholders;

- allow shareholders to optimise their portfolios by providing them with tradeable equity in the projects;

- allow each project to be evaluated by investors and analysts on its own merits;

- allow the market to more accurately value Korab’s gold and non-gold assets;

- provide CAPEX and working capital required to fast-track development of the gold projects
without diluting shareholders equity in non-gold assets; and

- simplify the company’s structure and its operations.

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