Korab gives update on Bobrikovo Gold Project, Ukraine August 26, 2009

Korab Resources’ (ASX: KOR) subsidiary Lugansk Gold Ltd provides the following update regarding the Bobrikovo gold project in Ukraine and the revisions to the definitive feasibility study for the production of gold from the oxide ores from surface to 35m depth.

The results of the revised study indicate a very profitable, robust project with low start-up and operating costs and high profit margin. Korab is targeting 15,300 ounces for a pre-tax profit of US$4.7 million for 2011-2012. The estimated operating costs including mining, processing and overheads are US$280/oz. The anticipated capital costs of the project are in the range from US$2.2 million to US$2.8 million.

Korab’s equity in the Bobrikovo project is being held through Korab’s subsidiary, Lugansk Gold Ltd which is an Australian public company. Among the funding options that are being evaluated the main two are the project debt financing and spinning-off of Lugansk Gold Ltd. Lugansk would then undertake an IPO to raise t he necessary funding and would seek a dual listing on ASX in Australia and on AIM in London. In the event that Korab were to proceed with the spin-off option, Korab shareholders would receive free shares in Lugansk Gold Ltd by way of an in specie distribution . Korab holds 100 million shares in Lugansk Gold Ltd.

Click here to view the full announcement.

For further information, please contact:

Andrej K Karpinski, Executive Chairman
Australia: (08) 9474 6166
International: +61 8 9474 6166