Hello ValueFirst,It is quite easy to miss the new research...

Hello ValueFirst,

It is quite easy to miss the new research report because KOR sometime forgets to make an ASX announcement. Hopefully they will improve their Public relation/marketing to share holder and public. By the way, KOR has just made an ASX announcement on the 2nd research report (ie RCR) this morning.


RCR valuation at 33c per share based on the gold price at US$850/oz and for GeolSec Phosphate project in NT, Australia and Bobrikovo gold project in Ukraine, Melrose Gold project in WA, Australia and Winchester Magnesium Project in NT, Australia.

With gold price at record high recently, Melrose project will bring a modest profit to Korab.

Melrose project used to be the prime project that could quickly bring in profit and cash-flow when KOR was listed in August 2005. In 2006, most effort and focus was on Melrose project.

The Melrose gold resources of 306,000 ounces have been delineated in three deposits in close proximity to each other (within 5km)

• The Boundary Deposit contains 4.61 million tonnes at 1.37g/t gold (202,000 ounces)

• The Bungarra Deposit has an estimated 1.66 million tonnes at 1.64g/t gold (87,000 ounces)

• The Stirling Deposit contains 0.4 million tonnes at 1.31g/t gold (17,000 ounces).

The current combined resource for the Melrose Project is 6.67 million tonnes at 1.43g/t gold containing 306,000 ounces

The 2006 scoping study has also been done and the plan at that time was to toll- treat the Bungarra deposit, high grade resource/ore at the nearby Bronzewing gold plant of View resources (View resources went into administration and NAV [Navigator Resources Ltd] has acquired the View assets including the Bronzewing plant on 1st October 2009). The low grade resource/ore of Melrose will be heap leached at local site. During the review of development options for Melrose that was conducted, Korab used a gold price of AU$520 an ounce to assess the viability of Bungarra development. It seems that any gold price above A$520/oz is profitable. At that time the gold price was trading in the range of A$620/oz to 670 /oz. For further details, refer to the ASX 31 Jan 2006 announcement.

http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=00585808

I expect NAV and KOR will have some discussions on the toll treatment once NAV has re-commissioned the Plant.

http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=00994314

A number possibility apart from toll treatment could take place such as joint-venture between KOR & NAV for the Melrose project; outright sale of Melrose project to NAV; Script take over by NAV, etc.

In September 2005, Strachan Corporate has been Commissioned to assess the potential tonnages, grades, costs and cash flows calculated using industry benchmark costing for mining, transport and processing.

Strachan Corporate’s model indicates that a gold head grade of 1.65g/t would be required for the project to break even. According to the report, this benchmarking work indicates the potential to produce about 49,700 oz of gold over a 4-5 month operating period at a cash cost of approximately A$422/oz, generating an operating cash flow of $7m at a gold price of A$578/oz.

Its calculations are based on 700,000 tonnes of ore grading 2.4g/t at a 4:1 waste to ore ratio.
Strachan Corporate model’s results are broadly in line with the results of modelling performed by
Korab Resources. For further details, refer to the ASX announcement 14 Oct 2005.

http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=00557245



As always, DYOR.