response to asx query

Kimberley Brown
Senior Advisor
Listings – Sydney

Dear Kimberley,

Please find following Carabella Resources’ response to your letter dated 17/10/2011.

Carabella Resources ("Carabella" or "the Company") notes the article on p.20 of today's Australian Financial Review which refers to the Company having established a data room.

Carabella can confirm that since listing in late 2010 it has received several unsolicited expressions of interest in the Grosvenor West coking coal project. Consequently, a data room has been set up to allow a select group of interested parties to access information under customary confidentiality arrangements.

Due diligence investigations have commenced only recently. At this stage, it is not certain what form of transaction will be proposed to the Company and it is also uncertain whether an acceptable transaction proposal will be provided by the interested parties.

Carabella can confirm it is in compliance with the listing rules and, in particular, listing rule 3.1.


Regards