Korab Resources to Sell Winchester Magnesite Deposit

2012-12-31

Dec. 31, 2012 - Korab Resources has inked a deal to sell the Winchester magnesite deposit in Northern Territory to Augur Investments for $33.2 million in cash and royalties.
Korab's sale price assigns $2 per tonne of JORC code compliant magnesite resource, while the current resource base consists of an indicated resource o 12.2 million tonnes at 43.1% MgO and inferred resource of 4.4 million tonnes at 43.6% MgO.
Half the consideration at $16.6 million will be payable on completion of the sale while an additional $16.6 million will be payable as a royalty on each tonne of magnesite mined from the deposit.
The agreement hinges on certain conditions being fulfilled by 31 March 2013 including Korab obtaining all the regulatory approvals for the sale of the asset and upon satisfactory due diligence by Augur.
The Winchester magnesite deposit is located within the Batchelor project in the Northern Territory, with ready access to infrastructure and logistics such as rail, gas and electricity.
Prior drilling at Batchelor to a depth of 100 metres outlined a high grade zone of magnesium mineralisation 7.5 kilometres long and 500 metres wide, with mineralisation open at depth.
Close spaced drilling over the area 550 metre by 300 metres, which covers less than 5% of the mineralised zone, outlined an indicated resource of 12.2 million tonnes at 43.1% MgO and an inferred resource of 4.4 million tonnes at 43.6% MgO.