core sector communique

Korab Resource Limited [KOR] - Melrose Gold Mines IPO Priority Record Date

Melrose Gold Mines Limited (MGH) has lodged its IPO prospectus which can be downloaded from MGH website. A link to MGH website is located on the home page of Korab website at www.korabresources.com.au
MGH holds large number of gold projects at various stages of development and exploration located in Western Australia and the Northern Territory. The most advanced of these is the Melrose project which has gone through the scoping study stage and where MGH plans to complete definitive feasibility study within 12 months from listing on ASX. Other advanced projects are Wonganoo and Darlot East prospects where previous drilling has discovered gold mineralisation.
Korab is pleased to advise that Korab shareholders wishing to apply for MGH shares to be issued under the IPO prospectus will have priority ahead of other applicants. The priority IPO ratio has been determined as greater of $2,000 worth of MGH shares, or 1 MGH IPO share for each 6 Korab shares. Korab has approximately 1,460 shareholders, including 1,300 shareholders who hold fewer than 60,000 Korab shares each. These shareholders will be entitled to apply for 10,000 MGH IPO shares each (or $2,000 worth of MGH shares per shareholder). The Record Date for the determining Priority Entitlement of Korab shareholders has been set as 6 May 2011.
MGH has received approvals for drilling programs at the Melrose and Wonganoo gold projects in Western Australia. Melrose program will consist of diamond to be drilled within Boundary, Bungarra and Hurleys deposits which contain JORC code mineral resource of 340,00 ounces in measured, indicated and inferred categories. Wonganoo program will consist of RC holes within Freemans and Eclipse gold prospects where gold mineralisation has been previously discovered by shallow drilling. Previous drilling at Freemans has discovered gold mineralisation over wide intercepts grading between 10 and 233 g/t x meters Au, including 2 holes grading between 40 and 233 g/t Au x meters, 4 holes grading between 20 and 40 g/t Au x meters and 13 holes grading between 10 and 20 g/t Au x meters. For details and location please see diagram on page 5. MGH will also drill test using RC drilling gold anomaly discovered by previous sampling and shallow drilling at Darlot East located just 3 km east of the Darlot Centenary gold mine.
Melrose gold project is located in the Eastern Goldfields of Western Australia and contains a JORC code compliant resource of approximately 340,000 ounces of gold in measured, indicated and inferred categories.
At Wonganoo project (adjoining the Melrose project) a wide zone of soil gold anomalism has been drilled to assess potential for additional resource in proximity to the Melrose gold deposits. This drilling program has discovered high grade gold mineralisation at Freemans which is extending over 1.5 km strike length with similar tenor to the nearby Bronzewing gold mine. Following the closing of its IPO prospectus, MGH will commence reverse circulation (RC) drilling program to test this target (and the nearby Eclipse target) at depth. The Wonganoo RC drilling program is to be run in conjunction with the diamond drilling program at the nearby Melrose project and will commence either just prior to the listing of MGH on ASX or immediately after.
Following the closing of MGH’s IPO prospectus, MGH and Korab intend to commence Mobile Metal Ion (MMI) sampling program at the Ashburton Downs copper/gold project where MGH owns 100% rights to gold. Ashburton Downs project where Korab and MGH have a joint venture, is located in the Pilbara in Western Australia and has potential for hydrothermal gold and copper mineralisation associated with four large-scale alterations suggesting widespread hydrothermal activity. For details please se diagram on page 6. These alterations extend over a distance of 27 km. The largest of the anomalies has a surface expression of 10 km long by up to 3 km wide and is associated with a major structure. Past exploration has been limited to evaluation of the small area located in the vicinity of multiple outcropping gossans. Similarly to the Melrose project drilling program, all necessary equipment and personnel required for this MMI sampling program are currently on stand-by and the program will com mence either just prior to the listing of MGH on ASX or immediately after.
Another gold exploration project is Darlot East project located near Leinster in the Eastern Goldfields. The project is located just 3 km east of the Darlot and Centenary gold mines. At the Darlot East project independent consultants have identified exploration targets for structurally controlled deposits that formed synchronously with the 3 million ounce Darlot gold deposit. Previous work which included first-pass drilling, rock-chip and soil sampling has confirmed a wide zone of gold anomalism.
Other MGH exploration projects are located at Rum Jungle within the Pine Creek orogen in the Northern Territory. Rum Jungle projects include the Sundance gold mine where shallow oxidised ore was removed for toll treatment in a relatively high grade open-cut operation with a mined grade of 10.7 g/t gold. Primary ore which was intersected in drilling below the open-cut pit comprises massive auriferous pyrite.