Korab Resources Limited results of the scoping study assessing the economics of a tested and proven magnesium production method relying on electric arc furnace using as feedstock magnesium oxide, aluminium, and ferrosilicon to produce magnesium metal (the Scoping Study). The Scoping Study estimated the capital cost of the Project at between AUD 409 million and AUD 422 million. This capital cost estimate includes direct costs estimate of between AUD 330 million and AUD 340 million, indirect cost estimate of between AUD 46 million and AUD 48 million, and a contingency of 10% of estimated direct costs.

Direct cost estimate includes the cost of mine, site, hydrology, processing plant, and gas scrubbing and waste management. Indirect costs include E.P.C.M. costs, temporary facilities costs, and Australian transport costs. The production cost of the magnesium metal has been estimated at between AUD 5,300 per tonne and AUD 5,400 per tonne.

Production cost estimate includes contingency of 10%. Production costs estimates include ongoing maintenance costs and consumables. Annual revenue has been estimated at around AUD 500 million at magnesium metal price of approximately AUD 10,000 and the production level of 50,000 tonnes per year.

Annual gross profit margin has been estimated at between AUD 230 million and AUD 235 million.