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1 Initial JORC Reserves Estimate for Bluff Project HIGHLIGHTS Initial JORC Reserves Estimate of 11 Mt mineable for Bluff Project In-fill drilling program completed to support further Resources and Reserves delineation Environmental approvals advanced under Qld Government s Green Tape Reduction Process 1. INITIAL RESERVES ESTIMATE Carabella Resources Limited (ASX:CLR) (Carabella or Company) is pleased to announce an initial JORC Reserves Estimate for the Bluff ultra-low volatile PCI Project. The Reserves Estimate has been prepared by MEC Mining in accordance with the JORC 2004 Code (Table 1). Supporting information for the Reserves Estimate is set out in Appendix 1. The Mineable Reserves are on a ROM basis inclusive of dilution and moisture. Table 1: Bluff Reserves Estimate (November 2013) Probable Reserves (Mt) Mineable Marketable In July 2013, Carabella announced a Resources Estimate for the Bluff Project of 21.5Mt comprising Indicated Resources of 11.2Mt and Inferred Resources of 10.3Mt prepared in accordance with the JORC 2004 Code. This Resources Estimate forms the basis for the initial Reserves Estimate. The Indicated Resources component of the Resources Estimate of 11.2Mt includes the reported 11.0Mt of Mineable Reserves. As previously reported, the JORC Resources Estimate for the Bluff Project is set out in Table 2. Table 2: Bluff Resources Estimate (July 2013) Category July 2013 Resources (Mt) 0-150m m 0-300m Indicated Inferred Total Resources In addition to the Resources stated above, a further Exploration Target* in the range 3.4Mt 24Mt has been identified. Carabella Resources Limited P F Level 1, 1 Breakfast Creek Road, Newstead Qld 4006 Locked Bag 7, Fortitude Valley B.C. Qld 4006 ACN

2 *Exploration Target statement: it needs to be emphasised that exploration results are conceptual in nature and that there is insufficient exploration to define a coal resource. Hence it is uncertain if further exploration will convert the majority of the exploration results into a resource. 2. IN-FILL DRILLING PROGRAM A five hole in-fill drilling program has been undertaken (see Fig 1) to enable further resource delineation as well as conversion from Inferred Resources category into Mineable Reserves. The results of the five hole in-fill program are set out in Table 3. Key points to note are as follows: Hole BLU105 intersected a total of 20.4m of coal at shallow depth from 36.6m to 67.8m, at a shallower depth of weathering than previously anticipated. Importantly, this result includes three intersections of Pollux seam totalling 18.7m over a 20.7m interval, commencing at a depth of 47.1m; Hole BLU103 has located the low-wall position in the southern area of the pit; and BLU098 will be coupled with a core hole (to be completed) to provide additional coal washability data. Fig 1: Bluff in-fill drilling locations Page 2 of 6

3 Table 3: Bluff in-fill drilling results Hole Depth (m) Seam Top (m) Thickness (m) BLU Orion Pollux Total 20.4 BLU Pollux Orion Pisces Total 11.8 BLU Pollux (partially weathered) Total 5.5 BLU Pollux Orion Pisces BLU Aries Castor Pollux Orion Pisces Total Total ENVIRONMENTAL AUTHORITY APPLICATION LODGED Carabella lodged an Environmental Authority (EA) application and supporting documentation for the Bluff Project under the Queensland Government s new Green Tape Reduction process in early November The supporting documentation covers all matters required to be addressed under the approvals process including flora and fauna, surface and groundwater, social impact and transport, aquatic and stygofauna, air quality and noise surveys and studies. The Project s EA will now be assessed by the Department of Environment and Heritage Protection under the six stage approvals process including public comment. The Mining Lease application will be processed in parallel with the EA application. Carabella is scheduling Project approvals to be received in Q Page 3 of 6

4 CONTACT: Anthony Quin Kylie Anderson Managing Director Company Secretary Tel: Tel: Web: kylie@anderssonlyne.com COMPETENT PERSONS STATEMENT The information presented in this announcement relating to coal resources and exploration targets is based on information compiled by Mr Mal Blaik of JB Mining Services. The reporting is in compliance with the 2004 JORC Code. Mr Blaik is a qualified Geologist, a member of the Australasian Institute of Mining and Metallurgy and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking, to qualify as a Competent Person as defined in the Australasian Code for Reporting of Mineral Resources and Ore Reserves published by the Joint Ore Reserves Committee (JORC Code). Mr Blaik has given his consent for the inclusion of this information, and has reviewed all statements pertaining to this information in the form and context in which it appears. The information presented in this announcement relating to exploration results is based on information compiled by Mr Bruce Robertson who is a member of the Australian Institute of Mining and Metallurgy and is an employee of the Carabella Resources Limited. Mr Robertson is a qualified mining engineer and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking, to qualify as a Competent Person as defined in the Australasian Code for Reporting of Mineral Resources and Ore Reserves published by the Joint Ore Reserves Committee (JORC Code). Mr Robertson has given his consent for the inclusion of this information, and has reviewed all statements pertaining to this information in the form and context in which it appears. The information in this report that relates to ore reserves is based on information compiled by Edward Boulton, who is a member of the Australasian Institute of Mining and Metallurgy. Edward Boulton is a full time employee of MEC Mining. Edward has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Edward Boulton consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Page 4 of 6

5 Appendix 1: Supporting information for JORC Reserves Estimate Criteria Mineral Resource estimate for conversion to Ore Reserves Commentary The Resource Estimate prepared by Mal Blaik in June 2013 forms the basis for this Ore Reserves Estimate. The geological model that was used to produce the resource estimate is the same model used to estimate the Ore Reserves. The Mineral Resources are inclusive of the Ore Reserves Study status Cut-off parameters The Bluff Feasibility Study is well advanced and is scheduled for completion by end of CY2013. The study is being undertaken by Carabella Resources with the assistance of specialist consultants as required. The study demonstrates that the Project is technically feasible and economically viable. A separate assessment of the deposit was undertaken by MEC Mining to establish the Project s economic viability. It is assumed that all coal seams thicker than 0.3m can be mined as ROM coal. No quality cut-off parameters have been applied. After reviewing the Carabella Feasibility Study documents, (Geology and Resources, September 2013 and Coal Handling and Preparation, October 2013), it is the Competent Person s opinion that all mined coal can be beneficiated or bypassed to achieve a saleable product. Mining factors or assumptions Metallurgical factors or assumptions The waste and coal is removed using truck/excavator in a terrace mining method. Mining coal loss was assumed to be 5%, mining dilution was assumed to be 5% at a density of 2.3 tonnes per bcm. Insitu coal moisture content was assumed to be 3%, ROM 7% and product moisture 10% Parting and interburden thicknesses are greater than 0.3m in all cases and no aggregation of thin waste into coal seams has been performed. For geotechnical reasons, the maximum open cut mining depth has been assumed to be 250m or shallower where the economics do not support mining to this depth. Geotechnical assumptions were derived from an expert geotechnical study. The slope angles that were used in the open cut pit design were: 55 degree effective angle for highwalls and endwalls and 33 degree effective angle for low walls. Mining strips were orientated to progress along strike. Mining strips were between 200m and 300m in width along strike and up to 800m length across the pit. Access to the mining area is via a ramp system on the advancing face. Eight coal quality holes have been drilled to date. Seven of the holes yielded slim core coal seam samples (HQ and PQ size) which were analysed for raw coal properties and basic washability. The eighth hole (BLU086C) was drilled to recover 200mm core for detailed washability testing. The bore core yields that have been used in this estimate are: A1: 82.5%, A2: 82.5%, P1: 86.3%, P2: 75.0%, O1: 81.5%, O2: 81.5%, Pi1: 81.5% An inefficiency factor (loss of yield) of about 5% has been applied in all float/sink yields as listed above to take into account process efficiency and the effect of dilution on process efficiency. Based on bore core float fraction ashes corresponding to the above stated yields, 80% of the P1 seam was bypassed to make up to a 10.5% ash product as a blend of all mined seams. Costs and revenue Carabella is currently in discussions with suppliers regarding the provision of project infrastructure and mining services. The availability and costs have been reviewed by the Competent Person and appear to be reasonable. Operating costs were derived from responses submitted by contractors as part of a number of tender processes. Contract negotiations are ongoing and prices remain commercial in confidence. Revenue factors were sourced from third party industry consultants. Market assessment A market assessment was undertaken by Carabella Resources. The study assessed the following items within the report: Market outlook for PCI coal, Supply and Demand, Raw and target product coal quality, The product competiveness against similar known deposits, and Independent assessment of a coal marketing strategy based on the target product quality and price and volume forecasts. The PCI export coal market is a well-established market. Pricing is based on fixed carbon content and level of contaminants namely sulphur and phosphorus. Forecast continued growth in global steel making is likely to lead to growth in the use of PCI coal. The coal at the Bluff Project is similar in specification to other Australian based PCI mines that are currently exporting coal. Other The approvals/permits process is well advanced. Carabella have lodged an Environmental Authority (EA) application and a Mining Lease Application (MLA). After reviewing the Project schedule, the Competent Person has no reason to believe the Project will not achieve these approvals. Environmental field studies and investigations have been conducted in the following areas: Page 5 of 6

6 Terrestrial ecology, Aquatic ecology and stygofauna, Surface water, Groundwater, Air quality, noise and vibration, Social and economic aspects, Overburden and geochemistry, and Soils and land. At this stage environmental investigations have not identified any issues which would be expected to result in delays to the approvals process. The characteristics of waste rock were not known at the time of this report. However, Carabella Resources were undertaking an analysis of the waste rock and material had been sent for laboratory testing. Due to the proposed mining and dumping strategy, it is the Competent Person s opinion that waste rock characteristics can be successfully managed so as not to affect the economics of the deposit. Product will be transported on the adjacent Blackwater rail line. The towns of Bluff and Blackwater are situated in close vicinity to the project. These towns currently support mining activities and have the necessary infrastructure to support future operations and house workers. The underlying cadastre in the MLA area includes freehold land, leased land and a small section of reserve. Discussions in relation to acquisition and compensation with affected landholders are well advanced. The edge of the town of Bluff is within 1km of the planned operations at the closest point. Measures will be required to limit the impact of noise, dust and visual amenity from the mining operation on the town. Several other Australian mines operate in similar close proximity to residential populations. Measures such as noise barriers, specialised machinery and use of water sprays are effective in minimising impact. It is the Competent Person s opinion that Carabella will obtain a social licence to operate. Classification Audits or reviews Discussion of relative accuracy/ confidence The total JORC reserves are Probable11.0 Mt ROM and 9.0Mt Marketable (10% M). As there have been no Measured Resources reported for Bluff, no Proved Ore Reserves have been derived from Measured Mineral Resources. MEC Mining has reviewed the study work completed to date by Carabella in the process of calculating the JORC reserve. The Reserves Estimate is based on the assumptions outlined in this report. The Competent Person is of the opinion that the following aspects represent issues of uncertainty for the Reserves Estimate: Geotechnical: A maximum mining depth of 250m was assumed due to uncertainties over geotechnical stability of the highwall and low wall at greater depths without mining experiences at Bluff. Mining Recovery: Mining losses of 5% have been assumed from the mining operation. This figure would equate to best practice for the Bowen Basin. Specific attention to mining practices will be required to achieve this level of performance. There is potential for coal resource gains through overlapping seams that have not been considered in this assessment. Washed Coal Yields: Wash yields are based on bore core float/sink results predominantly from slim core samples with a 5% yield loss applied to model process inefficiency. Yield modelling specific to the planned CHPP when completed, may yield different results. Normally plant efficiency losses would be within the range of +/- 5% yield. Page 6 of 6