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1 ASX RELEASE Sorby Hills Silver Lead Project Major Milestone Achieved with Environmental Approval As announced on 3 April, the WA Minister for Environment has approved the development of the Sorby Hills Project as recommended by the WA Environmental Protection Authority (EPA) Positive Pre-Feasibility study highlights robust project economics and Bankable Feasibility Study will now commence Largest undeveloped near surface Ag-Pb-Zn resource in Australia with Global Resource of 16.7Mt at 4.5% Pb, 0.7% Zn and 52g/t Ag (2.5% Pb cut-off) Stage 1 development is a 400,000 tpa open cut operation producing approx. 20,000t Pb and 710,000 ounces of Ag in concentrate Initial Development (Stage 1) is a 10 year mine life based on the C and DE Deposits which account for only 27% of global resource base. Subsequent development should extend the mine life to more than 25 years, subject to necessary Government approvals With substantial infrastructure already available, the Project can be fast tracked to production with construction and commissioning targeted to commence in 2015 KBL Mining Limited (ASX: KBL or the Company ) announced on 3 April 2014, that the Western Australia Minister for Environment had formally approved the environmental conditions for development and operation of the Sorby Hills Silver-Lead-Zinc Project, located 50 kilometres north of Kununurra in the East Kimberley Region of Western Australia. The announcement foreshadowed this wrap up announcement to summarise the Project. The Sorby Hills Project is a joint venture between KBL 75% (Manager) and Henan Yuguang Gold & Lead Limited Co., 25% (Yuguang). Yuguang was established in 1957 and is the biggest electrolyzed lead and silver producer in China and was listed on the Shanghai Stock Exchange (exchange code: ) in Additional detail about Yuguang is at the end of this announcement. The Project consists of nine shallow high grade deposits within a linear north-south mineralised trend extending over a 10 kilometre strike length. To date, the total Resource of the trend as defined by KBL stands at 16.7 Mt at 4.5% Pb, 0.7% Zn and 52 g/t Ag, which is sufficient to support a multi decade operation. 1 1 Components of this Resource are set out on page 6 1

2 Following the environmental approval, the Joint Venturers are aiming to commence Stage 1 development activities in 2015 targeting a 400,000 tonne per annum open pit mining operation producing 20,000t lead and 710,000oz silver in concentrates per annum over a 10 year mine life. This is based on the C and DE Deposits which will only utilise 27% of global resource base. KBL Chief Executive Officer, Trangie Johnston, commented: The KBL team has been working tirelessly with relevant parties and stakeholders over the past 24 months to ensure all necessary outcomes were met for the continued progression of Sorby. We are delighted to have received the green light to progress Sorby with environmental approvals received from the WA Minister for Environment for the Stage 1 development and operation. The Company has a strong focus on continuing to establish ourselves as a leading diversified mineral development company, with the Sorby Hills Project strategically complementing our gold-copper-lead-silver operation at the Mineral Hill Mine in NSW. Looking ahead to the remainder of 2014, the Joint Venturers plan to complete a Bankable Feasibility Study, finalise construction design and organise project financing to pave the way for construction and commissioning to follow in Henan Yuguang Gold & Lead, Co. Limited General Manager, Mr Cai, commented: We are delighted that the Sorby Hills Project has received the Environmental Approval from WA Environment Minister after both KBL and Yuguang professional teams committed effort into all aspects of the Sorby Hills Project over the past two years. Yuguang will continue to actively cooperate with KBL on the Project s future plan and arrangement and will provide our best resources to get the Project into production as soon as possible. Project Fundamentals Stage 1 Development The scheduled development of the Sorby Hills Project has been based on an initial 10 year mine plan of the DE and C Deposits. These two deposits account for 1.5 kilometres of a 10 kilometre mineralised trend where a total of nine deposits have been identified (Figure 1). The DE and C Deposits are located within 20 meters of surface (Figure 2) and will be mined by shallow open cuts with lead-silver concentrates produced through a conventional sulphide flotation plant. The concentrates will be trucked some 160km via existing sealed roads to the port of Wyndham. It is expected that the Project will create some permanent jobs for Kununurra and during the construction phase some personnel will be required. The Project will be an important anchor employer in the Kununurra/ Wyndham area. The 400,000tpa Stage 1 development is expected to generate revenues of around $60-70 million per year at current metal prices. It is anticipated that the production rate can be increased to over 600,000tpa ore as the remaining seven deposits are further defined and brought into production, subject to necessary Government approvals. 2

3 Figure 1. Sorby Hills mineralised trend extends for over 10 kilometres in strike containing 9 deposits located near surface. The first 10 years production will be focused on the shallow DE and C Deposits which account for only 27% of the global resource base. Cross section A-B refers to Figure 2. 3

4 Figure 2. Cross section through the high grade core of the DE Deposit combined with an optimised pit shell highlighting the shallow nature and continuity of mineralisation. Black soil plains up to 12m deep provide free dig access along the entire length of the deposit and can be utilised for civil construction. 4

5 Table 1. Sorby Hills Stage 1 key project parameters for the first 10 years. Project parameters will be refined as more information becomes available as the project moves from Pre-Feasibility Study to Bankable Feasibility Study during Stage 1 Project Parameters Mineral Resource Global DE Deposit C Deposit 5.2% Pb+Zn & 52g/t Ag (2.5% Pb cutoff) 6.3% Pb+Zn & 61g/t Ag (2.5% Pb cutoff) 3.7% Pb+Zn & 21 g/t Ag (2.5% Pb cutoff) Ore Reserves DE Deposit 5% Pb & 54g/t Ag (2% Pb cutoff) C Deposit Subject to infill drilling/resource upgrade planned for 2014 Mining Open Pit Strip ratios Mine Life Pre-strip 400,000 tpa ore. Pits no deeper than 60m 3.7:1 life of mine 10 years 12m of free dig black soil plains (suitable for civil works) Processing Method Conventional crush, grind and flotation Recoveries Lead: 91%, Silver: 87% Production 37,000 DMT pa Pb-Ag concentrate Concentrate Grade 55% Pb & 600g/t Ag Metal 20,000t Pb & 710,000 ounces Ag pa Capital Costs Start Up Capital $70m Cash Costs Pb: $0.21/lb after silver credits Assumptions Pb: USD 2090, Ag: USD 30/oz, 1AUD=0.90USD Transport Mode Route Port Concentrate transported in sealed shipping containers 160km sealed road from mine site to the port Ship loading facility at port of Wyndham 5

6 Mineral Resource and Ore Reserve An initial global resource for all the deposits within the 10km long Sorby Hills mineralised trend produced in 2011 totalled 16.7 Mt at 4.5% Pb, 0.7% Zn and 52 g/t Ag (2.5% Pb cut-off), sufficient to support a multidecade mine life at the scheduled Stage 1 production rate of 400,000 tpa ore. Operations outside the boundaries of the currently approved Project (focused on mining the C and DE Deposits) will require government approvals. A revised mineral resource estimate and model for the Sorby Hills DE Deposit was produced in 2013 at a 2.5% Pb cut-off and totalled 2.7 Mt at 5.8% Pb, 0.5% Zn and 61g/t Ag (Table 2). At a 1% Pb cut-off, the DE Deposit totals 5.8 Mt at 3.5% Pb, 0.4% Zn and 41g/t Ag. C Deposit resource currently stands at 1.5 Mt at 3.3% Pb, 0.4% Zn and 21g/t Ag (2.5% Pb cut-off) and is classified at 45% Indicated and 55% Inferred (Table 3). An infill drilling program has been designed to support resource upgrade in preparation for reserve estimation for mid In addition, KBL reported an estimated maiden probable ore reserve for the DE Deposit in November The probable ore reserve of 2.4 Mt at 5% Pb and 54g/t Ag (2% Pb cut-off) was estimated through the assessment of modifying factors on the Indicated Resource component of the resource estimate and model completed in Table 2. Indicated and Inferred Resource estimate for DE Deposit at 2.5% Pb cut-off. Classification Ore Type Tonnes (kt) Pb % Zn % Ag ppm Pb+Zn% Indicated Oxidised Fresh 2, Total Indicated 2, Inferred Oxidised Fresh Total Inferred Total Indicated & Inferred 2, Table 3. Indicated and Inferred Resource estimate for C Deposit at 2.5% Pb cut-off. Classification Ore Type Tonnes (kt) Pb % Zn % Ag ppm Pb+Zn% Indicated Oxidised Fresh Total Indicated Inferred Oxidised Fresh Total Inferred Total Indicated & Inferred 1,

7 Figure 3. Proposed detailed infrastructure for Stage 1 project development at Sorby Hills with production focused on the DE and C Deposit. 7

8 Stage 1 Pre-feasibility Study Results KBL Mining completed a pre-feasibility study ( PFS ) for Stage 1 development in late 2012, based on a conventional open cut mine and sulphide flotation concentrator operation which confirmed the economic viability of the project. Based on the pre-feasibility modelling the pre-tax net present value ( NPV ) of Sorby Hills Stage 1 is $132 million. The study revealed a low capital cost estimate of $70 million (excluding mobile plant and equipment) which is due largely to the close proximity of crucial infrastructure requirements. Furthermore, limited initial overburden stripping is required to expose first ore for production and the convention plant size and design is readily available. The PFS demonstrated the potential to schedule average mine grades of 5.6% Pb and 70g/t Ag during the first 4.5 years of the Stage 1 development. Importantly, the solid cash flow generated during the initial stage of production will facilitate early pay back of capital investment. After the first 4-5 years of production, the remainder of the defined resource will be upgraded in a heavy media plant to ensure a constant metal output. Initial testwork has found the resource will be amenable to heavy media separation with high recoveries of both Pb and Ag. A low operating cost of an expected A$0.21/lb (net of silver credits) is supported by low cost open cut mining, low crushing and grinding costs for the carbonated hosted ore, high metallurgical recoveries and well developed infrastructure including a Kununurra based workforce. Next Phase During 2014, the Joint Venturers are aiming to undertake a Bankable Feasibility Study and apply for mining permits and operational licences in preparation for financing, construction and operations to commence. Current timing expectations see the construction and commissioning phase scheduled for KBL expects a range of funding options will be available for its share of the development costs due to the robust project economics, the low risk of development and operating parameters, well developed infrastructure, proximity to port, and strong international demand for the offtake. The development task will be assisted by the Company s operating experience and expertise already in place with the Mineral Hill operation and the support of its 25% Joint Venture partner, Yuguang with its large lead, zinc and copper smelting facilities in China. A detailed fly-through of the project is available on the Company s web site. Click here for Sorby Hills 3D Fly-through 8

9 For further information, please contact: Anthony (Trangie) Johnston Chief Executive Officer KBL Mining Limited Ph: About KBL Mining KBL Mining is an Australian resource company listed on the ASX (KBL and KBLGA) with a focus on producing precious and base metals. KBL s main assets include the Mineral Hill copper-gold-silver-lead-zinc mine near Condobolin in New South Wales and Sorby Hills lead-silver-zinc project in Western Australia. The Company has been operating the refurbished processing plant at Mineral Hill since October 2011 to produce copper concentrates. Sorby Hills (KBL holds 75% with Henan Yuguang Gold & Lead Co. Ltd (HYG&L) holding 25%) is one of the world s largest near surface undeveloped silver-lead deposits, close to port infrastructure and a short distance from Asian markets. More information can be found on KBL s website at About Henan Yuguang Gold and Lead Co Ltd Henan Yuguang Gold and Lead Co., Ltd was established in 1957 by the government of Jiyuan City which is in Henan Province in North China. In July 2002, Yuguang Gold and Lead Co., Ltd (exchange code: ) was listed on the Shanghai Stock Exchange (SSX). Current ownership is approximately 47.43% by Jiyuan City and two other provincial government entities and the balance by SSX investors. Yuguang is the largest lead smelting company and silver producer in China and has been among the Top 500 Chinese enterprises and Top 500 China manufacturing enterprise for the last five consecutive years. The main signature products produced by Yuguang are electrolytic lead, silver and high purity zinc which are all registered at LME and LBMA respectively. In 2013, Yuguang produced 372,800 tonnes of electrolytic lead, 700 tonnes of silver, 2,675 kg of gold and 269,300 tonnes of sulphuric acid and achieved sales of about US 1,881 million. Yuguang s plants are largely quite modern, are focussed on development of industrial technology and are environmentally-friendly. Its recently-refurbished lead smelting plant has achieved full automation. In early 2014, an entirely new copper smelting plant started production using the most advance technology in the industry. More information can be found on KBL s website at Competent Persons Statement The information in this report that relates to Exploration Results and Exploration Targets, Mineral Resources and Ore Reserves based on information compiled by Anthony Johnston, MSc (Hons), who is a Member of the Australasian Institute of Mining and Metallurgy and is a full-time employee of the Company. Anthony Johnston 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 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Johnston consents to the inclusion in the announcement of the matters based on his information in the form and context that the information appears. 9