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1 GROSVENOR WEST CONCEPT STUDY COMPLETED HIGHLIGHTS Study concludes strong development potential for either open cut or underground operations at Grosvenor West: Production of 5Mtpa (ROM) and 3.5Mtpa saleable coal year mine life with potential upside Majority high quality HCC with export quality thermal co-product Competitive capital and operating cost estimates Robust project economics under various market scenarios First coal production 2015 The Directors of Carabella Resources Limited (ASX:CLR) (Carabella or Company) are pleased to announce the successful completion of the Concept Study for its 100% owned Grosvenor West Coking Coal Project (Project). The comprehensive study was completed by an in-house Carabella team with support from 13 external consultants including Palaris, MineOp, Salva and MetServe. The Concept Study provides a preliminary assessment on the development potential of the Grosvenor West Project. The study concludes that the Project has attractive development potential with robust project economics as either an open cut or an underground operation. The key features of each scenario are set out in Table 1 below: Table 1: Mining option key features Underground Open cut Mine life 14 years 20+ years Mineable resources (Mt) Up to 60 Up to 90 Avg ROM Production (Mtpa) 5 5 * Saleable Production (Mtpa) Coal quality Approx two thirds HCC Approx two thirds HCC Mining method Longwall Truck / shovel First coal OPEX (A$/ prod tonne) CAPEX (A$M) 830 1,032 Ramp up to full production 2 years 3 years * Annual production for open cut scenario is subject to variability. Production peaks between 5.5 to 6Mtpa for 10 years after initial ramp up. A significant ramp down period occurs towards the end of mine life. 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 The Company will now progress the Environmental Approvals process and carry out final studies to select the optimal mining option by mid Matters to be progressed in this period include further drilling and geotechnical evaluation, further consideration of approval requirements and other mine development opportunities and risks. 1. GROSVENOR WEST CONCEPT STUDY 1.1. Project Overview The Grosvenor West Coking Coal Project is located 10km north-west of Moranbah in the northern Bowen Basin, Queensland. The Project is situated on the eastern border of EPC 1069 with good rail options to ports being positioned adjacent to the Goonyella rail system (see Figure 1). Open cut and underground mining options were assessed and both were shown to be attractive development options. Either option allows the development of a significant mining operation producing approximately 5Mtpa ROM coal (3.5Mtpa product coal). Total mine life is expected to be between 14 to 20+ years with first coal targeted from late Figure 1: Grosvenor West Coking Coal Project Map Page 2 of 8

3 As announced in November 2011, the Project contains a JORC Resource of 145.8Mt within the Grosvenor West deposit, see Table 2. The deposit consists of 5 seams with 4 target seams at depths of between 95m to 180m and a total coal thickness of 10m. Table 2: JORC Resource Classification Mt % total Measured 41.5Mt 28% Indicated 36.1Mt 25% Inferred 68.2Mt 47% Total 145.8Mt 100% An updated resources estimate will be prepared in 1Q Mining Method A number of mining methods were considered in the Concept Study with the two preferred being: 1. underground (long wall) operation 2. open cut (truck & shovel) operation The key features of both the mining options are: Open cut Initial box cut in north with east-west orientated pit progressing southwards Two large electric rope shovels and three diesel hydraulic excavators moving up to 65Mbcm of waste per year Associated truck fleet including 190t and 360t class trucks Potential for in-pit crusher conveyor operations Underground Single longwall operating in height range of 3 to 4m Up to three development units to support the longwall operation Four longwall panels in the GL seam and five in the GLB seam The key strengths of the two mining options are: Open Cut Targets all available coal seams in the Moranbah Coal Measures thus recovering a greater proportion of the resource Underground Longer mine life More blending flexibility for product consistency Achieves full production sooner and allows a more consistent production rate Less exposed to wet weather related production losses Lower capital and operating costs and reduced labour requirements Smaller environmental footprint and potentially lower approvals hurdles Page 3 of 8

4 Figure 2: Open cut and underground mine plans Page 4 of 8

5 1.3. Coal Quality An extensive study has been made into the coal quality attributes at Grosvenor West and its suitability as a premium hard coking coal product. Coal washability testing has been completed and the preferred coal processing strategy is to produce a 10% ash coking coal and a thermal coal co-product. This approach delivers a total yield of approximately 70% comprising approximately two-thirds high quality hard coking coal and one-third export quality thermal coal. Coal washability results are set out in Table 3 below. Table 3: Indicative product yields Product Ash % Indicative Yield (%)* 10% Hard Coking Coal Product 46 25% Thermal Product 24 Two product total 70 *Gross yield through preparation plant Detailed coal quality analysis indicates that Grosvenor West can produce a world-class hard coking coal comparable to neighbouring producing mines including Goonyella Riverside, North Goonyella and Moranbah North. The quality attributes of the 10% ash product coal, especially strong caking properties, low phosphorous and benign ash chemistry are expected to be highly regarded by customers. This product is expected to sell at or close to benchmark metallurgical coal prices. The thermal co-product is expected to be saleable as a stand-alone product or as a blend component. A summary of the washed coal parameters is shown in Table 4. Table 4: Expected clean coal composite parameters Parameter 10% Ash HCC Thermal Co-product Inherent Moisture (% adb) Ash (% adb) Volatile Matter (% adb) Fixed Carbon (% adb) Total Sulphur (% adb) HGI Phosphorous (% db) Crucible Swelling No Roga Index 80 - Maximum Fluidity (ddpm) 4,000 - Maximum Dilatation (%) Ro Max Vitrinite (% by vol) 70 - Calorific Value (kcal/kg GAD) 7,620 6,150 Page 5 of 8

6 Detailed washability results have been correlated with an extensive database of raw coal values thus providing confidence that the test results are representative of the entire deposit. Further coal quality analysis is planned in 1Q 2012 including large diameter washability assessment, bulk sampling and coke testing Capital Cost Estimates The capital cost estimates for the mining options are set out in Table 5 below. These estimates are based on detailed studies undertaken by the consultants including Palaris. Table 5: Grosvenor West Project establishment capital cost breakdown Capital Cost Expenditure * Underground (A$M) Open cut (A$M) Surface Infrastructure and related costs Coal Handling and Preparation Plant Plant and equipment Total 830 1,032 * Excludes any contingency, escalations and capitalised mine development costs. The capital costs equate to A$166/annual ROM tonne and A$206/annual ROM tonne (underground and open cut respectively). These figures are considered competitive compared to recent industry benchmarks Operating Cost Estimates The operating cost estimates are considered competitive under both options. The breakdown of the operating costs is detailed in Table 6 below: Table 6: Grosvenor West Project Cash Operating Costs Cash Operating Costs * Units Underground Open cut Pit top ROM cost A$ / ROM t Free on Rail A$ / prod t Port, rail and etc. A$ / prod t Free on Board (C1) A$ / prod t * Operating costs estimates exclude any contingency, escalation, state royalties or MRRT costs. The FOB costs include rail, port and marketing costs. The estimates have been determined on an owner-operator basis and are based on assessed industry operating costs in Queensland. Page 6 of 8

7 1.6. Upside Potential Upside potential for the Grosvenor West project includes: Reducing operating and capital costs Expanding the size of the mineable resource Investigating potential cross-lease opportunities with neighbouring mines These opportunities will be evaluated during the next phase of the project. 2. NEXT STEPS Carabella will continue with detailed studies to finalise the preferred mining option for the Feasibility Study. Key milestones for the forward work program at Grosvenor West are set out below: Milestones Completion of Concept Study Jan 2012 Submission of MLA and EA Feb 2012 Confirmation of preferred mining option June 2012 Complete Feasibility Study Sep 2013 Investment decision Dec 2013 Mining Lease approval 1H 2014 Project Execution 1H 2014 First Coal Late COMMENTARY Carabella s Managing Director, Anthony Quin commented: Completion of this Concept Study is a significant milestone for Carabella. It confirms the attractive development potential of the Grosvenor West project. Our coal quality evaluation indicates that this is world class coking coal with excellent metallurgical properties. Our two product strategy maximises the overall value proposition for Grosvenor West. We look forward to taking the Project into Feasibility in the coming months and intend to commence the formal environmental approvals and Mining Lease Application process immediately, he said. Page 7 of 8

8 CONTACT: Anthony Quin Kylie Anderson Managing Director Company Secretary Tel: Tel: Web: kylie@anderssonlyne.com Geoff Fowlstone Media Competent Persons Statement The information presented in this announcement relating to exploration results, coal resources and exploration targets 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. Page 8 of 8