Kasbah Resources Limited (ASX:KAS) Announces An Entitlement Issue To Raise A$2.655 Million

Kasbah Resources Limited (ASX:KAS)

Perth, May 29, 2009 AEST (ABN Newswire) - Kasbah Resources Limited (ASX:KAS) is pleased to announce a 1:1 non-renounceable rights issue to Shareholders to raise approximately A$2.655m through the issue of approximately 88,500,000 new fully paid ordinary shares in Kasbah at an issue price of 3 cents per ordinary share.

The rights issue will provide Shareholders with the opportunity to increase their investment in Kasbah at an attractive price. Funds raised will be used to advance the Achmmach Tin Project to a point where mine planning studies can commence.

USE OF FUNDS

The purpose of the proposed rights issue is to fund the Meknes Zone Indicated (MZI) drilling programme.

The Meknes Zone Indicated drill hole programme aims to define spatial continuity of the Meknes Zone mineralisation and collect sufficient data for the estimation of a JORC indicated resource in the range of 1 to 2 MT from within the existing JORC Inferred Resource of 6Mt @ 0.9% Sn**.

Systematic drilling will focus on a 400 metre zone along strike from the mineralisation defined by BRPM in the underground workings (structures B and C) on the 3714525mN section from 243000mE to 243400mE extending from the 950mRL to the 800mRL.

To achieve this 15,000m of diamond drilling on a nominal 50m x 50m grid is planned from 37 surface holes over 9 sections. Total estimated cost for the MZI Programme is A$3.4M.

ELIGIBILITY AND INDICATIVE TIMETABLE

Shareholders who are registered as at 5:00pm (ACDT) on 10 June 2009 (the "Record Date") will be given the opportunity to subscribe for shares pursuant to the issue. Please note that Kasbah shares will be quoted on an "ex" basis from 3 June 2009, and therefore any Kasbah shares bought or sold on market on or after this date will not carry entitlements under the Rights Issue.

Lodgement of Prospectus with the ASIC     28 May 2009Notice sent to Shareholders               2 June 2009Ex Date (the last day for trading onthe ASX for a Shareholder to beentitled to participate in the Offer)     3 June 2009Record Date for determiningShareholder entitlements                 10 June 2009Prospectus despatched to Shareholders    12 June 2009Closing Date of Offer                    26 June 2009Shares quoted on a deferredsettlement basis                         29 June 2009Notify the ASX of under-subscriptions     1 July 2009Despatch date/Shares entered intoShareholders' security holdings           6 July 2009

* These dates are determined based upon the current expectations of the Directors and may be changed with 6 Business Days prior notice.

Kasbah is systematically evaluating the Achmmach Tin Project and the MZI Programme is the next step in our progress towards a development decision. Achmmach is now beginning to be internationally recognised as amongst one of the most significant new tin projects in development and Kasbah appreciates its Shareholders' support in the Company's progress towards the next critical milestone in the development plan.

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