Chatham to Undertake Public Capital Raising

The Board of Chatham Rock Phosphate has decided to proceed with a capital raising offer to the public in New Zealand under a simplified disclosure prospectus.

The offer will seek to raise $4 million with the ability to accept oversubscriptions of a further $6 million. The offer will consist of new ordinary shares at an issue price of $0.35 per share with one option attached to every three shares issued. The options will have an exercise price of $0.70 to receive one share and will be exercisable over a three month period following the grant of a marine consent for Chatham Rock Phosphate’s Chatham Rise phosphorites project.

A draft application for the marine consent has already been filed with a final application intended to be filed in approximately a month’s time. The marine consent, together with the mining licence (which is expected to be granted shortly) represent the key regulatory approvals needed for the project to proceed. Accordingly obtaining the marine consent is seen as a considerable de-risking step for Chatham Rock Phosphate and appropriate for triggering the option exercise period. Chatham Rock Phosphate will seek quotation of the options on the NZAX market.

The purpose of the offer is to substantially fund Chatham Rock Phosphate through to mining commencement, presently scheduled for 2015. To date Chatham Rock Phosphate has principally been funded through a combination of private placements with qualified investors and annual share purchase plan offers to shareholders. This offer will be available to any member of the public in New Zealand and its success would allow the management team to focus on achieving operating milestones for the project rather than needing to focus on seeking additional funding.

As recently announced, Edison Investment Research has assessed an un-risked value per share for Chatham Rock Phosphate of $2.00. While risks remain in the project, Chatham Rock Phosphate considers that the pricing of the offer represents attractive potential upside for investors against this valuation. The key will be Chatham Rock Phosphate maintaining project momentum over the next 12 months which will de-risk the project further and keep it on target for mining commencement in 2015.

The simplified disclosure prospectus for the offer is expected to be registered shortly with the offer opening in the next fortnight and closing in mid-July.

On behalf of the Board,

Chris Castle

Chief Executive Officer