Capital Raising Programme and Share Purchase Plan

1 December 2011

Further to the preliminary announcement released last week, Chatham Rock Phosphate has determined to undertake a capital raising programme over the next two to three months. The company needs to raise capital to avoid delays in our work programme and maintain operational momentum.

The intention of this programme is to raise $2 million to $5 million through a combination of a new share purchase plan offer and through undertaking private placements with qualified investors. The share purchase plan will offer existing shareholders the opportunity to subscribe for up to $15,000 of new shares at an issue price of $0.20 per share. The record date for the plan is 9 December 2011.

The issue price of $0.20 per share is the current market price of shares on the NZAX market. However the issue price represents a 26% discount to the volume weighted average price of Chatham Rock Phosphate shares over the last three calendar months ($0.271).

Capital raised will be applied:

Towards continuing progress with our work programme pending the offshore IPO being undertaken.
To fund further work towards the offshore IPO.

As mentioned in our preliminary announcement, in view of continuing adverse market conditions and the forthcoming year-end holidays the board of Chatham Rock Phosphate resolved to defer its proposed offshore initial public offering until 2012. The purpose of the IPO is to fully fund CRP through to a mining licence grant and commencement of production. Although it remains a priority to secure full funding for the project we consider it in the best interests of our shareholders to delay seeking full funding for now. This will allow time for markets to hopefully recover and allow Chatham Rock Phosphate more time to investigate the feasibility of extracting glauconite, in addition to rock phosphate, from our permit area.

On behalf of the Board,

Chris Castle
Managing Director

Download the Capital Raising Programme and Share Purchase Plan word document

Download the Notice of Event Affecting Securities