Chatham Rock Phosphate Secures Financing

13 March 2012

Chatham Rock Phosphate Secures Financing with Subsea Investments

Chatham Rock Phosphate (CRP) is pleased to advise that it has today entered an Investment Agreement (the Agreement) with Subsea Investments II, LLC (Subsea).

Pursuant to the Agreement CRP has today issued to Subsea:

•11,442,641 shares at an issue price of $0.20 per share to raise NZD$2.28 million.
•11,442,641 unlisted options which have a three year term and may be exercised into ordinary shares on a 1:1 basis for an exercise price of $0.30 per share (Options).

The Agreement further provides that, subject to CRP shareholder approval in accordance with the listing rules, CRP will (at Subsea’s discretion):

•Issue up to a further 1,853,429 shares to Subsea at an issue price of $0.20 per share to raise a further NZD$370,000.
•Issue up to a further 18,319,264 Options to Subsea (matching on a 1:1 basis the shares issued above and the shares that may be issued on conversion of the Loan below).
•Enter a convertible loan agreement with Subsea where Subsea will advance up to $3.3 million to CRP (Loan). Subject to compliance with the Takeovers Code, the Loan can be converted by either CRP or Subsea into shares in CRP at a conversion price of $0.20 per share. The Agreement also provides that Subsea may, but is not obliged to, advance a further NZD$1.2 million to CRP on the same terms and conditions except that:
o The conversion price for that subsequent advance will be agreed at the time that the advance is made but will not be less than $0.20 per share; and
o No Options will be issued in connection with that subsequent advance.

The Board of CRP intends to hold a special meeting in approximately three weeks time for shareholders to consider approving these further transactions. If approved:

•Subsea will hold a 19.99% shareholding in CRP.
•CRP will have up to approximately NZD$7 million in new capital through the above share issues and the Loan.
•Subsea will hold up to 30 million options which, if all exercised, would generate an additional NZD$9 million in new capital for CRP.

Full details of these transactions will be set out in the notice of special meeting which will be released to the market and posted to shareholders at the end of next week.

The Board of CRP is delighted to welcome Subsea as a cornerstone investor in the company. This year’s work programme for CRP is likely to cost NZD$8-$10 million and we expect that this investment will ultimately constitute over half of that funding requirement. We also now have a number of avenues to pursue to fund the balance of our work programme. Subsea’s investment is therefore a significant and exciting step in securing the future of our rock phosphate project.

Full particulars of today's allotments follow below and include an allotment of 50,000 shares to a qualified investor at $0.20 per share.

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