Widespread Energy advises additional mining concept study

New Zealand Exchange Limited
P.O. Box 2959
Wellington

24 January 2011

Dear Sir,

Widespread Energy advises additional mining concept study with dredging industry giant Jan de Nul

Widespread Energy Limited, as operator of the Chatham Rise Rock Phosphate Project, recently announced that it had reached agreement with three of the world’s largest dredging companies (Royal Boskalis, IHC Merwede and D.E.M.E.) to carry out two jointly funded mining concept studies.

We are now able to advise that a further jointly funded mining concept study will be undertaken by Belgian dredging company Jan de Nul. Jan de Nul senior executives have shown significant interest in the Chatham Rise Project since mid 2010 and this development is particularly good news. Jan De Nul had already provided a preliminary mining report for Chatham Rise phosphate, and will now provide a more detailed study of the mining and riser systems based on its earlier engineering for similar projects and additional studies on the most critical items. The work will be performed around the use of Jan De Nul’s large DP2 vessel Simon Stevin

As previously advised, after the three mining concept studies have been completed,
Widespread Energy will review them and then (with the assistance of suitably qualified industry experts) select an exclusive partner for detailed concept design, production testing and, ultimately the mining/dredging operation. Detailed concept design and production testing are expected to take at least 12-18 months.

This process enables Widespread to tap, at a manageable cost, the expertise of the world leaders in the dredging industry without the necessity to make what could be a premature decision on a preferred partner. Each of the dredging companies will also benefit from being able to undertake a jointly funded pre-feasibility study before being required to commit significant resources towards detailed concept design and production testing.

The directors of Widespread Energy and the Chatham Rise Project team are gratified that this project has attracted so much interest from these leading dredging industry companies.

Jan de Nul

Jan De Nul Group is a family-owned Belgian company that provides services relating to the construction and maintenance of maritime infrastructure on an international basis. Its

main focus is dredging (including other forms of marine engineering), which accounts for 85% of the turnover. Other areas include civil engineering and environmental technology.

Originally founded in 1938, in Hofstade near Aalst, Belgian Jan De Nul started as a construction company specialised in civil works and maritime construction. It was only in 1951 that the company entered into the dredging business.

Jan De Nul has 5,000 employees and a yearly turnover of 1.9 billion euro. One of the four largest dredging companies in the world, Jan De Nul has a fleet of over 80 ships, including 14 cutter suction dredgers, 26 trailing suction hopper dredgers, 20 split barges, 5 backhoe dredgers, and 17 rock transport barges.

Major projects recently undertaken by Jan De Nul include the Panama Canal expansion, the Port Botany expansion, the Palm Jebel Ali artificial island in Dubai and the nearby Dubai Waterfront project.

Chatham Rise Project Background

On 25 February 2010, a consortium comprising Widespread Energy and associated company Widespread Portfolios Limited, (“the Joint Venture or JV”) was granted an offshore prospecting permit by the Crown Resources division of the Ministry of Economic Development covering an area of 4,726 km2 on the central Chatham Rise. The permit area, which is in New Zealand territorial waters, is located 450 km east of Christchurch and includes significant shallow seabed deposits of rock phosphate and other potentially valuable minerals.

The initial term of the permit is two years with further priority rights to either extend the prospecting permit or apply for a mining licence.

An independent valuation of the project by Rockpoint Corporate Finance in May 2010 found the project had a realistic possibility of being commercially viable. It found that, based on conservative modeling, the project could earn net profit before tax of $40 million a year. Widespread’s own models put that figure as high as $80 to $100 million a year.

In addition to its financial potential, the project offers a number of benefits to New Zealand including:

• Reduced exposure to currency and commodity risk and reduced import burden
• Known, fixed costs
• Reduced carbon footprint from lower transport costs
• Possible export earnings.

The project is also New Zealand owned and controlled.

The challenges identified of extracting the resource include its sporadic distribution (it

averages 66 kg/m but there is great variability). Also extracting phosphate at 400m depth has not been achieved, though other minerals have been extracted at greater depths. The phosphate, in nodules of 2mm to 150mm, is located in a 1m layer of sandy silt above a chalky clay sediment basement.

Environmental considerations are an important part of the work being done and the company has an ongoing wide-ranging programme of consultation with fishing, conservation, Maori and other interest groups.

On behalf of the Board

Chris Castle

Onekaka, 24 January 2011

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