Chatham Rock Phosphate Project valued at $34 million

16 March 2011

Two independent reports support a board valuation that the current value for the Chatham Rock Phosphate Project is $34 million.

Widespread Portfolios and Widespread Energy sought the reports for a proposed asset swap between the two companies to enable the project to stand alone within Widespread Energy prior to its Canadian capital raising and Toronto Stock Exchange listing.

The companies are aiming to extract the phosphate nodules, using dredging technologies, from the sea floor in shallow waters on the Chatham Rise, off the east coast of the South Island.

The proposal, to be considered by shareholders of both companies on 30 March, would see Widespread Portfolios swap its 10 per cent share in the project for an increased shareholding plus Widespread Energy’s non-project assets – interests in the Kotuku PEP 38526 West Coast oil seeps, and shareholdings in Akura, a Fijian oil prospector, and Green Gate Ltd, a private oil explorer which no longer holds any licence interests.

Widespread Portfolios would continue to retain a strong interest in the rock phosphate project through the issue of just over 4 million Widespread Energy shares at 70.5c a share, (worth $2.9 million) bringing its total security holding from 19.76% to 26.26%.

Managing director of both companies Chris Castle said the directors were gratified their valuation had been supported by both independent reports.

“We believe this project has great potential, as an investment for our shareholders and as a resource with significant environmental and economic benefits for New Zealand.

“Our proposed structure gives a “clean” company for the project and allows shareholders of both Widespread companies to continue to participate in its future.

This valuation was reviewed by Simmons Corporate Finance on behalf of Widespread Energy shareholders and by McDouall Stuart Corporate Finance for Widespread Portfolios shareholders, which both concurred with the fairness of the valuation.

The full independent adviser reports, details of the board valuation and other meeting documentation were released to NZX this morning and are available for review. Securityholders will be receiving these by post shortly. The Boards of both Widespread companies look forward to discussing these matters with shareholders further at the Special Meetings to be held on 30 March 2011.

For and on behalf of the Board
Widespread Energy Limited

ENDS

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