Chatham Rock Phosphate signs Agreement for equity injection

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4 March 2016

Chatham Rock Phosphate Limited signs Agreement for $600,000 equity injection

Chatham Rock Phosphate Limited (NZX: CRP) today confirms that it has entered into a conditional subscription agreement for $600,000 of new shares (New Capital) from a private investor (Investor) at $0.006 per share.

The New Capital will be paid to CRP in instalments over a 12 month period. NZ$350,000 of the New Capital is unconditional and the corresponding ordinary shares in CRP will be issued to the Investor (on an unpaid basis) next week. CRP shares in respect of the remaining NZ$250,000 of the New Capital are conditional on a pre break announcement process being completed.

The subscription agreement also contains provision for the granting of options for one year at $0.006 (Options). If the proposed takeover offer by Antipodes Gold Limited (AXG) of CRP (Takeover Offer) is completed before 30 September 2016, CRP will procure that AXG grant the Options to the Investor. One (1) Option will be granted for every two (2) CRP shares subscribed for (up to 50 million in aggregate). The granting of the Options reflects the significance of the New Capital and CRP’s need for working capital following the Takeover Offer (see further comment below).

The Investor will be entitled to nominate one director to the Board of CRP.

Takeover Offer

CRP continues to work with AXG towards completing the Takeover Offer. Following discussions with the Toronto Stock Exchange (TSX), TSX has confirmed that in order for TSX to approve the issue of AXG shares (as consideration under the Takeover Offer) the merged entity (being AXG following the successful Takeover Offer) needs 12 months working capital as at the date on which the AXG shares are issued. CRP has calculated that its working capital deficit is NZ$1.5 million leaving a working capital deficit of NZ$900,000

CRP and AXG propose to make up the remaining working capital deficit by either:

1. issuing further CRP shares to qualified investors; or

2. AXG entering into convertible notes with investors which convert to AXG shares following successful completion of the Takeover Offer.

Accordingly, in addition to authorising the issue of the remaining NZ$250,000 CRP shares to the Investor, CRP’s pre break announcement will seek to authorise further capital raising at $0.006 per share of up to NZ$900,000.

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