Chatham provides Quarterly Update

NEWS RELEASE 21-02 February 16, 2021


CHATHAM ROCK PHOSPHATE LIMITED
QUARTERLY UPDATE

WELLINGTON New Zealand – Chatham Rock Phosphate Limited (TSXV: “NZP” and NZX:
“CRP” or the “Company") provides shareholders and stakeholders with another of our
regular updates.

The last few months have been very good for CRP and its shareholders.

A combination of successful corporate initiatives, helpful background factors include rising
fertiliser prices and increasing international focus on the ESG (Environmental, Social and
Governance) attributes of companies appear to have significantly changed investor
perceptions of our company.

As a result, hundreds of new investors have invested in Chatham in recent months – see
more on that below. This groundswell of investor support is most encouraging and it’s a
great signal that we are seen to be on the right track given this broad-based support.


Corporate Initiatives

The merger with Avenir Makatea was announced in December and has in recent weeks
clearly impacted on investor perceptions in Germany, Canada and New Zealand (being the
three places where we have stock exchange listings). The market prices have risen in all
three markets and trading volumes particularly on the NZX in New Zealand, increased very
significantly. Consequently our recent private placement was oversubscribed for the first
time since 2015. And this time, due to the fundraising partnership agreement we have with
Stockhouse, we also attracted new Canadian retail investors for the first time since listing on
the TSX.V in 2017.

Welcome to 1,700 Sharesies Investors

In recent months much of the investing in Chatham shares has been undertaken by
predominantly NZ based investors using the retail investor platform known as Sharesies.

Before Sharesies was established we had approximately 1,300 shareholders in New Zealand
and about 2,000 in total. Now Sharesies investors alone number 1,700 and they are now our
second largest shareholder with over 3.4 million shares.

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Turnover was often less than 100,000 shares a month in NZ and less in Canada. Now it
regularly exceeds a million shares a month with over 2.8 million in February alone. Canadian
volumes have also increased, primarily due our relationship with Stockhouse and other
online marketing initiatives we have undertaken in overseas markets

Rising Fertiliser Prices

Chatham rock phosphate, in untreated form apart from being ground into small particles,
has (in recent independent tests) been established as being 85% as effective as triple
superphosphate (TSP).

TSP is manufactured in a two-stage process and results in quantities of waste products
being produced that need to be dealt with. TSP is expensive to produce and market prices
reflect that.

The good news is demand for TSP has risen during the last seven months driving the market
price from USD240/t to USD 337/t. The World Bank predicts the market price will continue
to rise. Rock phosphate prices are also predicted to rise.

The most recent estimate of the recovery and processing cost of Chatham rock phosphate is
less than USD80/t.

However it will likely be even lower than that for the Avenir Makatea sourced rock when
that project is at full production. And, due to its inherent quality the weighted average
selling price of the Avenir Makatea rock is likely to be higher.

The project economics of Chatham and Makatea, once fully permitted, are attractive.

Environmental, Social and Governance Wins
ESG has been brewing for a while, and is hitting the mainstream now, driven by united
demand from employees, investors and customers. All three groups are forcing companies
to step up against climate change and social injustice. As the pressure became explicit,
companies responded with a shift in operating principles, proving again the power of the
conscious consumer in today’s market.
ESG causes can be strong environment standards, such as sustainable natural materials,
water conservation and CO2 reductions. Or they can be advancing social issues, such as
diversity in workforce and leadership, human rights or poverty reduction.
CRP has been ahead of this wave for years and have been consistently advising investors
and stakeholders of the following benefits of using our rock phosphate product.

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1. Water quality – when applied to the soil in its natural form there is 80% to 90%
less run off into waterways due to its slow release characteristics. This results in
less riparian eutrophication. It has recently been established that eutrofied
waterways result in significantly increased carbon emissions
2. Significantly reduced (90% lower) carbon emissions due to closer location to
market and less frequent application to the land as a result of the slow release.
3. Improved soil health – Chatham rock phosphate (a reactive phosphate rock or
RPR) works with plant root eco-systems. Manufactured fertilisers tend to bypass
these and feed the top of the plant directly. As a result the plant root eco-
systems atrophy over time and the soils become inert.
4. Chatham rock contains approximately 2 ppm cadmium, ultra low by world
standards. Most of the major exporting countries have levels well over 60 ppm.
The EU has just introduced a limit of 60 ppm, due to eventually fall to 20ppm.
Cadmium accumulates in red meat and is directly linked to cancer in humans.
5. Avenir Makatea ticks all the same boxes.
Why the Avenir Makatea deal is so significant
This acquisition transforms Chatham’s investment profile and is a positive development for
us and for the shareholders of Avenir for a number of reasons including:
1. It broadens our portfolio as neither party will no longer be reliant on a single,
partially permitted phosphate deposit requiring a major cash injection to complete
the final step
2. AM has made significant progress since getting started in 2011 and particularly so
since we first considered investing back in 2015
3. AM rock phosphate comes in two blended forms. Both are very high grade, low
cadmium reactive phosphates, one type already certified in the Canada and USA
markets as organic and which will attract a pricing premium
4. The AM mining costs will be lower when in full production and rock prices are
expected to be higher than for our project and hence the project economics are
even more attractive
5. AM is well advanced in project finance discussions and expects multiple parties to be
competing for phosphate rock offtake agreements
6. It’s onshore so technology risks are reduced and environmental impacts will be small
scale, very easily monitored and controlled
7. It’s a very simple, open cut mining operation which will also mine valuable dolomite
rock (used for construction and roading) and food grade limestone as by products.
8. The project is based in a friendly jurisdiction where the permitting process will result
in a single permit including environmental operating conditions
9. Extensive consultation during the last nine years has resulted in local support from
the landowners, the residents of Rangiora (the local Commune), and the French
Polynesian administration
10. There are major community benefits as the mining process will rehabilitate a high
proportion of the unusable land resulting from historic mining

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11. The island of Makatea will also benefit from the construction of a new port , roads,
housing, schools and other infrastructure
We expect the Avenir Makatea project to be fully permitted in 12 months and project
development can then begin, leading quickly to strong operating cash flows which can then
pay for the Chatham Rise marine consent permitting process.
Progress Report on the Merger

Avenir Makatea is steadily working through the conditions that need to be satisfied before
the merger can be finalised. These include the commissioning of an independent report on
the phosphate resource which is now underway.

And given the short time frame before they go into production significant work is going into
further market development.

Avenir Makatea will be able to offer a range of phosphate, limestone and dolomite
products. Several are already certified organic and there appear to be at least two food
grade products. As such they appear likely to achieve premium prices.
Rare Earths Update
It’s been known for a decade that the seafloor muds in our permit area include rare earths
and other valuable minerals or elements. Subsequently, we established that the phosphate
nodules (which will be recovered using our existing engineering designs) also contain rare
earths and other valuable minerals.
These include 15 of the 17 recognised rare earths, as well as other valuable minerals
including nickel, cobalt, chromium, vanadium, zirconium, elemental fluorine and strontium.
The issue we face is to establish the technical and economic feasibility of extracting these
valuable substances. Before that we need to better understand how they are chemically and
physically bound together in both the seafloor muds and in our phosphate nodules. We
have recently completed the scoping the work required to be undertaken by a New Zealand
university and have just applied for a grant from the New Zealand government to partially
fund the project.
The Way Forward
Our key objective is to create value for shareholders and as such we have agreed to acquire
and advance the Avenir Makatea project in order to create shareholder value and the
means to progress a second application with the New Zealand Environmental Protection
Authority for a Marine Consent.

We are confident the second application will be successful because many positive changes
have occurred since February 2015. For example: Evolving farming-related environmental
standards, more rigorous health and safety standards and phosphate ethical supply issues
tilt the playing field in our favour.

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Chatham is benefiting from evolving social standards and views concerning a range of
environment and health issues. It’s clear the greater likelihood of our gaining a social licence
or community approval to operate will improve our chances of being granted the Marine
Consent.

Upon the grant of the Marine Consent, Chatham will be a fully permitted guardian of a
substantial source of low cadmium, reactive phosphate rock, relatively close to all the key
Asian markets. When successful with the Marine Consent, given the strategic nature of the
resource and the nil development costs required, the intrinsic value of the Company is
expected to be significantly higher than at present.

For further information please contact:

Chris Castle
President and Chief Executive Officer
Chatham Rock Phosphate Limited
64 21 55 81 85 or chris@crpl.co.nz



Neither the Exchange, its Regulation Service Provider (as that term is defined under the policies of the
Exchange), or New Zealand Exchange Limited has in any way passed upon the merits of the Transaction and
associated transactions, and has neither approved nor disapproved of the contents of this press release.