Chatham Rock enters term sheet regarding 15% of unit

Executive Summary

• Chatham Rock Phosphate Ltd. entered a non‑binding term sheet on July 4, 2025 for an arm’s‑length party to acquire an initial 15 % interest in NewCo, which holds the wholly‑owned subsidiary that controls the offshore Chatham Rise phosphate mining permit (MP55549).
• The acquiror has an exclusive right to earn‑in up to a 75 % stake by meeting technical, financial and regulatory milestones; Chatham Rock will retain a 2 % net smelter royalty (with optional repurchase rights).
• Due diligence is complete, negotiations for binding documentation are underway, with the goal of finalizing agreements in calendar 2025.

Key Details

• Initial Stake: 15 % equity in NewCo (sole owner of Chatham Rock Phosphate (N.Z.) Ltd.).
• Earn‑in Option: Up to 75 % ownership via stepwise equity tranches tied to mutually agreed milestones (technical, financial, regulatory).
• Capital Contributions: Acquiror will fund all future project capital unless third‑party investors are added to NewCo.
• Royalty Structure:
• 2 % net smelter royalty retained by Chatham Rock.
• Acquiror may repurchase two‑thirds of the royalty at fair market value within three years of production start.
• Potential additional royalty kicker up to a total of 2.5 %, contingent on spot or realized sale prices (to be defined in final docs).
• Regulatory Approvals Required: New Zealand Petroleum & Minerals and Toronto Stock Exchange approvals may be needed.
• Due Diligence Status: Completed by four acquiror representatives who were based in Wellington; negotiations for binding documents are now proceeding.
• Timeline: Exclusivity period of six months from July 4, 2025; objective to complete definitive transaction documentation within 2025 calendar year.
• Previous Disclosures: Referenced in MD&A “subsequent events” notes for the quarters ended March 31 and June 30, 2025, and in the Oct. 24, 2025 private placement announcement.

Notable Quotes

“This is potentially the most significant event in the history of the company.” – Chris Castle, Founder, President & CEO, Chatham Rock Phosphate.

Safe harbor statements omitted for brevity.