Chatham Rock loan bears 10% interest, fully drawn

• On 2026‑04‑08 the company announced that its US$150,000 loan to the New Zealand subsidiary is fully drawn and being used for working capital.
• The loan bears 10 % interest, with an additional 2.5 % per annum increase effective 31 Jan 2026 and resets every six months thereafter.
• Repayment can be demanded by the lender on five business days’ notice after each reset date.
• The lender receives a two‑year right of first refusal on any sale, financing, partnership or related transaction concerning the Chatham Rise project.
• The loan may be converted into shares (capped at 15 % of total equity) only if the company completes an equity‑finance transaction; conversion is subject to exchange approval.

• Debt burden: The loan adds a high‑cost, short‑term liability that must be serviced or repaid quickly. At 10 % (plus the scheduled step‑up), annual interest expense will be $15,000 USD – material for a company with cash of only CAD 39,610 and operating losses exceeding $120k per quarter.
• Dilution risk: The conversion feature could dilute existing shareholders up to 15 % if an equity raise occurs, compounding the already sizable warrant pool (≈ 30 M warrants).
• Strategic control: The lender’s right of first refusal on any Chatham Rise transaction gives a third party leverage over the company’s flagship offshore permit, potentially limiting future partnership or sale options.
• Liquidity pressure: Repayment demand can be triggered within five business days after each reset, creating immediate cash‑flow risk if market conditions deteriorate or financing is unavailable.

Overall, the loan introduces significant financial and governance risks that outweigh any short‑term working‑capital benefit, making this a material negative development.

Chatham Rock Phosphate Ltd. focuses on developing phosphate resources in New Zealand (Chatham Rise offshore permit) and Australia (Korella North & South mines). The Chatham Rise project is the flagship, holding a mining permit (55549) valid to 2033 with a marine consent. Australian assets aim to supply rock‑phosphate for downstream DCP/MCP production.