Mr. Chris Castle reports

WORK PROGRAMME APPROVED FOR CRP'S PACIFIC RARE EARTHS SELENIUM EXPLORATION PERMIT AT GUNNERSIDE

Chatham Rock Phosphate Ltd. has moved another step forward with its selenium prospect EPM 28676 as the Queensland Department of Resources has approved the exploration work program for this prospect.

Exploration area EPM28606, near Hughenden in Northern Queensland, with outcropping beds of the seleniferous Toolebuc formation limestones, is one of only two recognized hotspots in Australia for highly seleniferous soils.

The other hotspot is at Tambo where the company already holds EPM28606 covering 196 square kilometres.

Exploration licence EMP28676 covers an area of 19.6 square km in the Richmond-Hughenden region of North Queensland nominating selenium as the target. The area that is centred on the local grazing/farming property of Gunnerside Station is transected by the Flinders Highway and the Townsville-Mt. Isa rail line, and is well served by local infrastructure in the town of Hughenden 20 km east of the area.

The shallow-dipping and outcropping beds of Toolebuc limestone are up to 20 m thick.

There is extensive existing geological data to the north and west of EMP28676, mostly from current and past vanadium exploration. The exploration program will commence with soil sampling to identify drill sites.

Selenium minerals are rare, and although selenium-rich ores exist few are mined exclusively for the element. Most selenium is obtained as a byproduct of copper ore processing. Selenium is occasionally found in pure form. It occurs in the rare minerals clausthalite and crooksite.

The inclusion of selenium in the Queensland government schedule of new economy minerals (NEM) recognizes the significance of the mineral to the state. Selenium is to be found in its inorganic state as in the seleniferous Toolebuc formation and in the organic state in certain plants. The company has an interest in both forms, both inorganic and organic, since selenium has application in new technologies as well as in fertilizers and supplements for livestock in selenium-deficient areas of Australia and New Zealand.

Pacific Rare Earths Ltd.

Chatham's wholly owned Australian subsidiary, Avenir Makatea Pty. Ltd., trading as Pacific Rare Earths, made the application. Pacific Rare Earths (PRE) is the umbrella company for the Chatham's existing rare earth elements projects at Korella North, Korella Central and Korella South in Queensland, the Chatham Rise project offshore New Zealand, and the selenium project at Tambo.

We seek Safe Harbor.