Chatham Rock Phosphate : CRP 2021 Full-Year Financial Statements and MD&A

CHATHAM ROCK PHOSPHATE LIMITED ("CRP")

MANAGEMENT'S DISCUSSION & ANALYSIS

FOR THE YEAR ENDED MARCH 31, 2021

(All amounts stated in Canadian dollars, unless otherwise indicated)

Attention is called to a caution in respect of Forward-Looking Statements - included at page 25

CRP is Stock Exchange listed in Canada, New Zealand and Germany.

As a result, Chatham is positioned on the world stage to more effectively raise funds from international investors. These funds are required to reapply for the Marine Consent required to give effect to our granted mining permit. Our overall objective is the mining of phosphate nodules on the Chatham Rise (offshore New Zealand).

The TSX.V listing in Canada was achieved by means of a merger with dual listed Antipodes Gold Limited ("Antipodes Gold"), which, having sold its Coromandel based gold assets to Newmont New Zealand was a cashed-up shell. Antipodes Gold consolidated its shares 1 for 10 and then made a one Antipodes share for 65.59 Chatham shares offer. That process was complex, highly regulated and took over a year to complete.

In parallel with that CRP undertook multiple investor roadshows in Europe and Canada and continued to steadily raise working capital from investors there, as well as in New Zealand and Asia. CRP has now raised more than $7.9 million since the Marine Consent was declined in February 2015. During this period, the market capitalisation has recovered from $2.4 million to over a peak of $10 million and is presently around $6.2 million on the TSX.V and $7.5 million on the NZX.

The cornerstone investors are based in Australia, Singapore, Germany and Switzerland and together with the CRP management team hold, directly and indirectly, approximately 53% of the company. The rest of the shares are held by more than 3,000 shareholders in nine countries.

CRP is expecting to raise the funds required to complete the Marine Consent reapplication and to cover the costs of the Environmental Protection Authority hearing to be held in 2022.

Once the required level of funding has been raised, it is then expected to take 15 months to complete the work required to submit the re-application with a likely submission date in Q1, 2022. This would lead to an expected grant date of Q1, 2023 and eventual production in mid to late 2025.

Chatham has been largely unaffected by COVID-19 and lock down restrictions.

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Contents
INTRODUCTION ..............................................................................................................................................	3
CORPORATE HISTORY AND NATURE OF THE BUSINESS .................................................................................	3
BOARD OF DIRECTORS....................................................................................................................................	5
CAPITAL TRANSACTIONS AND SIGNIFICANT EVENTS .....................................................................................	5
Capital Transactions ...................................................................................................................................	5
Significant Events........................................................................................................................................	5
CHATHAM ROCK PROJECT AND EXPLORATION..............................................................................................	7
FINANCIAL COMMENTARY ..........................................................................................................................	12
Selected Annual Information...................................................................................................................	12
Summary of Quarterly Results ................................................................................................................	12
Significant Expenses of a Corporate Nature............................................................................................	13
Liquidity and Capital Resources...............................................................................................................	13
Related Party Transactions......................................................................................................................	13
SUBSEQUENT EVENTS..................................................................................................................................	14
Use of Financial Instruments...................................................................................................................	14
Contractual Obligations and Commitments............................................................................................	14
Off-Balance Sheet Arrangements and Contingent Liabilities ..................................................................	15
Critical Accounting Policies and Estimates ..............................................................................................	15
Mineral Properties...................................................................................................................................	15
OUTLOOK.....................................................................................................................................................	15
RISKS, UNCERTAINTIES AND OTHER ISSUES ................................................................................................	16
Risk Factors..............................................................................................................................................	16
SUPPLEMENTAL TO THE FINANCIAL STATEMENTS .....................................................................................	25
Outstanding Share and Option Data .......................................................................................................	25
FORWARD-LOOKING STATEMENTS ............................................................................................................	25

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INTRODUCTION

This discussion and analysis of the operating results and financial condition of Chatham Rock Phosphate Limited ("Chatham Rock", or the "Company") for the year ended March 31, 2021, as prepared on July 28, 2021 should be read in conjunction with the audited consolidated financial statements and related notes for the same period and is intended to provide the reader with a review of the factors that affected the Company's performance during that year and the factors reasonably expected to impact future operations and results.

The audited consolidated financial statements and related notes of Chatham Rock have been prepared in accordance with accounting principles that comply with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. The financial statements and all amounts in this report are expressed in Canadian dollars, except where otherwise indicated.

CORPORATE HISTORY AND NATURE OF THE BUSINESS

Chatham Rock is incorporated under the Business Corporations Act (British Columbia) and listed on the Toronto Stock Exchange's Venture Exchange ("TSX-V"). The Company is also registered under the New Zealand Companies Act 1993 and listed on the New Zealand Stock Exchange ("NZX").

A name change from Antipodes Gold Limited to Chatham Rock, in February 2017, was undertaken at the same time as a reverse takeover arrangement for the Company to acquire its main subsidiary, Chatham Rock Phosphate (NZ) Limited ("Chatham (NZ)") (which was incorporated in New Zealand under the Companies Act 1993 on April 27, 2004).

Chatham (NZ)'s registered office and principal place of business is located at Level 1, 93 The Terrace, Wellington 6011, New Zealand.

Significant Intercorporate Relationships

Chatham Rock Phosphate Limited (Chatham Rock)

Incorporated under the Business Corporations Act (British Columbia)

	100%
Manmar Investments 106 (Proprietary) Limited	Chatham Rock Phosphate (NZ) Limited
Incorporated under the laws of Namibia	Incorporated under the New Zealand Companies
	Act 1993
		100%
	Pacific Rare Earths Limited
	Incorporated under the New Zealand Companies
	Act 1993

Chatham (NZ) is a junior mineral development company, focused on the development of a marine phosphorite deposit off the coast of New Zealand. It has not commenced mining operations or generated operating revenues to date.

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Chatham (NZ) holds a Mining Permit over an area off the coast of New Zealand with significant seabed deposits of rock phosphate, rare earths and other potentially valuable minerals.

In 2007, Chatham (NZ) and an associate applied for a prospecting license over an area covering a portion of a phosphorite deposit on the Chatham Rise, being historically an intensively investigated area of the Chatham Rise for potentially economic concentrations of rock phosphate.

In 2010, Chatham (NZ) (as to 90%) and its associate (as to 10%) were jointly granted a prospecting licence, pursuant to the Crown Minerals Act 1991 of New Zealand, covering 4,726 2 of the Chatham Rise. Following the prospecting licence being granted, Chatham (NZ) carried out significant background work as part of the licence requirements to further characterize the phosphorite resource and assess the potential environmental impacts of a possible mining operation in a marine environment.

Since acquiring the original prospecting licence in 2010, Chatham (NZ) has commissioned six cruises in two programs. The key objects of the cruises were to corroborate the previous work conducted on the Chatham Rise and to collect further geological, geotechnical, geophysical and environmental data. For phosphorite grade corroboration purposes, the M.V. Tranquil Image cruise collected 55 samples using a Van Veen grab. The R.V. Dorado Discovery conducted four cruises out to the project area and collected 181 box core and grab samples as well as environmental data.

The data collected by Chatham (NZ) allowed better delineation of the deposit. The more recent work by Chatham (NZ) on investigating this resource confirmed the general tenor of the phosphorite grades and location of phosphorite in the area, advanced work aimed at investigating the feasibility of mining the resource, and has provided valuable information to assess the environmental effects of the proposed mining operations.

In early 2011, Chatham (NZ) commissioned independent studies for the design of a system to recover phosphorite from the Chatham Rise seabed from three of the largest dredging companies in the world. Boskalis Offshore Subsea Contracting B.V ("Boskalis") was one of the participants and was selected by Chatham (NZ) as its preferred technical partner for the Chatham Rise Project.

Chatham (NZ) divested some oil and gas related investments to its associate in exchange for it transferring its 10% interest in the prospecting license to Chatham (NZ), resulting in the project becoming wholly owned by Chatham (NZ).

In September 2012, Chatham (NZ) applied for a Mining Permit in respect of a part of the area covered by the Continental Shelf Licence. As part of that application process and in anticipation of applying for the Marine Consent, Chatham (NZ) consulted with a range of stakeholders. This has included the local (Maori) Iwi, the Chatham Islands community, the Government, fishing groups and a range of environmental groups. The purpose of this consultation was to establish a relationship with these parties and to identify and resolve issues associated with the mining proposal. As a result, the Directors believe that the project is now well understood by a wide range of stakeholders and in turn Chatham (NZ) has a better understanding of the views and possible concerns of all parties whose interests are potentially affected by the project.

The Mining Permit was granted on December 6, 2013.

In May 2014, Chatham (NZ) submitted to the (New Zealand) Environmental Protection Authority ("EPA") a formal application for Marine Consents. The application was declined on February 11, 2015.

Chatham (NZ) aims to pursue a re-submission of its Marine Consent application and has been raising equity capital in preparation for this task.

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BOARD OF DIRECTORS

∙	Chris Castle	President and CEO (New Zealand based);
∙	Linda Sanders	Non-executive Chairman (New Zealand based);

• Robert Goodden Independent non-executive director (England based);

∙	Jill Hatchwell	Non-executive director (New Zealand based); and
∙	Ryan Wong	Non-executive director (Malaysia based)

CAPITAL TRANSACTIONS AND SIGNIFICANT EVENTS

Capital Transactions

Chatham (NZ) has continued to raise additional equity capital totalling $1.4m in the twenty four months to March 31, 2021. These funds are being applied to cover corporate overheads the cash costs relating to the Avenir Makatea acquisition and to limited preparatory work in reapplying for the marine consent for the Chatham Rise project.

Avenir Makatea Acquisition

On 30 June 2021, the Company completed the acquisition of Avenir Makatea Pty Limited ("Avenir"). Pursuant to the terms of the Share Purchase Agreement dated April 28, 2021 between the Company and Avenir's shareholders, the Company has issued a total of 17,857,738 common shares to the former Avenir shareholders (the "Consideration Shares"). The Consideration Shares are subject to a statutory hold period expiring October 31, 2021.

A total of 10,722,858 of the Consideration Shares were issued to Mr. Colin Randall, the Executive Chairman of Avenir, and a trust in which members of Mr. Randall's family hold an interest. In addition, pursuant to the terms of the Share Purchase Agreement, Mr. Randall has been appointed to the Company's Board of Directors. Upon gaining control over these common shares, Mr. Randall and his family trust now hold approximately 16.6% of the Company's issued and outstanding common shares.

Avenir, through its wholly-owned French Polynesian subsidiary, SAS Avenir Makatea, holds an exploration research permit to explore for phosphate on the French Polynesian island of Makatea. The Makatea project covers an area of 1,035 ha (10.36 km2). The island is a well-known source of phosphate and was previously mined until 1966. Avenir has filed an application for a mining concession over the project area which remains in progress.

Significant Events

Apart from progress in preparing for the marine consent reapplication, the Company completed its reverse takeover merger with Antipodes Gold Limited on 24 February 2017.

This resulted in Chatham Rock gaining a listing on the Toronto Venture Exchange (TSX.V Code "NZP"). Chatham Rock is now also quoted on the Frankfurt Exchange.

On September 5, 2018 Chatham Rock announced that it had recently formed a 100% owned subsidiary Pacific Rare Earths Limited.

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