ARIKA RESOURCES LIMITED — AGM Information 2007

Nov 27, 2007

‘Everyday things, like doing your shoelaces, to taking the dog for a Portland Orthopaedics

2007 AGM Presentation - CEO

Corporate Highlights

• Released the Equator Plus cup in January 2007 following M-COR Sept 06 release

• US sales have grown 345% overall in the 12 months to Sept 07

• US surgeon users have grown 620% overall in the 12 months to Sept 07

• US distributors now exceed 15 agencies across the US

• US surgeon retention and clinical results are above expectation

Corporate Highlights

• Move to outsourcing is working with significant margin improvements

• Capacity shackles are now removed

• Strong new product innovation and release schedule set for 2008/2009

• Opened St Clair Michigan office June 07

• Strategy is strong and milestones are being met

Orthopaedic Market

‘Large, growing and profitable’

Orthopaedic Market-US

• •Total Orthopaedic Rev US$29b (2006)

• •Reconstruction Rev US$10.5b (2006)

• •US is 53% of global revenue

• •2.3m joints done per year

• •1.2m hips 956,000 knees

First M-COR/EQ+ implant Florida USA

• •US Volume is 47%

• •Access to health care improving as the population of the developed world ages •Hip fracture and other degenerative conditions is rising at the rate of 6-10% pa

• •Osteoarthritis is the common cause

• •Osteoarthritis affects 21 million people in the US

• •Knee growth estimated at 673% by 2030 Hip to 175%

Products

‘Differentiation is the key to market penetration’

Strategy drivers

Who Gets Implants,By age,2005

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35
30
25
20
%
15 KNEE
10 HIP
5
0
<45 45-54 55-64 65-74 75-84 85+
Age
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•Focus on implants and materials that allow surgeon to balance/tailor make implant to each individual

• •Balance leads to reduced wear

• •Reduced wear leads to longer lasting implant

• •Focus on replacing the replacements

• •Revision sector is 25% of market

•Focus on young and well insured patient

• •Low price sensitivity and opportunity to upsell into contracted hospitals

Suite of Products

Advanced Development

Full modularity is the key

– Strategy for success new products

“This relationship between the salesperson and surgeon has a tendency to determine which brand the surgeon will buy. Historically, the surgeon’s loyalty typically has been with the orthopedic sales rep, rather than the company. If a sales rep decides to switch companies he or she is going to represent, there is a good chance the surgeon will switch as well. While these statistics have never been produced, we estimate that about two out of three surgeons that have been working with a distributor for more than eight years would follow a distributor to a new brand. The surgeons are loyal to their distributors because they see these individuals nearly every day, and the sales reps have effectively become part of the surgical team.

Healthpoint Capital – Devices, Distribution and Dollars 2005

• •Move to add general complementary hip and knee lines in 2008

• •Aim to offer a “full bag” products to distributors in 2008/09

Strategy for market penetration

‘Play to our strengths’

Strategy for success

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Focus on new technologies to expand on population available i.e. younger more
more active patients with premium pricing
Incremental rather than disruptive innovation
Develop, acquire and partner new products into our channel
Offer product “ family ” solutions
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Deployment

• Target Opinion Leaders

CLINICAL ADVISORY BOARD and CHIEF INVESTIGATORS

1. Senior Surgeon – UCLA

2. Senior Surgeon – Yale/St Raphael

3. Senior Surgeon – Tampa General Hospital and HCA

4. Senior Surgeon in Spokane WA

5. Senior Surgeon in Kenosha WI

6. Senior Surgeon in Bullhead AZ

7. Prof Royal Melbourne

8. Use clinical studies for collation of data and peer review articles

9. US distribution with 15 distributors

Plus Orthopedics USA

• 6[th] largest joint replacement company in the world

• Had independent distribution in the USA

• • Purchased by S&N in March 2007

• • Did 4 months of technical and regulatory DD

• • Distributed for 6 months pre take over

• • Had out of the box demand during agreement period

• Termination on very favourable terms from July 07

Business Performance

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US Surgeons per Month
y = -0.0212x2 + 2.5482x
R2 = 0.7615
Surgeons per Month
Q2006 Q2006 Q2006 Q2006 Q2007 Q2007 Q2007 PRQ 2007
Mar Jun Sept Dec Mar June Sept Dec
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• Surgeon take up is the key to growth

• Retention remains at 100% for M-COR and >90% for Eq+

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US Cases per Month
y = 0.0491x2 + 6.9662x
R2 = 0.9126
Cases per Month
Q2006 Q2006 Q2006 Q2006 Q2007 Q2007 Q2007 PRQ 2007
Mar Jun Sept Dec Mar June Sept Dec
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• Reflective of the growth in surgeon numbers

• Cross selling now available with more than one product

Business Performance

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Avg US Cases per Surgeon per Month
y = 2.1216x0.2 2 7 1
R2 = 0.3972
Avg Cases per Surgeon per Month
Q2006 Q2006 Q2006 Q2006 Q2007 Q2007 Q2007 PRQ 2007
Mar Jun Sept Dec Mar June Sept Dec
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Early champions are large users now giving way to general users who are demonstrating ability to expand case volumes with experience

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Annualised Costs
7.0
Research & Development
Operating Costs
6.0
Employee Costs
5.0 Total Segment Costs
4.0
3.0
2.0
1.0
0.0
Dec-05 Jun Dec-06 June Dec-07
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• 2007 was unique because of shift to lean production from R&D

• Expenses in all segments are coming down through active management of cost centres

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Annualised Marketing and Surgeon Consultants
Sales and Marketing
1.8
1.6 Consulting Fees
1.4 Total Segment
1.2
1.0
0.8
0.6
0.4
0.2
0.0
Dec-05 Jun Dec-06 June Dec-07
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Expenses in all segments are coming down through active management of cost centres

No need to increase cost centres as growth in sales occurs

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Sales and Marketing Costs as a % of Sales
50.0
45.0
40.0
35.0
30.0
25.0
20.0
15.0
% of Sales
10.0
5.0
0.0
Dec-05 Jun Dec-06 June Dec-07
%
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Sales and marketing fixed/sunk costs now being absorbed over higher revenues

Proportion of cost to sale will continue to fall with growth

Staff Salaries/Wages & Super Components of Employee Costs Leave ChargesDirectors Fees 07' - $3.146m Share Based Payments Other Taxes 83% of Employee Benefits Expense relates to staff wages (including OT) and salaries inclusive of superannuation paid on a cash basis. As of June 2007 year.

83% is broadly consistent with previous and 08 year

Annualised Employee Costs

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3.5
Emergence of Jun-07
3.0 triple shift
operations to
launch products Dec-07
2.5
leading to
significant wage
payments for OT
2.0
d 2T Outsouce manufacture
Dec-06
Jun-06 led to Ops staff
Dec-05 redundancy. However,
1.5
higher cost senior
sales and marketing,
1.0 development and
procurement &
Employee Costs logistics staff recruited
0.5 as gearing up
commercial teams
0.0
$M
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Movement in Dec 06 as ramped up production

Changes in March 07 as moved to outsource but lag effect to Jun 07

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Employee costs as a % of revenue
80.00%
Jun-06
70.00%
60.00%
Jun-07
50.00% Dec-05
40.00%
Dec-06
Dec-07
30.00%
Employee Costs % Revenue
20.00%
10.00%
0.00%
% Revenue
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Target 30% for ’08 and beyond

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Gross Profit %
100
90
80
70
60
50
40
30
GP%
20
10
0
Dec-05 Jun Dec-06 June Dec-07
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Move to outsourcing has led to significant margin improvements Early GP expected to be low as move from R&D to lean production Plus consignment stock to be phased out and higher margins experienced into 2008

Conclusion

‘Foundations are in place for strong market penetration in US’

Key messages

• Market dynamics remain strong

• Our products now have a history and are working

• Surgeons and distributors have been sticky

• • Margin improvements substantial with outsourcing impact

• • Strategy proven in US market and real focus on US clinical advisory teams

Portland Orthopaedics

Thank You

Disclaimer

This presentation has been prepared in good faith and with due care. However, none of Portland Orthopaedics Limited or its directors, employees or advisors warrant or represent the accuracy or completeness of the information contained in this presentation.

To the extent that the presentation contains any forecasts, projections or other forward looking statements, we note that there can be no guarantee that actual results, performance or achievements will be as stated. The reliance that the recipient of this presentation places on any statement, forecast, projection or assumption is a matter for their own judgment.