ARIKA RESOURCES LIMITED — Board/Management Information 2007

Nov 27, 2007

Chairman’s Address

28 November 2007

The past financial year has been a year of challenges, opportunities and achievements.

1. Challenges:

   • a. The acquisition of our US distributor, Plus, by Smith and Nephew meant that Portland needed to reconsider its distribution method in the US, our main market.

   • b. New product development: The need to ensure our new products met and exceeded the expectation of Surgeons.

   • c. Outsourcing: the demand for Portland product exceeded the capacity of our manufacturing facility

   • d. Working Capital: There was a need to invest additional working capital to support the changed distribution method and increasing demand for Portland product.

2. Opportunities

   • a. To establish our own distribution network

   • b. To extend Portland’s product range

   • c. To expand the number of surgeons Portland products

3. Achievements

   • a. Portland now has a distribution network with more surgeons and more distributors than we had under Plus distribution.

   • b. Portland has established warehouse and facilitation systems to support increased sales

   • c. Portland has recruited senior sales management executives in the US and Australia

   • d. Portland has launched new products in an expanding product range

   • e. Portland has continued to invest in internal Research and Development

In the first three month of this financial year, sales have continued to grow, and with the availability of product enabling the launch in Australia, we expect sales growth to continue.

Your company is currently in the final stage of negotiations that would lead to an expansion of Portland’s product range in the short term, and the manufacture of Portland products in a world class facility.

These growth opportunities will require additional working capital and discussions are well advanced for the additional funding and financing facilities.

David Sekel and his team have worked extremely hard and have shown dedication and professionalism in identifying and meeting many challenges and achieving in their roles. I also thank our shareholders for their continued support.

In summary, Portland in its second year as a listed company has faced and resolved a number of challenges, developed and accessed a range of opportunities and has achieved a significant number of advances that have set the scene for continued growth.