ARIKA RESOURCES LIMITED — Capital/Financing Update 2007

Dec 23, 2007

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ASX/media announcement

Portland Orthopaedics Raises $1.5m in a Convertible Loan

24 December 2007, Sydney, Australia : Portland Orthopaedics Limited (ASX:PLD) has finalised a placement of $1.5 million in a secured, convertible loan. The term of the loan is 2 years, the interest rate is 10 percent p.a. compounding monthly, and interest may be paid in Portland scrip at the election of the noteholder. The loan converts at the lower of 22.5 cents or 85% of the VWAP over the 5 days prior to a conversion notice being issued. The maximum amount of the loan that can be converted in 1 week is $50,000. Any issue of shares on conversion of the notes is required to comply with ASX Listing Rule 7.1, including a requirement for Portland to seek shareholder approval, if necessary, and an event of default will occur if Portland becomes a subsidiary of another company.

The funding has been provided by London-based Trafalgar Capital Specialised Investment Fund. This fund is an alternative investment fund for privately-negotiated funding transactions for small and mid-cap publicly traded companies in Europe and elsewhere. It offers funding and corporate advice with crossborder expertise.

Portland has arranged this funding for working capital as well as to support product development.

“This innovative funding offers the opportunity for Portland to secure capital at a premium to the current share price therefore minimising dilution for shareholders,” said Mr John Lee, chairman of Portland Orthopaedics.

“Portland is at an important phase of its product roll-out and enabling funds flow to power the growth is imperative” he said.

BBY is Portland’s equity capital markets advisor and arranged the transaction.

Enquiries: John Lee Rudi Michelson Portland Orthopaedics Monsoon Communications 0419 407 191 0411 402 737