ARIKA RESOURCES LIMITED — Capital/Financing Update 2008

Jul 7, 2008

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Announcement

Supplementary Rights Issue-Cleansing Statement

8 July 2008, Sydney.

Notice under section 708AA of the Corporations Act 2001

Portland Orthopaedics Limited ( Company ) (ASX: PLD) gives the following notice under section 708AA(12) of the Corporations Act 2001 ( Corporations Act ), as inserted by ASIC Class Order 08/35 ( Notice ).

This Notice is supplementary to the notice given by the Company under section 708AA(2)(f) of the Corporations Act to the ASX on 25 June 2008.

Underwriting agreement

On 24 June 2008, the Company announced its intention to undertake a non-renounceable rights issue of approximately 162.9 million shares on the basis of one New Share for every one ordinary share held at 7.00pm on 3rd July 2008 at a price of 2.5 cents per New Share ( Rights Issue ).

On 7 July 2008, the Company entered into an underwriting agreement with GBS Venture Partners ( Underwriter ) ( Underwriting Agreement ) who has agreed to partially underwrite the Rights Issue. Under the terms of the Underwriting Agreement, the Underwriter has agreed to underwrite the subscription of up to 32,000,000 New Shares (including taking up its Entitlement under the Offer) ( Underwritten Shares ).

Representations and warranties

The Company makes a number of representations and warranties to the Underwriter including (without being exhaustive) that:

• the Company will be permitted to issue all the Underwritten Shares under ASX Listing Rule 7.1;

• no insolvency event has occurred or is threatened and there are no proceedings that are likely to lead to the occurrence of an Insolvency Event in respect of the Company or a related body corporate of the Company if the Offer is successfully completed;

• the offer document for the Rights Issue ( Offer Document ) and other public disclosures made by the Company will not contain any material statement which is misleading or deceptive by material omission;

• the Company has not engaged in, and will not engage in, conduct that is misleading or deceptive or is likely to mislead or deceive in connect with the Rights Issue;

• until the New Shares are issued, the Company will carry on its business in the ordinary course and will not dispose or agree to dispose of the whole or any part of its business or property (except in the ordinary course of trade);

• the Company will continue to carry out reasonable and appropriate due diligence investigations until the New Shares are issued; and

• no litigation, arbitration, claim, dispute, administrative proceeding or investigation has been commenced or is pending in relation to the Company of which the Company is aware after having made due and proper enquiries.

Termination

The Underwriter may terminate its obligations under the Underwriting Agreement if a number of events occur, including (without being exhaustive):

• approval for official quotation of the New Shares on ASX is not granted;

• a contravention by the Company of the Corporations Act, the ASX Listing Rules, its constitution or any applicable law or regulation;

• the Offer Document or the Rights Issue does not comply with the Corporations Act, the ASX Listing Rules or any other applicable law or regulation and is not rectified;

• the Company breaches any of its material obligations under the Underwriting Agreement; and

• any representation or warranty contained in the Underwriting Agreement on the part of the Company is not true or correct in a material respect.

Indemnity

Subject to certain limitations including in case of fraud, negligence or wilful misconduct, the Company indemnifies the Underwriter and its respective directors, officers, employees and advisers against all losses sustained or incurred in connection with the Offer.

An Offer Document and an Entitlement and Acceptance Form has been mailed to eligible shareholders.

For your information, a copy of the Offer Document for the Rights Issue has been made available on Portland’s website http://www.pldortho.com.

For further information please contact: James A Wynn Company Secretary Portland (02) 9700 1533

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