ARIKA RESOURCES LIMITED — Capital/Financing Update 2008

Jun 23, 2008

Portland Orthopaedics.

investor brief june 2008

Portland is continuing to implement its strategy of expanding distribution of its artificial hip products in the US and Australia.

US Sales Progress

The number of hip replacement cases each month where Portland product is implanted continues to expand, with seven new surgeons implanting in April and May 2008. At the end of May there were 30 surgeons who had implanted product in the last 12 months. In the 12 months to the end of June 2008, it is expected that Portland product will have been implanted in 480 cases in the US. In the next 12 months it is expected that sales will continue to grow strongly in the US due to the current distributor base expanding the number of surgeons using Portland product in their territories, and the enrolment of further distributors. This is a gradual process built on strong relationships with surgeons, good management of the distribution networks and a unique product.

Australian Sales Progress

In March 2008 Portland appointed Lifehealthcare as its distributor for Australia. This has provided Portland with immediate salesperson coverage across Australia and the capability of exposing the Portland Modular Hip prosthesis to Australian surgeons for the first time.

By the middle of June, three new surgeons had implanted Portland product and all were satisfied with their early results.

While we are only two months into the Australian sales plan, the early indications are promising. Matt Briggs, Portland’s National Sales Manager Australia & New Zealand, says, “Whilst this is an extremely competitive market, in a relatively short period of time we have made significant progress and made a positive impression on the market.”

In the 12 months to the end of June 2008, it is expected that Portland product will have been implanted in 100 cases in Australia. In the next 12 months this number is expected to increase significantly as the combined efforts of Portland and Lifehealthcare continue to roll out the agreed sales plan.

In Australia and the US there are now regularly more than 50 cases per month where Portland product is implanted.

Expense Control Progress

The company’s immediate goal is to achieve profitability and positive cash flow as soon as possible. In support of this goal, it was important to find the balance between reducing operating expenditure, reducing cash outflow and maintaining a strong innovative future, as well as being able to continue to service the needs of our customer base. Portland has made some big strides in reducing its costs. In the second half of FY08, non-inventory operating expenditure (excluding sales distributor commissions) is expected to be 41% lower than in the first half. This has been achieved by reviewing our procurement practices, putting rigorous operating disciplines into our decision making around R&D expenditure and reviewing our staffing requirements. During the same period revenues are expected to have grown by 12%.

Portland Announces Underwriting Support for a Rights Issue

In order to implement the strategy of expanding distribution in the US and Australia, Portland is seeking to raise equity funds via a Rights Issue. The company also has available to it debt funds from NAB of $750,000.

The largest shareholders of Portland continue to support the company’s plans and are considering the opportunity to provide irrevocable commitment. As such commitment is made, Portland will update the market.

Portland is pleased to extend the offer to participate in the Rights Issue to all shareholders. The Rights Issue will allow existing shareholders at the entitlement date to subscribe to at least one share for every Portland share they own. The issue price will be $0.025 per share.

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