Expiry 4 February 2011 - CHARTER PACIFIC

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Expiry 4 February 2011 - CHARTER PACIFIC Powered By Docstoc
					                                       20 December 2010
      CHARTER
       PACIFIC
    Corporation Limited

       A.B.N. 12 003 344 287           OPTION HOLDER NAME
                                       OPTION HOLDER ADDRESS




                                       Dear Option Holder,

                                       The Directors of Charter Pacific Corporation Limited (ASX: CHF) advise that the
                                       CHFO options exercisable at $0.12 per option will expire at 5:00 pm (AEST) on 4
                                       February 2011.

                                       Pursuant to listing Rule 3.17 we have attached a Notice of Exercise of Options Form
                                       that has been sent to all CHFO option holders along with instructions on how to
                                       exercise your options.

                                       Charter Pacific Corporation Limited announced on 17 November 2010 that it
                                       has entered into an agreement to acquire an interest in two iron exploration
                                       permits in Mauritania in West Africa. A copy of the ASX release is attached for
                                       your information and is also available electronically on the Company’s web site
                                       at www.charpac.com.au.

                                       Charter Pacific Corporation Limited is currently undertaking its due diligence
                                       investigations and will advise the market of the outcome of those investigations as
                                       soon as possible.

                                       The Company also has significant investments in FarmWorks Australia Ltd (17.8%)
                                       and Monteray Group Ltd (40.7%). Full details of these and other investments are
                                       highlighted in the Company's web site.

                                       You are encouraged to read the attached documents carefully and if you are unsure
                                       as to whether or not to participate in the Exercise of Options, please consult your
                                       investment, financial, taxation or other professional adviser.

                                       If you have any questions on how to complete your Exercise of Options Form please
                                       contact the Company Secretary, Steven Cole, on telephone (07) 5538 2558.

                                       Yours faithfully,




     Level 18, 50 Cavill Avenue
Surfers Paradise Qld 4217, Australia   Kevin Dart
            P.O. Box 40
                                       Managing Director
Surfers Paradise Qld 4217, Australia

   Telephone: +61-7-5538 2558
   Facsimile: +61-7-5526 8922

   Internet: www.charpac.com.au
  Email: charpac@charpac.com.au
Level 18, 50 Cavill Avenue                                                                                                   PO Box 40
Surfers Paradise Qld 4217                                                                                    Surfers Paradise Qld 4217
                                                               CHARTER
Ph: 07 5538 2558                                                PACIFIC                                 Website: www.charpac.com.au
Fx: 07 5526 8922                                              Corporation Limited                      Email: charpac@charpac.com.au




                                                                       SRN/HIN:                      <SRN/HIN>
Name        OPTION HOLDER NAME                                         No of Options held
                                                                       as at 20 December 2010        <NO. OF OPTIONS>
Address     OPTION HOLDER ADDRESS                                      Conversion Rate               1 for 1
                                                                       Exercise price                $0.12
                                                                       Expiry Date                   4 February 2011
                                                                       ASX quotation ends            28 January 2011



                                      NOTICE OF EXERCISE OF OPTIONS
Charter Pacific Corporation Limited Shares (CHF) ASX quotation prices:

Closing price on 17 December 2010                             $0.10
3 month high before 20 December 2010                          $0.15 on 17 November 2010
3 month low before 20 December 2010                           $0.037 on 22 October 2010
Last date of quotation                                        28 January 2011

The exercise of the Options is not underwritten.

Please Complete Below (using block letters) – refer next page for details and further instructions on how to complete this form.

I/We apply to exercise the following number of options and make payment in Australian currency drawn on an Australian branch of
a financial institution for the amount payable. Please allot to me/us Ordinary Shares calculated on the basis of one (1) Ordinary
Share for every one (1) Option which I/we exercise. I/we agree to accept such Ordinary Shares subject to the Constitution of Charter
Pacific Corporation Limited.

PAYMENT
If paying by cheque, bank draft or money order complete and return the payment slip below with your payment. No signature is
required on the payment slip. The payment slip together with your payment must be received by the Company before 5:00pm
(AEST) on 4 February 2011.

     THIS IS A PERSONALISED FORM FOR THE SOLE USE OF THE OPTIONHOLDER AND HOLDING RECORDED ABOVE
------------------------------------------------------------------------------------------------------------------------
                                                   Please detach and enclose with payment


                                                                                    SRN/HIN <SRN/HIN>
A         Number of Options Exercised                                               B    Total Payment Required
          (Exercise all or part of CHFO Options)                                            (A$0.12 per CHFO Option exercised)

          __________________________                          at A$0.12 per                 A$_____________________________
                                                              Option exercised


C         Please Insert Cheque, Bank Draft or Money Order Details – Cheques, bank draft or money orders
          must be drawn on an Australian branch of a financial institution in Australian currency, made payable “Charter Pacific
          Corporation Limited” and crossed “Not Negotiable”.


_____________________                   __________            ________              ______________           A$________________
Drawer                                  Cheque No.            BSB No.               Account No.              Amount of cheque


D         Contact Details
( )________________                     ( )___________________                              _______________________________
Telephone No.                           Telephone No. – after hours                         Contact Name

___________________________________________________
Email Address
                         HOW TO COMPLETE THE NOTICE OF EXERCISE OF OPTIONS


Payment
Paying by Cheque, Bank Draft or Money Order

Please enter your cheque details in Section C.

Cheques, bank draft or money orders must be drawn on an Australian branch of a financial institution in Australian currency, made
payable “Charter Pacific Corporation Limited” and crossed “Not Negotiable”. Please ensure sufficient cleared funds are held in
your account, as your cheque will be banked as soon as it is received.

       A. Application for Ordinary Shares under the Notice of Exercise of Options
               You may exercise either part of, or all of, your Options holding. Please write in Box A the number of Options that you
               wish to exercise.

               If you do not indicate the number of Options you wish to exercise the Company will exercise as many Options as your
               accompanying cheque will pay for. The number of Options exercised, however, will not exceed the number of Options that
               you hold.

       B. Total Payment required for Options Exercise
               Please enter in Box B the total amount of the cheque required for the payment of the Options you wish to exercise at the
               Exercise Price of A$0.12 per Option.

       D. Contact Details
               Please enter your contact telephone number and email address so we can contact you regarding your notice, if necessary.

Consequence of non-payment
If a Notice of Exercise of Options and the required payment are not received before 5:00pm (AEST) on 4 February 2011, the Options
will automatically lapse and no longer be available for exercise.




----------------------------------------------------------------------------------------------------------------------------------------------------------------
How to Lodge the Notice of Exercise of Options

Mailing Address                                                             or                            Hand Delivery
Charter Pacific Corporation Limited                                                                       Charter Pacific Corporation Limited
PO Box 40                                                                                                 Level 18
Surfers Paradise Qld         4217                                                                         50 Cavill Avenue
                                                                                                          Surfers Paradise Qld         4217
                                                                                                          (Please do not use this address for mailing purposes)


Make sure you send your payment allowing sufficient time for mail delivery, so that Charter Pacific Corporation Limited receives
payment no later than 5:00pm (AEST) on 4 February 2011. Please ensure sufficient cleared funds are held in your account, as your
cheque will be banked as soon as it is received. Charter Pacific Corporation Limited reserves the right not to process any payment
slips received after this date.


           If you require information on how to complete this form please contact Charter Pacific Corporation Limited on
                               (07) 5538 2558, between 8:30am and 5:30pm (AEST) Monday to Friday.


If you are unsure as to whether or not to participate in the Exercise of Options, please consult your investment, financial, taxation or
other professional adviser.




Privacy Clause: Charter Pacific Corporation Limited advises that Chapter 2C of the Corporations Act 2001 requires information about you as a securityholder (including your name, address details of
the securities you hold) to be included in the public register of the entity in which you hold securities. Information is collected to administer your securityholding and if some or all of the information
is not collected then it might not be possible to administer your securityholding. Your personal information will be disclosed to the entity which conducts the Company’s share register. You can
obtain access to your personal information by contacting the Company’s share registry at Level 15, 324 Queen Street, Brisbane Qld 4000. Our privacy policy is available on our website
(www.charpac.com.au) and the Company’s share registry’s privacy policy is available on their website (www.linkmarketservices.com.au).
       CHARTER                         17 November, 2010
        PACIFIC
     Corporation Limited

         A.B.N. 12 003 344 287

                                                      CHARTER PACIFIC CORPORATION LIMITED
                                                          TO ACQUIRE UP TO 100% INTEREST IN
                                               MAURITANIAN IRON ORE EXPLORATION PROJECTS




                                       Charter Pacific Corporation Limited ("Charter Pacific") (ASX:CHF), a diversified investment
                                       company listed on ASX Limited is pleased to announce that it has entered into an agreement to
                                       acquire an interest in two iron ore exploration permits in Mauritania ("Projects") .

                                       Charter Pacific has entered into an agreement with Sonko Lowenthal Mauritanie sarl ("Sonko"), a
                                       company incorporated in Mauritania, and the shareholders of Sonko for the potential acquisition of
                                       up to 100% interest in Sonko’s two Mauritanian iron ore exploration permits subject to certain
                                       conditions and obligations ("Agreement").

                                       The Agreement is structured to enable Charter Pacific to acquire up to a 51% interest in the
                                       Projects via a shareholding in Sonko subject to commencing drilling activities and meeting various
                                       periodic payments to Sonko or the shareholders of Sonko. Charter Pacific will then have the option
                                       to acquire up to a 100% interest in the Projects through the acquisition of the remaining interests.

                                       Charter Pacific Managing Director Kevin Dart said: “This is a strategic initiative by Charter Pacific
                                       in line with our stated objectives. The iron ore sector is experiencing strong growth, with major
                                       players around the globe looking to secure the land and the rights to mine for iron ore reserves as
                                       demand and commodity prices strengthen. We look forward to working with our partners in
                                       Mauritania as we undertake the next stage of our due diligence process.”

                                       The Projects
                                       •      Projects adjacent to iron ore tenements held by Sphere Minerals Ltd and TransAfrika
                                              Resources Ltd.
                                       •      The Mauritanian government fully supports the development of the country's iron ore
                                              assets.
                                       •      Established rail and port infrastructure facilities.
                                       •      The Projects are located in the Inchiri district of western Mauritania (Figure 1) covering an
                                              area of approximately 1,458km2. Exploration licences for iron ore Cetal (791) and
                                              Kaoua EI Khadhra (792) are considered prospective for magnetite-quartzite deposits within
                                              banded iron formations ("BIF").

                                       Cetal (791)
                                       •       Cetal, the northern project of some 498km2, is located less than 70km south of heavy gauge
                                               rail and road infrastructure and a further 180km east, by rail, of the port of Nouadhibou. It
                                               lies immediately north and along strike of the eastern most of the two exploration licences
                                               of the Lebtheinia iron ore project owned by Sphere Minerals Ltd (ASX:SPH). Sphere has
                                               reported a combined JORC mineral resource of 2.74Bt (2.18Bt indicated and 560Mt
     Level 18, 50 Cavill Avenue                inferred) (ASX:22 October 2009) from its central deposit located 30km west of the
Surfers Paradise Qld 4217, Australia
                                               Company's northern project. Sphere is currently subject to take over activity by Xstrata plc
            P.O. Box 40                        (ASX:12 November 2010).
Surfers Paradise Qld 4217, Australia

   Telephone: +61-7-5538 2558
   Facsimile: +61-7-5526 8922

   Internet: www.charpac.com.au
  Email: charpac@charpac.com.au
                          Page 2


 CHARTER                  Kaoua EI Khadhra (792)
                          •     Kaoua EI Khadhra, the southern project of some 960km2, is 250km northeast of the capital,
  PACIFIC                       Nouakchott, by paved road. It is located a short distance from the copper-gold mining
Corporation Limited
                                operations at Guelb Moghrein and the district capital of Akjoujt. This permit is adjacent to
  A.B.N. 12 003 344 287         TransAfrika Resources Ltd tenements.
                          •     The rail and port infrastructure supports iron ore exports from a number of mines owned
                                and operated by Societe Nationale Industrielle et Miniere ("SNIM"). SNIM, 78% owned by
                                the Mauritanian government, is the world's 7th largest exporter of iron ore with production
                                expected to double following an expansion of its rail capacity and the construction of a
                                second dedicated port berth facility.
                          •     The Mauritanian government is committed to resources projects and fully supports the
                                development of the country's iron ore assets.




                          Figure 1: Mauritania map showing location of Projects with major infrastructure noted.


                          Summary of the Transaction
                          The Company has entered into the Agreement to acquire up to a 100% shareholding in Sonko (or
                          alternatively, a 100% shareholding in companies to be incorporated by Sonko which will hold the
                          Projects). Sonko is the holder of the Cetal and Kaoua EI Khadhra iron ore exploration licences.

                          The Company paid to Sonko a non-refundable fee of US$25,000 on execution of the Agreement
                          and will pay a further non-refundable option fee of US$125,000 to either Sonko or the shareholders
                          of Sonko upon the Company completing, to its satisfaction, technical and legal due diligence
                          investigations on Sonko and the Projects.

                          Subject to satisfactory outcome of the legal and technical due diligence to be conducted during the
                          option, and the transfer of the Projects to the newly incorporated companies or failing the transfer
                          of the Projects to the newly incorporated companies within 90 days, the Company may acquire an
                          initial 51% of the issued capital of Sonko (or if applicable the newly incorporated companies) by
                          way of the following payments:
Page 3


•        3 months after the first mobilisation of drill equipment to the Projects a payment of
         US$250,000 (“First Milestone”); and
•        3 months following the above period of time a further payment of US$250,000 (for a total
         of US$500,000) (“Second Milestone”) ("the Consideration").

Should a JORC compliant inferred resource of 500Mt of iron ore, at an average grade of 30% Fe
(or such average grade that contains the equivalent amount of iron) be determined prior to the
expiration of the Second Milestone, any unpaid portion of the Consideration immediately becomes
due and payable.

Upon the Company completing the acquisition of 51% of the shares in Sonko (or if applicable, the
newly incorporated companies) the Company has the option to acquire a further 24% shareholding
in Sonko (or the newly incorporated companies) (for a total of 75%) through the payment of
US$5,000,000 to Sonko or its shareholders. Upon attaining 51% of Sonko (or if applicable, the
newly incorporated companies) Charter Pacific will have a majority of directors on the relevant
board of directors.

The Company has a further option to acquire the outstanding 25% shareholding in Sonko (or if
applicable, the newly incorporated companies) (for a total of 100%) through the payment to Sonko
or the shareholders of Sonko of an amount to be agreed between the parties and grant to Sonko a
US$0.15 per tonne royalty for all product shipped from the Projects.

If the parties fail to reach agreement on the amount to be paid for the transfer of the remaining 25%
of the shares in Sonko (or the newly incorporated companies), the amount shall be determined by
an independent third party expert to be appointed by the parties.

A decision by the Company to proceed is conditional on, amongst other things, the completion of
due diligence and the obtaining of all necessary regulatory approvals.

Based on the Company’s last audited financial statements and assuming no significant change in
value of the other current and future investments of the Company, should the Company exercise its
option to increase its holding from 51% to 75% of Sonko (or if applicable, the newly incorporated
companies) and pay US$5,000,000 to Sonko (or its shareholders, if applicable) exercising the
option will be subject to the Company seeking its shareholders’ approval in accordance with ASX
Listing Rule 11.1.2 and a notice of meeting in respect to the approval will be circulated to
shareholders at that time. If shareholders approve the exercise of the option, trading in the
Company’s securities will be suspended until the requirements of Chapters 1 and 2 of the ASX
Listing Rules have been satisfied. Attached at Annexure A is a proforma balance sheet based on
the last audited accounts of the Company as at 30 June 2010 including the exercise of options to
take the Company’s interest in Sonko (or if applicable, the newly incorporated companies) to 75%.

Mauritania
A meeting point of desert and sea, Mauritania is a multicultural country with a population of 3
million inhabitants mainly concentrated in the western part of the country, coming up to a global
population density of 3 inhabitants per square kilometre.

Mauritania is among the “large” countries of the African continent, with an area of more than one
million square kilometres (1,085,000km2). It is bound by Western Sahara, Morocco and Algeria in
the north, Mali in the east and south, Senegal in the south-east and the Atlantic Ocean in the west.
Nouakchott is the capital and has one of the two international airports of the country, the other
being Nouadhibou.

Most of the territory is covered by sediments, rock debris (regs) and sandy deposits (dunes). Here
and there, shallow rock massifs – usually tabular – stand out, dismantled by intensive Aeolian
erosion.
                          Page 4


 CHARTER                  The official language is Arabic; French is the working language. Arabic and French are widely
                          used as communication and exchange languages. The educational system is based on the teaching
  PACIFIC                 of both these languages. The President is democratically elected by popular vote to a six-year term
Corporation Limited
                          and the Prime Minister is appointed by the President. The legislature is a bicameral legislature
  A.B.N. 12 003 344 287   which consists of the Senate and the National Assembly.

                          Mining Law in Mauritania
                          Mauritania adopted a legal and tax operational framework for mineral research and exploitation
                          activities which is deemed to be among the most competitive internationally. It is ruled by the
                          following codes:
                          •        The Investment Code, including substantial legal rights and incentives granted to national
                                   and foreign investors in a non-discriminatory way;
                          •        The Mining Code and its enforcement texts offering competitive incentives for the mining
                                   title holders: tax exemption during the exploration phase and the initial 3 years of
                                   exploitation, plus guarantee of the stability of the taxation regime and low royalty rate;
                          •        The Model Mining Convention which supplements the Mining Code and protects further
                                   the investors with its guaranteed stability of the taxation regime during exploitation over a
                                   30 year period;

                          Iron Ore Exports and SNIM
                          The mining sector contributes 12% GDP to the Mauritanian economy mainly due to iron ore
                          mining. SNIM and the government recognise the potential for iron ore mining in Mauritania to
                          expand through participation of foreign companies. This should enable the country to benefit from
                          increased exploitation of its iron ore deposits.

                          SNIM is a well established iron ore exporter and ranks 7th globally in terms of its iron ore exports
                          which run at 12Mtpa from its existing mines in the north of Mauritania. Iron ore is railed on
                          SNIM's purpose built heavy gauge rail line to the dedicated port of Nouiidhibou on the Atlantic
                          coast. SNIM has secured financing to expand the rail capacity to 25Mtpa and build a second port
                          berth.

                          Advisors
                          Ventnor Capital Pty Ltd has acted as corporate advisor to the Company in this transaction. Ventnor
                          Capital specialises in the provision of corporate advice to the junior resources sector.

                          Mr Brian Thomas acted as technical advisor to the Board of Charter Pacific. Mr Thomas is a
                          geologist and mineral economist with extensive experience with small to mid-sized publicly listed
                          ASX resources companies.

                          Yours faithfully,




                          Kevin Dart
                          Managing Director

                          Contacts:
                          Kirkwoods Corporate Relations                 Charter Pacific Corporation Limited
                          Justin Kirkwood                               Kevin Dart            Sandy Barblett
                          +61 2 9231 5600                               Managing Director Chief Operating Officer
                          +61 411 251 324                               07 5538 2558          02 9227 5794

                          About Charter Pacific
                          Charter Pacific is a diversified investment company listed on the ASX (ASX:CHF). Our investment
                          strategy is to invest in listed or unlisted companies in growth sectors that will generate superior
                          returns over the long term. Charter Pacific’s investments focus is in the mining and resources,
                          agribusiness, industrial and financial services sectors.
ANNEXURE A (of 2 pages)

        Proforma Balance of Charter Pacific Corporation Ltd
        based on audit financial statements as at 30 June 2010
        including payments take interest in Mauritania project to 75% equity

                                                                NOTES CONSOLIDATED              PROFORMA
                                                                          2010                   B/SHEET
                                                                            $                       $
        ASSETS
        Cash and cash equivalents                                  I            5,150,088          362,920
        Trade and other receivables                                               151,216          151,216
        Prepayments                                                                90,144           90,144
        Investments                                                2            1,597,034           97,034

        Total current assets                                                    6,988,482          701,314

        Investments in equity accounted investees                  3                 -            6,650,000
        Investments                                                              868,866            868,866
        Other receivables                                          4             362,832                -
        Plant and equipment                                                      391,187            391,187
        Intangibles                                                                  -                  -

        Total non–current assets                                                1,622,885         7,910,053

        Total assets                                                            8,611,367         8,611,367

        LIABILITIES
        Trade and other payables                                                 239,594           239,594
        Loans and borrowings                                                      81,408            81,408
        Employee benefits                                                        724,868           724,868

        Total current liabilities                                               1,045,870         1,045,870

        Loans and borrowings                                                     110,687           110,687
        Employee benefits                                                        420,976           420,976

        Total non–current liabilities                                            531,663           531,663

        Total liabilities                                                       1,577,533         1,577,533

        NET ASSETS                                                              7,033,834         7,033,834

        EQUITY
        Issued capital                                                         23,169,451        23,169,451
        Reserves                                                                1,434,339         1,434,339
        Retained earnings (accumulated losses)                         -       17,569,956   -    17,569,956
        TOTAL EQUITY                                                            7,033,834         7,033,834
Notes to the Proforma Balance of Charter Pacific Corporation Ltd
Note 1 Cash on hand                                                     5,150,088
         Receipt of receivables                                           362,832
         Receipt of cash from investments                               1,500,000
         Payment of option fee for Mauritania project               -     150,000
         Payment of 1st milestone for Mauritania project            -     250,000
         Payment of 2nd milestone for Mauritania project            -     250,000
         Payment of drilling program costs for Mauritania project   -   1,000,000
         Payment to go to 75% equity in Mauritania project          -   5,000,000
                                                                         362,920

Note 2   Receipt of cash from investments                               1,500,000

Note 3   Investment in Mauritania project
         Option fee                                                       150,000
         1st milestone for Mauritania project                             250,000
         2nd milestone for Mauritania project                             250,000
         Payment of drilling program costs for Mauritania project       1,000,000
         Payment to go to 75% equity in Mauritania project              5,000,000
                                                                        6,650,000

Note 4   Receipt of cash from other receivables                          362,832