PhosCan Chemical Announces Results for Quarter Ended July 31, 2008

Market Wire, September, 2008

(All dollar amounts are expressed in Canadian currency unless otherwise noted.)

PhosCan Chemical Corp. (TSX VENTURE: FOS) announces its financial and operating results for the quarter ended July 31, 2008.

Highlights for the quarter include:

- Preliminary Feasibility Study on the Martison Phosphate Project completed and an N.I. 43-101 compliant technical report filed

- Private placement of 29 million common shares at $1.90 per share completed to raise gross proceeds of $55.1 million

- Continued advancement of the Martison Project with ongoing work on a Feasibility Study, environmental permitting and stakeholder agreements

Subsequent to July 31, 2008, PhosCan announced the following developments:

- Ian Pritchard appointed as Executive Vice President, Operations and Projects

- Shareholders rights plan adopted by Board of Directors

Financial Results

PhosCan reported a net loss for the three months ended July 31, 2008 of $832,574 compared to a net loss for the same period during the previous year of $226,951. The increase in net loss of $605,623 was primarily due to a $316,183 increase in stock option compensation expense and a $285,115 increase in general and administrative expense.

The increase in stock option compensation expense of $316,183 during the three months ended July 31, 2008 compared to the same period during the previous year was primarily due to the vesting of a portion of 2,890,000 stock options granted to new and existing directors, officers and employees of the Company on March 14, 2008 at an exercise price of $1.25 per common share.

General and administrative expense increased by $285,115 during the three months ended July 31, 2008 compared to the same period during the previous year due to increased levels of corporate and Martison Project development activity.

Cash and cash equivalents increased by $52,084,850 during the current period. At July 31, 2008, PhosCan had working capital of $79,386,839 versus $31,642,631 at January 31, 2008. The increases were primarily due to a private placement completed by PhosCan on June 17, 2008 to raise gross proceeds of $55,100,000.

Capitalized expenditures on the Martison Project were $78,377,301 at July 31, 2008, an increase of $73,646,980 from January 31, 2008. The increase is primarily due to the acquisition of the remaining 50% interest in the Martison Project. The pre-tax fair value of the 50% interest in the Martison Project acquired by PhosCan was $70,378,177.

A future income tax liability of $18,605,698 was recorded on the acquisition of the remaining 50% interest in the Martison Project as a result of the fair value of Baltic's 50% interest in the Martison Project being greater than the carry-forward tax value. This has been recorded as a non-current liability on the Company's balance sheet as at July 31, 2008.

PhosCan had no long-term debt at July 31, 2008 and has met all of its financial obligations. The Company expects that existing working capital, together with the net proceeds of the private placement completed on June 17, 2008, will be sufficient to complete a Feasibility Study on the Martison Project and certain critical path activities related to the development of the Martison Project. The Feasibility Study commenced during the winter of 2008 with an extensive field program and is expected to be complete in 2010, at which time (assuming that the results of the study are positive) the Company would begin construction of the Martison Project. The Company will be required to raise a significant amount of additional funds to construct the Martison Project and will investigate various financing options.

Operating Results

During and subsequent to the quarter ended July 31, 2008, management and the Board of PhosCan continued to strengthen the Company and advance the development of the Martison Project. PhosCan completed the Preliminary Feasibility Study on the Martison Project; completed a private placement financing to raise gross proceeds of $55,100,000; continued work on the Feasibility Study, environmental permitting and stakeholder agreements; and appointed Ian Pritchard as Executive Vice President, Operations and Projects.

On May 28, 2008, PhosCan received the results of a Preliminary Feasibility Study on the Martison Project. Jacobs Engineering Inc., the independent consulting firm which compiled the Preliminary Feasibility Study, concluded that, given the results of the study, including robust financial results from an economic analysis of the project, PhosCan should proceed immediately with the Feasibility Study of the Martison Project.

The results of the Preliminary Feasibility Study are detailed in a press release dated May 28, 2008 and the complete Preliminary Feasibility Study is summarized in an N.I. 43-101 compliant technical report entitled "Martison Phosphate Project Preliminary Feasibility Study" dated May 16, 2008, which is available on SEDAR ( www.sedar.com ) and on PhosCan's website at www.phoscan.ca .

On September 24, 2008, PhosCan announced that the Board of Directors had approved the adoption of a Shareholders Rights Plan. The purpose of the Plan is to provide shareholders and the Board of Directors with additional time to assess and evaluate any unsolicited bid for the Company, and to provide the Board with adequate time to identify, develop and negotiate alternatives to any unsolicited bid in order to maximize shareholder value. The Plan is not intended to block takeover bids for the Company that treat shareholders fairly and is not being adopted in response to any proposal to acquire control of the Company.