Chatham Rock Phosphate Private Placement

NEWS RELEASE 17-15                                                                             June 13, 2017

CHATHAM ROCK PHOSPHATE LIMITED PRIVATE PLACEMENT

 WELLINGTON New Zealand – Chatham Rock Phosphate Limited (TSXV: “NZP” and NZAX: “CRP” or the “Company") is pleased to announce a non-brokered private placement of up to 900,000 units (the “Units”) at a price of CAD$0.50 per Unit for gross proceeds of up to CAD$450,000.  Each Unit will consist of one common share in the capital of the Company and one-half of one non-transferable share purchase warrant (“Warrant”).  Each whole Warrant will entitle the holder thereof to acquire one common share at a price of CAD$1.00 per share at any time prior to the date that is two years from the date of issuance.  In the event that the common shares of the Company trade on the TSX Venture Exchange at a closing price of greater than CAD$1.20 per common share for a period of 20 consecutive trading days at any time after four months and one day after the closing date of the private placement, the Company may accelerate the expiry date of the Warrants by giving notice to the holders thereof by way of a news release and in such case the Warrants will expire on the 30th day after the date of dissemination of the news release.  The proceeds of this placement will be used for general working capital purposes.  There will be a finders’ fee payable in cash to arm’s length parties in connection with this placement as permitted under the policies of the TSX Venture Exchange.  The private placement is subject to the acceptance by the TSX Venture Exchange.

 

For further information please contact

Chris Castle
President and Chief Executive Officer
Chatham Rock Phosphate Limited
64 21 55 81 85 or chris@crpl.co.nz

Neither the Exchange, its Regulation Service Provider (as that term is defined under the policies of the Exchange), or New Zealand Exchange Limited has in any way passed upon the merits of the Transaction and associated transactions, and has neither approved nor disapproved of the contents of this press release.

 

 

CRP Appoints Two New Directors

NEWS RELEASE 17-14                                                                                              June 7, 2017

 CHATHAM ROCK PHOSPHATE LIMITED APPOINTS TWO NEW DIRECTORS

 WELLINGTON New Zealand – Chatham Rock Phosphate Limited (TSXV: “NZP” and NZAX: “CRP” or

the “Company") today announced that it has appointed two new independent non-executive directors, Ernst Schönbächler and Ryan Wong to its board.

Managing Director Chris Castle said both incoming directors brought significant business experience in different realms and added to the board’s diverse international perspective.

Mr Schönbächler has more than 40 years of experience in the banking industry and is presently Managing Director of SwissGold Exploration AG, a wholly owned subsidiary of TSX-V listed NV Gold Corporation of Vancouver. Since 2004 he has been an independent financial consultant working with various public and private companies.

He has been a board member for several public and private companies in Canada, the United States, Luxemburg and Switzerland and also has a strong background in capital markets and venture capital, especially in Asia.

Mr Wong, who holds a Master’s degree in civil and structural engineering, holds a board and senior executive management role with the Caldecott Group of companies based in Malaysia.  Caldecott is primarily involved in property development and construction but has diverse investments in hospitality, recreation and mining. He has been with the Caldecott Group for more than 15 years.

Mr Wong is a member of the Institute of Directors NZ, the Association of Petroleum and Explosives Administration UK and the Association of International Petroleum Negotiators.

For further information please contact

Chris Castle
Chief Executive Officer
Chatham Rock Phosphate Limited
64 21 55 81 85 or chris@crpl.co.nz

Neither the Exchange, its Regulation Service Provider (as that term is defined under the policies of the Exchange), or New Zealand Exchange Limited has in any way passed upon the merits of the Transaction and associated transactions, and has neither approved nor disapproved of the contents of this press release.

Chatham announces lifting of management cease trade order

NEWS RELEASE 17-13                                                                                             

CHATHAM ANNOUNCES LIFTING OF MANAGEMENT CEASE TRADE ORDER

 WELLINGTON New Zealand – Chatham Rock Phosphate Limited (TSXV: “NZP” and NZAX: “CRP” or the “Company") is pleased to announce that, further to the press releases dated April 26 and May 10, 2017, the management cease trade order received from the British Columbia Securities Commission on May 2, 2017, was lifted effective May 25, 2017, following the filing of the Company’s audited annual consolidated financial statements, management's discussion and analysis and the related officer certifications for the year ended December 31, 2016 on SEDAR effective May 24, 2017.

For additional information contact:

Chris Castle
Chief Executive Officer
Chatham Rock Phosphate Limited
Email: chris@crpl.co.nz
Cell: +64 21 558 185
Skype: phosphateking
www.rockphosphate.co.nz

Media Coverage: Another halted phosphate shipment highlights NZ supply risk

Scoop.co.nz released the following article. To read in it's original form click here

Article Text: 

Another halted phosphate shipment highlights NZ supply risk

9:18 May 22, 2017

Press Release – Chatham Rock Phosphate

WELLINGTON New Zealand Chatham Rock Phosphate Limited (TSXV: NZP and NZAX: CRP or the Company”) notes the halting of a second phosphate shipment from the Western Sahara is intensifying the supply risk for New Zealand farmers. …Chatham says another halted phosphate shipment highlights NZ supply risk

WELLINGTON New Zealand – Chatham Rock Phosphate Limited (TSXV: “NZP” and NZAX: “CRP” or the “Company”) notes the halting of a second phosphate shipment from the Western Sahara is intensifying the supply risk for New Zealand farmers.

Chatham Chief Executive Chris Castle said today the need for New Zealand to secure its own low cadmium and ethical phosphate resource is highlighted by news Panama authorities have detained Moroccan phosphate shipment from the Western Sahara after the Polisario independence movement claimed the cargo had been transported illegally.

The detention of the vessel carrying phosphate rock cargo from Morocco’s OCP for Canada’s Agrium is the second tanker stopped this month by a Polisario legal challenge, a new tactic the independence movement has been using in its conflict with Morocco. The first shipment was detained in South Africa.

Western Sahara has been disputed since 1975, when Morocco claimed it as part of the kingdom and the Polisario fought a guerrilla war for the Sahrawi people’s independence.

Both New Zealand fertiliser manufacturers source a large part of their phosphate rock supply from that area, so the implications for farmers and the economically important agriculture sector are serious.

Mr Castle said the company’s Chatham Rise resource is not only an ethical source but it also has among the lowest known levels of cadmium.

“New Zealand needs to use its own source of ethically-produced, environmentally-friendly phosphate rock rather than importing product from a disputed territory.

“Phosphate is essential for the production of food and we can’t afford supply disruptions. This underlines the strategic value of our deposit.

Mr Castle said Chatham’s product is also better for the environment as it binds to the soil and dramatically reduces run-off to waterways.

He said the rock from Morocco is used to make New Zealand’s predominant fertiliser superphosphate, which results in high levels of run-off with resulting pollution to our waterways and can also be detrimental to soil health over the long term.

“The solution to supply and environmental problems is the use of Chatham rock phosphate as an organic direct application fertiliser not processed with chemicals.

“We can deliver a secure and sustainable local supply of low-cadmium phosphate that will also reduce fertiliser run-off into waterways, produce healthier soils and shrink fertiliser needs over time,” Mr Castle said.

The Chatham Rise resource represents one of New Zealand’s more valuable mineral assets and is of huge strategic significance because phosphate is essential to maintain high agricultural productivity.

Chatham proposes to extract up to 1.5 million tonnes a year of phosphate nodules from the top half metre of sand on identified parts of an 820km2 area on the Chatham Rise, 450km off the west coast of New Zealand, in waters of 400m.

“Our environmental consenting process has established and independently verified that extraction would have no material impact on fishing yields or profitability, marine mammals or seabirds.”

ends

Chatham says another halted phosphate shipment highlights NZ supply risk

NEWS RELEASE 17-12                                                                                                   

Chatham says another halted phosphate shipment highlights NZ supply risk

 WELLINGTON New Zealand – Chatham Rock Phosphate Limited (TSXV: “NZP” and NZAX: “CRP” or the “Company") notes the halting of a second phosphate shipment from the Western Sahara is intensifying the supply risk for New Zealand farmers.

Chatham Chief Executive Chris Castle said today the need for New Zealand to secure its own low cadmium and ethical phosphate resource is highlighted by news Panama authorities have detained Moroccan phosphate shipment from the Western Sahara after the Polisario independence movement claimed the cargo had been transported illegally.

The detention of the vessel carrying phosphate rock cargo from Morocco's OCP for Canada's Agrium is the second tanker stopped this month by a Polisario legal challenge, a new tactic the independence movement has been using in its conflict with Morocco.  The first shipment was detained in South Africa. 

Western Sahara has been disputed since 1975, when Morocco claimed it as part of the kingdom and the Polisario fought a guerrilla war for the Sahrawi people's independence.

Both New Zealand fertiliser manufacturers source a large part of their phosphate rock supply from that area, so the implications for farmers and the economically important agriculture sector are serious.

Mr Castle said the company’s Chatham Rise resource is not only an ethical source but it also has among the lowest known levels of cadmium. 

“New Zealand needs to use its own source of ethically-produced, environmentally-friendly phosphate rock rather than importing product from a disputed territory.

“Phosphate is essential for the production of food and we can’t afford supply disruptions.  This underlines the strategic value of our deposit.

Mr Castle said Chatham’s product is also better for the environment as it binds to the soil and dramatically reduces run-off to waterways.

He said the rock from Morocco is used to make New Zealand’s predominant fertiliser superphosphate, which results in high levels of run-off with resulting pollution to our waterways and can also be detrimental to soil health over the long term.

“The solution to supply and environmental problems is the use of Chatham rock phosphate as an organic direct application fertiliser not processed with chemicals.

“We can deliver a secure and sustainable local supply of low-cadmium phosphate that will also reduce fertiliser run-off into waterways, produce healthier soils and shrink fertiliser needs over time,” Mr Castle said.

The Chatham Rise resource represents one of New Zealand’s more valuable mineral assets and is of huge strategic significance because phosphate is essential to maintain high agricultural productivity.

Chatham proposes to extract up to 1.5 million tonnes a year of phosphate nodules from the top half metre of sand on identified parts of an 820km2 area on the Chatham Rise, 450km off the west coast of New Zealand, in waters of 400m.

“Our environmental consenting process has established and independently verified that extraction would have no material impact on fishing yields or profitability, marine mammals or seabirds.”

 Chris Castle – +64 21 55 81 85 or chris@widespread.co.nz

 

About Chatham Rock Phosphate

Chatham Rock Phosphate, a publicly listed company, was granted a mining permit in 2013 to develop New Zealand’s only significant source of environmentally friendly pastoral phosphate fertiliser and is now preparing for a revised environmental consent application.

 Local and international investors have contributed more than $37 million to develop the project’s financial viability, environmental benefits and impacts, technical and logistical requirements, local and international product uses.

In progressing plans to submit a new application we are working with government officials to seek improvement in the permitting process and iwi, academic, industry and central government input to ensure New Zealand can benefit from an environmentally superior phosphate source.

Chatham is listed on NZAX, the Toronto Stock Exchange and in Frankfurt. These multiple listings provide a more useful share-trading platform for overseas shareholders and facilitate the capital raising needed for the consenting process and beyond.

Neither the Exchange, its Regulation Service Provider (as that term is defined under the policies of the Exchange), or New Zealand Exchange Limited has in any way passed upon the merits of the Transaction and associated transactions, and has neither approved nor disapproved of the contents of this press release.

 

Media Coverage: Going to the ends of the Earth for phosphate

Exponential Investor released the following article. To read it in its original form, click here.

ARTICLE TEXT:

Going to the ends of the Earth for phosphate

18TH MAY 2017

ANDREW LOCKLEY

Today, we’re focusing on commodities again – because they’re an essential investment story. But, before you read the article, please do check out our special commodities report. It won’t be appearing in Exponential Investor – so you’ll have to read it online. It’s all about “white diesel”, and you can get it here.

Today, we’re talking about a commodity we’ve covered before in Exponential Investor: phosphate. It’s a crucial story – both for investment, and for the future of humanity. Phosphate is different from the other major fertilisers, as it’s in limited supply. More worryingly, this supply is highly concentrated in just a few countries – such as Western Sahara. This gives producer countries the opportunity to form a cartel – enabling them to cut supply, to spike prices. This was the trick Opec pulled in the 1970s, and it lead to the oil crisis. If that happened with phosphate, we’d be in the grip of a new global oligarchy. That new world order would bring a global famine – one which would likely kill millions.

You might think that’s a far-off prospect – but there are already signs of trouble. Recently, Western Sahara seized a phosphate-carrying ship in South Africa. This was because of a legal dispute over the mineral rights.

We desperately need new sources of phosphate – ideally large ones, in politically-stable countries. Today, we’re talking to a man with access to just such resources. His mine is in quite an unexpected place. Not only is it as far as you can get from the UK (it’s in New Zealand) – but it’s also in a surprisingly-inaccessible location.

As regular readers of Exponential Investor may already have guessed, it’s at the bottom of the sea. Without further ado, I’ll hand you over to Chris Castle, chief executive of Chatham Rock Phosphate. He’ll be telling you how we’ll keep food on your children’s plates, in coming decades.

AL: Hi Chris. Can you start off by giving me some initial idea of the scope of seabed mining?

CC: Extraction of seabed phosphate is planned in places as diverse as offshore New Zealand, Mexico and Namibia.

These projects are currently undergoing permitting. In future, they will have the ability to help offset the vulnerability to economic and political events in the six countries controlling 98% of the world’s phosphate reserves. 85% of this total is in Morocco.

AL: Why are these resources being developed?

CC: Undeniably these are attractive investments. As an example, we can consider the Chatham Rise project being developed by Chatham Rock Phosphate – that’s a firm I’m a founder of.

A key reason for the strong profitability is the location of the resource close to New Zealand – meaning no incoming freight costs. Extraction costs equate to that of shipping phosphate from the other side of the world, so the international price has to collapse to near zero before the company can’t compete. Companies are therefore obviously looking for new sources of phosphate closer to home, that don’t involve such huge transport costs.

Furthermore, everyone’s mindful of the potential for supply disruption – so having control over resources is important. Additionally, companies need material which is clean, in terms of toxicity. The Pacific has limited supplies of phosphate and New Zealand imports all of its requirements – mostly from Morocco.

Investors have other areas of focus as well. Some are excited by the “frontier” concept of deep-sea mining. Some like the fact that Chatham’s product offers environmental benefits – something not usually associated with mining projects.

Others see the importance of reducing the reliance on such a heavy domination of resources by a few countries in politically-unstable areas. It is worth noting other countries with their own resources, such as the United States and China, have restricted exports – recognising the strategic nature of phosphate.

AL: Tell me about the ship carrying rock phosphate that was seized recently in South Africa.

CC: This is really quite interesting! It relates to rock phosphate shipments, by the Moroccan company OCP. These come from its mines in the Western Sahara. The Western Sahara has been under armed occupation by Morocco since 1975. Despite this, the trade has continued – despite the 1991 commitment of the United Nations to ensure Western Sahara benefits from self-determination.

In early May, the Western Sahara liberation movement announced the interception and detention of a shipment of phosphate rock exported from Western Sahara. This was done through legal means, in South Africa. The ship had been destined for a New Zealand importer. As both New Zealand fertiliser manufacturers source most of their phosphate rock from the same source, the implications for New Zealand farmers and the agriculture sector (the backbone of our economy) are potentially serious.

This is just the sort of supply disruption that we thought might happen. It underlines the strategic value of our deposit. Additionally, our mineral also has significantly lower levels of cadmium than the rock phosphate coming from the mines in the Western Sahara. To put it in a nutshell, Chatham offers a secure, ultra-low cadmium alternative supply of rock phosphate – with no associated ethical baggage.

AL: How important is seabed mining for the future of the world’s resource dependency?

CC: While there are significant land-based phosphate resources, they are controlled by a small number of countries, including disputed territories. So there is a strong motivation to develop alternative sources. Phosphate is also a bulky product to transport, so if resources can be located closer to where they will be used, that vastly improves the financials of such projects.

Other ocean resource projects include copper, gold and other minerals. These are contained in massive sulphides in the mid-Pacific, alluvial gold reserves that have washed into New Zealand harbours, and iron ore in seabed sands off the west coast of New Zealand.

Just as sustainable fish farming is becoming an important alternative to harvesting wild fish, untapped mineral resources within the world’s seas will rapidly become important. It will play a part in meeting the demands of a world whose population is forecast to reach 9.6 billion by 2050, with an increasing proportion achieving a 21st century lifestyle.

The amount of arable land available to grow food for the increased world population is dramatically reducing due to urban spread and the loss of soil into stream and rivers. At the same time global food production will need to increase over the next 35 years by 70%. So the remaining land needs to become more productive. At the same time, more intensive land use is causing deforestation and reduced biodiversity, soil erosion, depletion and pollution, flooding and water pollution, and food contamination.

As land-based resources become harder to extract, seabed mining becomes more attractive. For example the economics of the Chatham Rise phosphate resource stack up well ahead of remote on-land resources, which are usually located well away from road or rail facilities. This means they require extensive infrastructure to bring them to market.

One of the key attractions of seabed activities is the infrastructure is portable (on ships) and so once the extraction is complete, it sails away, with no physical evidence remaining. That also benefits the financials, as the infrastructure can be repurposed for other projects. In addition, seabed mining projects are generally well away from human populations.

Marine technology is rapidly advancing. Over centuries, Europe’s lowland countries have developed expertise to protect their borders from sea encroachment. They are using that technology and knowledge for projects as diverse as building islands in the Middle East, removing toxic waste from US river soils, and widening canals to improve access to some of the world’s most famous shipping channels.

AL: Will marine mining solve resource shortages in the long term?

CC: No resource is endless and few are fully sustainable. Resources need to be carefully extracted and managed. But human endeavour continues to source and repurpose resources. For example, a generation after the 1970s oil shocks, the world has found large new oil reserves. These include shale oil, and undersea reserves. Furthermore, industry is now finding alternative sustainable energy sources, to reduce dependence on traditional sources.

AL: Returning to the particular resource we discussed earlier, can you talk in more detail about what you’re planning on mining?

CC: The phosphate deposit was formed in nodules on the Chatham Rise. It’s about 450km east of New Zealand, and lies in a half-metre layer on the seabed. It’s in water that’s 400m deep. This was laid down millions of years ago, and discovered in 1952 by New Zealand scientists.

Over the following four decades, public and private sector experts identified the potential for decades of supply of phosphate to nourish New Zealand farms.

Chatham became the current custodian of this resource when world phosphate prices soared in the mid-2000s. The Chatham business case is based on a resource with an estimated worth of $5 to $7 billion, making it one of New Zealand’s most valuable mineral assets and of huge strategic significance because of the country’s heavy reliance on agriculture.

Three people closely associated with the project (a director, our COO and a key adviser) were involved in scientific research for the project in the 1970s and 80s. As founder, I want to see a natural product from the ocean used to environmentally benefit New Zealand’s most important industry. I think the project has tremendous financial potential, but I’m also excited by the prospect of seeing technical innovation in action.

My background is in investment and capital raising, primarily in the mining sector, but my main motivation with this project is in being able to harness that environmental, technical and financial potential.

In 2013, after a detailed evaluation, Chatham gained a 20-year mining permit covering 820km2. It is now developing plans to renew its application for an environmental consent in 2017. Iron ore seabed miner Trans-Tasman Resources has just resubmitted its environmental consent application under the same legislative framework.

Chatham also has applied for prospecting licences for offshore Namibian phosphate resources.

AL: Has any company mined seabed deposits at that depth before?

CC: There has been considerable ocean mining since the 1970s, including some at much greater depths. Chatham is proposing to use conventional dredging techniques using a leading marine services company. The extraction technique uses a modified dredging vessel equipped with a suction device on the seabed to vacuum up the nodules and associated sand, bring the material up on to the ship, separate the nodules (screening by size) and gently deposit the unwanted sand back on to the seabed from where it came.

The mining process will impact on bottom-dwelling organisms in the area being mined; however, detailed modelling of the plume generated by material being returned to the seafloor has established that the plume stays within the area being mined.

AL: How does Chatham rock phosphate differ from other sources?

CC: The rock is a very effective form of fertiliser, in that it binds to the soil. When applied directly, it reduces phosphate leaching into waterways by factor of ten.

As you may know, cadmium is a key contaminant of phosphate resources. It’s toxic, it accumulates in plants, and it’s very expensive to remove. The cadmium levels in Chatham Rise rock phosphate are among the lowest in the world, with an average of 2.2 parts per million. This compares with the voluntary limit of 280 parts per million, which New Zealand fertiliser companies achieve for manufactured superphosphate.

Cadmium is a naturally occurring heavy metal. New Zealand has heightened levels of cadmium in some of its soils from using previous sources of phosphate. High levels of cadmium can cause kidney failure and bone damage and has been statistically associated with an increased risk of cancer. Food is the dominant source of human exposure in the non-smoking population.

Excessive levels of cadmium in soils can restrict land use. New Zealand’s Ministry for Primary Industries (MPI) is managing the gradual build-up of cadmium in New Zealand soils through the cadmium contained in imported phosphate. The build-up of cadmium levels in sheep has caused MPI to ban the export of some offal from animals older than two and an half years.

AL: What other benefits do alternative phosphate sources have?

CC: Using this local source of rock phosphate would also reduce New Zealand’s carbon footprint by avoiding transporting the product from the other side of the world and benefit the country’s balance of payments and foreign exchange exposure.

It will provide New Zealand with a secure long-term sustainable local supply of rock phosphate and avoid exporting our environmental footprint to countries where mining phosphate involves severe social and environmental distress in disrupted territories. For example: dust generated by terrestrial phosphate mining regularly severely impacts local villages.

There are some wider benefits for New Zealand as well – such as high-value jobs in the selected port, and on the mining ship. In addition, there will be roles undertaking environmental monitoring and broader scientific research. Looking after the ship and crew means that there will be opportunities in a diverse range of support industries – particularly on the Chatham Islands, which is the nearest land mass to the resource. There will also be an economic boost in the agricultural sector. All this can occur without any significant impact on fishing yields or profitability, and without affecting marine mammals or seabirds.

In addition this project would enable New Zealand to become a world leader in this particular marine technology and expertise. This could potentially be worth billions of dollars. Furthermore, there’s a knowledge benefits, too – enhancing understanding of New Zealand’s marine environment. This will help identify priority conservation areas.

AL: Why was Chatham’s initial application turned down?

CC: Chatham’s application was turned down on limited, unexpected and relatively minor issues we are confident can be dealt with robustly on resubmission.

The application was only the second under new legislation, which was still “coming up to speed”. Since then the two main applicants and the Environmental Protection Authority, which assessed the applications, have learned a lot. It is expected this will be translated into improved application and hearing processes. Once Chatham has reapplied, the process is limited by statute to six months. There are no other significant hurdles to be negotiated.

Well, that’s certainly food for thought – and hopefully for your plate, too. I’m always one to keep an eye out for the unforeseen. Not only does it make Exponential Investor a bit more interesting, but it helps me plan my investments – and my survival. You can’t really get a more important story than this. Please do send your thoughts – andrew@southbankresearch.com.

Finally, don’t forget to check out our “white diesel” report. You can get it here.

Best,

Andrew Lockley
Exponential Investor

Media Coverage: NZ company to resubmit East Coast phosphate mining application

Radio New Zealand released the following article. To read in its original form click here.

ARTICLE TEXT:

NZ company to resubmit East Coast phosphate mining application

11:53 am on 10 May 2017 

A New Zealand company denied the right to mine phosphate from the ocean floor says the detention of a shipment of phosphate in South Africa shows it was right all along.

Chatham Rock Phosphate lost an application before the Environmental Protection Authority (EPA) to mine phosphate from the seabed off the east coast of the South Island.

Since then, 55,000 tonnes of phosphate have been seized in South Africa, en route for New Zealand, and political activists are promising more such actions.

They said the phosphate was mined in the Western Sahara, which was illegally occupied by neighbouring Morocco, making its export unlawful.

The shipment is one eighth of New Zealand's total annual needs.

Chatham Rock Phosphate chief executive Chris Castle said this development underlined the strategic value of New Zealand's own deposits.

His company sought to extract up to 1.5 million tonnes a year of phosphate from Chatham Rise, 450km off the East Coast of New Zealand, at a depth of 400m.

The company plans to re-submit its application to the EPA for reconsideration.

In the meantime it is closely watching a similar application by Trans Tasman Resources (TTR) which wants to mine ironsands from the sea floor off the coast of South Taranaki.

TTR was also turned down first time around but has come back with a second attempt to win approval.

Mr Castle added New Zealand phosphate would be low in cadmium, a poisonous metal often found in phosphate deposits.

Media Coverage: Secure, low cadmium and ethical phosphate resource option

Scoop.co.nz released the following article. To read in it's original form click here

Article Text: 

Secure, low cadmium and ethical phosphate resource option

Tuesday, 9 May 2017, 11:46 am
Press Release: Chatham Rock Phosphate

NEWS RELEASE 17-10 May 8, 2017

Chatham offers secure, low cadmium and ethical phosphate resource option to NZ farmers

WELLINGTON New Zealand – Chatham Rock Phosphate Limited (TSXV: “NZP” and NZAX: “CRP” or the “Company") wishes to reconfirm that it offers a secure, low cadmium and ethical phosphate resource option to NZ farmers.

New Zealand needs to use its own source of ethically-produced, environmentally-friendly phosphate rock rather than importing product from a disputed territory, Chatham Rock Phosphate Chief Executive Chris Castle said today.

He was commenting on the interception and detention, by the Western Sahara liberation movement, of a shipment of phosphate rock on route for New Zealand

“This is the sort of supply disruption which we have been signalling for years.

“As both New Zealand fertiliser manufacturers source a large part of their phosphate rock from that area, the implications for farmers and the agriculture sector (the backbone of our economy) are serious.

“It underlines the strategic value of our deposit.

“Most of the rock phosphate imported into New Zealand comes from mines in the Western Sahara which has been under armed occupation by Morocco since 1975. The trade has continued despite this – and the 1991 commitment of the United Nations (and subsequent sanctions) to ensure Western Sahara benefits from self-determination.”

Mr Castle said the Chatham Rise resource is not only an ethical source but it also has among the lowest known levels of cadmium.

“To put it in a nut shell, Chatham offers a secure, ultra-low cadmium supply of rock phosphate – with no associated ethical baggage.

Mr Castle said the current issue is also a good time to consider more environmentally sustainable alternatives to current fertiliser products.

“The rock coming (or not coming) from Morocco is used to make superphosphate, the predominant fertiliser used in New Zealand to apply phosphorus to soils.

“It’s well established this results in high levels of run off with resulting detrimental effects to our waterways. Research indicates it can also be detrimental to soil health over the long term.

“The solution to both problems is the use of Chatham rock phosphate as a direct application fertiliser.

“We can deliver a secure and sustainable local supply of low-cadmium phosphate that will also reduce fertiliser run-off into waterways, produce healthier soils and shrink fertiliser needs over time,” Mr Castle said.

The resource, with an estimated worth of $5 to $7 billion, represents one of New Zealand’s most valuable mineral assets and is of huge strategic significance because phosphate is essential to maintain New Zealand’s high agricultural productivity.

Chatham proposes to extract up to 1.5 million tonnes a year of phosphate nodules from the top half metre of sand on identified parts of an 820km2 area on the Chatham Rise, 450km off the west coast of New Zealand, in waters of 400m.

“Our environmental consenting process has established extraction would have no material impact on fishing yields or profitability, marine mammals or seabirds.”

Mr Castle said Chatham is also seeking other sustainable rock phosphate sources, to move from being a single project company and take more control of our destiny.

Recent approval of a Namibian environmental consent for a marine phosphate mining resource also opens the door for Chatham to advance its own Namibian permit applications. Chatham applied in 2012 for prospecting permits over five distinct areas well offshore Namibia, some not far from the area held by the successful applicant. These 2012 applications were lodged with the confidence that based on research undertaken to date, this area of the seabed likely contains substantial quantities of rock phosphate.