NZX Announcement: Antipodes Transaction Update

21 July 2015 

NZX Market Announcement

Antipodes Transaction Update

 Attached is a market announcement from Aorere Resources Limited concerning the likely termination of its agreement for sale and purchase with Antipodes Gold Limited.

As noted in the announcement Chatham Rock Phosphate and Antipodes Gold are in direct discussions with a view to still pursuing the proposed reverse takeover of Chatham Rock Phosphate.

The outcome of these discussions will be advised to the market in due course.

Chris Castle 

Chief Executive Officer

chris@crpl.co.nz

Click image above to read

Click image above to read

 

NZX Announcement: CRP seeks farmer capital to support local phosphate supply

Chatham Rock Phosphate is embarking on a new round of capital-raising among the farming community to develop a local supply of phosphate. CRP is seeking to raise $766,000. 

“This is an opportunity to invest in a green local phosphate source,” according to CRP managing director Chris Castle.

“CRP is now fund-raising as part of re-applying for an environmental consent. Assuming we receive this consent, we will quickly move towards production.”  Mr Castle noted CRP has a 20-year mining permit.

Following the latest capital-raising among existing shareholders, interests associated with the directors and management are now CRP’s largest shareholders, with New Zealand farmers and hundreds of other Kiwis owning more than half the company. 

Mr Castle said the offer is being marketed as an opportunity to own part of an independent local source of rock phosphate. CRP, a New Zealand public company with 950 shareholders, proposes mining 30 km2 a year to extract 1.5 million tonnes of phosphate nodules for use in New Zealand and Asia Pacific.  The permit area on the Chatham Rise is about two-thirds of the way to the Chatham Islands, at a depth of 400m.

“Assuming CRP is granted permission to extract phosphate from the Chatham Rise, it will provide New Zealand’s rural environment with an ethical local source of phosphate with some strong environmental benefits – specifically being low run-off, low cadmium and with a low carbon footprint.”

“It would also offer a strategic security of supply, given virtually all phosphate supplies come from politically unstable areas, mainly in North Africa. CRP would be an ethical producer of farm inputs, and New Zealand wouldn’t be exporting our pollution.” 

Mr Castle criticised environmentalists for condoning New Zealand’s importation of all its phosphate requirements. “It is hypocritical to support exporting our environmental footprint to countries that mine phosphate on land, involving severe social and environmental distress in those communities.” 

A resubmission by CRP would stress the considerable environmental benefits of the local resource: 

·       Chatham Rise phosphate when spread on pastures minimises waterways pollution because unlike superphosphate it binds to the soil, so very little leaches into streams and rivers.

·       It requires less frequent application, as the fertility effect lasts three years rather than one (also a financial benefit).

·       This local product contains almost no cadmium, a heavy metal that accumulates in the soil and can become a health hazard. The current Moroccan product has among the world's highest concentrations.  CRP’s product has moderate uranium content but is high in calcium, offering attractive liming qualities.

·       CRP’s product has a much lower carbon footprint because as a local source it doesn’t need to be shipped from overseas, and is applied less often.

On 23 October 2014 we made a detailed market announcement regarding our anticipated project economics and cost structures, including detailing our underlying assumptions.

This was updated in a further market announcement on 27 January 2015. Readers are referred to both announcements for more detail and copies can be provided on request. While the assumptions remain applicable (and critically the assumption that we will obtain a marine consent) those economics are significantly influenced by prevailing foreign exchange rates. In particular, costs are largely expected to be incurred in Euros and income is largely expected to be earned in US dollars.

Based on current exchange rates and the aforementioned assumptions, CRP’s annual profit before royalties and taxation would exceed $96 million. New Zealand would benefit from CRP paying $34 million in annual taxes and royalties, plus millions in port charges. Jobs - many high value and knowledge-based - would be created in the port, on the mining ship, undertaking environmental monitoring and broader scientific research, in the agriculture and hospitality sectors and on the Chatham Islands.

The income earned by extracting phosphate would be $9,700,000 per km2 over 30km2 a year compared with only $9,000 per km2 annually from fish bottom trawling which affects 50,000 km2 a year – but requires no environmental approvals. 

The Environmental Protection Authority concluded mining would have no significant impact on fishing yields or fishing industry profitability, marine mammals or seabirds.

Mr Castle said the CRP project could enable New Zealand to become a world leader in marine technology and expertise worth billions of dollars.

“What is at stake for New Zealand is potentially a lot more than phosphate. In addition to taxes and royalties from the CRP project  our work at sea enhances the understanding and knowledge base of our marine environment to help identify marine areas most deserving of conservation.”

Mr Castle said he is confident of a successful outcome for the environmental permitting process next time, due to: 

·       An expected improvement in the Marine Consent procedure, including interpretation of the EEZ Act

·       CRP was turned down on limited and unexpected grounds that we consider erroneous and can be dealt with more robustly on resubmission, (high-profile fishing industry and Iwi concerns were mutually agreed to be groundless)

·       CRP is confident of much wider and tangibly expressed support from relevant government agencies, the farming sector, and other stakeholders

·       The company more fully understands the rules of the game and expects the Environmental Protection Authority to have learned from the CRP and earlier Trans-Tasman Resources applications.

 

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

 

Warning - Forward Looking Statements

This release contains forward looking statements. Forward-looking statements and information are not historical facts, are made as of the date of this release, and include, but are not limited to, statements regarding discussions of future plans, guidance, projections, objectives, estimates and forecasts and statements as to CRP's expectations with respect to, among other things, mineral properties and the matters described in this release. 

These forward looking statements involve numerous risks and uncertainties and actual results may vary. Important factors that may cause actual results to vary include without limitation, the timing and receipt of certain approvals, changes in commodity prices, changes in interest and currency exchange rates, risks inherent in exploration results, timing and success, inaccurate geological and metallurgical assumptions (including with respect to the size, grade and recoverability of mineral reserves and resources), changes in development or mining plans due to changes in logistical, technical or other factors, unanticipated operational difficulties (including failure of plant, equipment or processes to operate in accordance with specifications, cost escalation, unavailability of materials, equipment and third party contractors, delays in the receipt of government approvals, industrial disturbances or other job action, and unanticipated events related to health, safety and environmental matters), political risk, social unrest, and changes in general economic conditions or conditions in the financial markets.

Media Release: CRP seeks more capital to rebuild

Media Release

29 June 2015                                                            

CRP seeks more capital to rebuild

Chatham Rock Phosphate is embarking on a new round of capital-raising for the shortfall of its earlier share issue.

CRP is seeking to raise $766,000.  The shares are being marketed among  wholesale investors, particularly within the farming community.

“This is an opportunity to invest in a green local phosphate source,” according to CRP managing director Chris Castle.

“CRP is now fund-raising as part of re-applying for an environmental consent. Assuming we receive this consent, we will quickly move towards production.”  Mr Castle noted CRP has a 20-year mining permit.

Following the latest capital-raising among existing shareholders, interests associated with the directors and management are now CRP’s largest shareholders, with New Zealand farmers and hundreds of other Kiwis owning more than half the company. 

Mr Castle said the offer is being marketed as an opportunity to own part of an independent local source of low cadmium, low carbon footprint rock phosphate.

“The money currently sought allows CRP to rebuild the company over the next 12 months. A lot can happen in a year, the history of this company makes that very evident.”

CRP has undertaken an assessment of its current market value and notes there is little downside because CRP shares are already priced on the market’s assumption that CRP will either not get the marine consent on the second attempt or not be able to raise the funding to reapply. 

The market capitalisation post the consent decline settled at $3.7 million but has since drifted to $2.45 million (despite raising $713,000). 

Mr Castle said entry into CRP at 0.6 cents a share values the company (post placement) at $2.76 million or an enterprise value of $1.4 million net of cash.  

“That’s $2 million less than our market capitalisation in April 2010, when we had no management team as such, no contracts with Boskalis, no 20-year mining permit, no legislation for applying for a marine consent, significantly less knowledge about the deposit, no direct involvement or expertise in the phosphate market, and only $250,000 in the bank.

“Even without the environmental consent, or the certainly of gaining it, CRP’s market value has exceeded $40 million for almost all of the period September 2012 to February 2015.

 

Mr Castle said he is confident of a successful outcome for the environmental permitting process next time, due to:

·       An expected improvement in the Marine Consent procedure, including interpretation of the EEZ Act

·       CRP was turned down on limited and unexpected grounds that we consider erroneous and can be dealt with more robustly on resubmission, (high-profile fishing industry and Iwi concerns were mutually agreed to be groundless)

·       CRP is confident of much wider and tangibly expressed support from relevant government agencies, the farming sector, and other stakeholders

·       The company more fully understands the rules of the game and expects the Environmental Protection Authority to have learned from the CRP and earlier Trans-Tasman Resources applications.

Mr Castle said CRP’s core attributes enabling it to make such significant progress since being granted a prospecting permit in early 2010 include CRP’s:

·       proven ability to fund the company from its inception ($33.5 million in five years starting from a zero base)

·       obtaining a 20-year mining permit

·       building an internationally recognised project team

·       developing unique intellectual property

·       on-going partnership with Boskalis Offshore B.V.

He noted CRP has diversified with five marine applications offshore Namibia, a developing relationship with other key players (including locals) in that market, and is undertaking due diligence on other phosphate assets in multiple offshore locations. Qualifying projects would be acquired using equity  and executing such acquisitions will be a focus later in 2015. 

CRP is also entering the phosphate trading market aimed at using the existing management team and industry contacts to generate cash flows prior to production from the Chatham Rise.

Finally CRP is proceeding with a listing on the TSX.V through a reverse takeover of Antipodes Gold, which will appeal to existing North American shareholders, and which will facilitate fundraising in Canada, the largest mineral-resources focused marketplace. A secondary listing in New Zealand would remain for local shareholders.

Profitability and Value

On 23 October 2014 we made a detailed market announcement regarding our anticipated project economics and cost structures, including detailing our underlying assumptions. This was updated in a further market announcement on 27 January 2015. Readers are referred to those announcements for more details and copies can be provided on request. While the assumptions remain applicable (and critically the assumption that we will obtain a marine consent) those economics are significantly influenced by prevailing foreign exchange rates. In particular, costs are largely expected to be incurred in Euros and income is largely expected to be earned in US dollars.

Based on current exchange rates and the aforementioned assumptions, CRP’s annual profit before royalties and taxation would exceed $96 million. New Zealand would benefit from CRP paying $34 million in annual taxes and royalties, plus millions in port charges. Jobs - many high value and knowledge-based - would be created in the port, on the mining ship, undertaking environmental monitoring and broader scientific research, in the agriculture and hospitality sectors and on the Chatham Islands.

These valuations are tabled below.

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

Warning - Forward Looking Statements

This release contains forward looking statements. Forward-looking statements and information are not historical facts, are made as of the date of this release, and include, but are not limited to, statements regarding discussions of future plans, guidance, projections, objectives, estimates and forecasts and statements as to CRP's expectations with respect to, among other things, mineral properties and the matters described in this release.

 

These forward looking statements involve numerous risks and uncertainties and actual results may vary. Important factors that may cause actual results to vary include without limitation, the timing and receipt of certain approvals, changes in commodity prices, changes in interest and currency exchange rates, risks inherent in exploration results, timing and success, inaccurate geological and metallurgical assumptions (including with respect to the size, grade and recoverability of mineral reserves and resources), changes in development or mining plans due to changes in logistical, technical or other factors, unanticipated operational difficulties (including failure of plant, equipment or processes to operate in accordance with specifications, cost escalation, unavailability of materials, equipment and third party contractors, delays in the receipt of government approvals, industrial disturbances or other job action, and unanticipated events related to health, safety and environmental matters), political risk, social unrest, and changes in general economic conditions or conditions in the financial markets.

 

Letter to the Editor - Inside Resources

Chris Castle - Thu, 04 Jun 2015

 The biggest irony with the Environmental Protection Authority declining Chatham Rock Phosphate’s marine consent application is that the project offers such valuable environmental benefits. 

The decision has far wider implications than for one company.  It has also:

1. Turned foreign investors off New Zealand resource projects.

2. Stopped a huge opportunity for farming to become far more environmentally sustainable.

3. Reinforced the view among business that Government continues to find ways to prevent rather than enable development.

Quite a lot has happened since the EPA’s February decision to reject CRP’s application to extract environmentally friendly rock phosphate from depths of 400 metres on the Chatham Rise seabed, two thirds of the way to the Chatham Islands.

The Government is taking (at this stage faltering) steps looking at how the Exclusive Economic Zone consent process can work so New Zealand benefits from projects such as ours while ensuring the environment is protected. 

CRP is regrouping – evolving from its single project focus into a more diversified company, principally involving other phosphate projects, both on and offshore. 

The fact virtually all of CRP’s overseas shareholders (representing about half the capital before the latest capital raising) failed to stump up with any cash speaks volumes.  They simply lost faith with New Zealand as an investment option. 

CRP’s decision to explore other opportunities recognises financing a re-application will be easier if investors don’t face the same binary EPA decision risk.  Acquiring and developing new projects will be significantly easier by listing on a more recognised and liquid overseas stock exchange; Toronto is a leading market for mining and fertiliser stocks.  Directors decided the most cost effective way is listing through a reverse takeover of TSX.V stock Antipodes Gold.

Meanwhile, looming large is the irony of EPA failing to consider the project’s huge environmental benefits, given few mining projects can make that claim.

CRP’s project to mine phosphate, an essential mineral for plant growth, is critical for our agricultural future. Annual supply of 1.5 million tonnes of phosphate could replace a large chunk of less environmentally desirable imports.  It will also improve our security of supply - virtually all phosphate supplies now come from politically unstable regions, mainly in North Africa.

Farmers are criticised for their environmental footprint – especially causing fertiliser run-off into waterways.  A key benefit of Chatham Rise phosphate (New Zealand’s only source) is that little leaches into streams because the product binds to the soil.  That enables the fertility effect to last three years so both high country and fertiliser-saturated dairy land require less-frequent application, also reducing costs.

It also contains almost no cadmium, a heavy metal accumulating in our soil that can become a health hazard.  The current Moroccan-sourced product has among the world’s highest concentrations. As a local product involving less transport and applied less often, it also has a much lower carbon footprint.

The EPA’s assessment of only modest economic benefits was unintelligible considering CRP is forecasting annual profits approaching $100 million before $34 million of royalties and tax - among New Zealand’s top profit earners. Expected dividends and capital growth would reward 950 shareholders who have so far invested $33.5 million.

Other economic benefits include the many jobs created in the port, on the mining ship, in the agriculture and hospitality sectors, on the Chatham Islands and undertaking environmental monitoring and scientific research.

Before we commit to a new application we want the EPA and the government to figure out how we can make the grade with appropriate safeguards – not setting an impossibly high bar. Permanently available people competent in relevant science, finance and economics would be a start - our decision-making committee’s skills in these areas were inadequate.

Our proposed area of operation must be put in context; we’re planning to mine 30 square kilometres a year, or 450 sq km over 15 years.  Fishing damages 50,000 sq km a year through bottom trawling.  Agriculture covers around 120,000 sq km.

The EPA had concerns around uncertain effects of our operations in the broader EEZ - particularly about where else stony corals might be - yet ignored the widespread damage to corals by fish trawling.  We provided information about likely locations, and suggested how we could avoid coral communities, but uncertainty reigned, along with multiple counting of precaution. 

The materiality of risk and uncertainty must relate to the 4 million sq km EEZ. That involves assessing how risks can be controlled, such as applying adaptive management as it works all over the world – by learning and adapting during the life of a project.

Most importantly, the government needs to deliver on the purpose of the Act - promoting sustainable management of the EEZ’s natural resources to enable resource development rather than only focusing on protection.

Chris Castle is Managing Director of Chatham Rock Phosphate

Final announcement for the year to 31 March 2015

Dear Chatham Rock Phosphate shareholder or stakeholder,
 
This announcement has just been released by NZX. The financial statements are attached to this email and will also be available online at NZX and on our website.  
 
Regards,
 
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
 
 
Final announcement for the year to 31 March 2015
Financial result
 
The results for the year to 31 March 2015 show an audited loss of $27.3 million (2014 loss of 1.42 million) including write-offs arising from the decline of the marine consent application.
 
The two main components related to the loss were $18.7 million of exploration costs written off and $6 million of costs related to the marine consent process.
 
While we don’t consider this historic investment wasted by any means, the write-offs reflect both accounting standards and the post-decision decline in the listed market value of Chatham Rock Phosphate.
 
We remain confident this project has extraordinary merits and deserves to succeed.  Given the ongoing support of our shareholders, and assuming an enabling approach by government authorities we believe it will prove to be a significant project of national benefit as well as rewarding your loyalty and faith.
 
As we have already announced, we are also evaluating a range of diversification options relating to overseas projects. We consider this prudent given the failure, to date, of New Zealand government agencies to tangibly support the development of a marine mining industry.

Your directors are currently disputing approximately $834,000 of excessive costs levied against the company by the Environmental Protection Authority (EPA) in relation to the marine consent application process.

The board is also considering all options to obtain a partial refund of the mining permit fee. The directors have commenced discussions with New Zealand Petroleum and Minerals seeking a 90 per cent refund of the $475,000 annual mining permit fee, paid in full, in respect of the period to 30 June 2014.
 
CRP will be seeking to have its mining permit fees and work programme obligations put on hold until the marine consent issues can be resolved.  It is ludicrous CRP should be expected to pay mining permit fees for a project it is unable to advance without the relevant marine consent. 
 
The EPA decision
 
CRP would not have proceeded with a marine consent application unless it believed there was a realistic chance of having it granted.
 
Our application, the culmination of several years of work, can be updated and resubmitted relatively easily once we have gained the required confidence the permitting landscape has changed. This can happen either with legislative change or by revised administrative procedures at the Environmental Protection Authority (EPA) – preferably both.
 
Our earlier application was both comprehensive and sound, with the initial key areas of contention resolved during the expert caucusing and the hearing.
 
The Decision Making Committee’s (DMC) consent decline displayed lack of relevant expertise, in particular the inability to contextualise the impacts of our operation within either the Exclusive Economic Zone or the Chatham Rise.   This legislation is clearly not achieving its purpose to promote the sustainable management of the natural resources of the Exclusive Economic Zone and the Continental Shelf.
 
The EEZ Act is flawed, as is the manner in which the EPA has interpreted it.
Without changes to the law or administrative procedures there is very little likelihood investors – including those operating in both the minerals and oil and gas sector – will consider investing in any future New Zealand projects.  That is evident from the almost complete lack of financial support from international investors for our just-completed share issue.
Having been on the receiving end of a very expensive decision to decline, we believe the law can function more fairly and effectively for all parties.   These include:
 
1.    The Act needs to clarify the purpose of the Act, so it is enabling of resource development, as was its intention, rather than having a sole protection focus. There are inconsistencies between the objectives of the EPA as an organisation (protection) and the EEZ Act purpose (management), but it is the purpose of the legislation that must prevail. The Act’s purpose is a management rather than a protection role.
2.    The appeal provisions are unworkable and should go or be radically changed. It is futile for an appeal on points of law to go to the High Court and then back to the original decision makers who are unlikely to be willing to change their minds.
3.    The Act needs to put risk and uncertainty into its proper context, consider the materiality of the risk, and look at changes to information principles, which are inappropriate when applied to the 4 million km2 EEZ.  Changes also need to remove the "uncertainty refuge" and not allow multiple counting of precaution.
4.    The Act needs to be clear about applying adaptive management principles as they work in the real world – this is by learning (and adapting) by doing as an integral part of a project.
5.    There needs to be a clearer definition of "existing interests".
6.    The Act needs to allow for the environmental and strategic benefits of a project to be evaluated alongside economic benefits and these in turn need to be properly balanced against environmental effects that cannot be managed or mitigated.
7.    As part of the revision of relevant legislation, the Benthic Protection Areas need to be abolished and absorbed into broader marine protection areas and the need for other statutory approvals, such as under the Wildlife Act should be rendered unnecessary if marine consent is granted.
 
CRP has initiated discussions with the EPA’s board and management.  They relate to:
·     The organisation adopting an enabling rather than protection-focused culture with regard to managing the EEZ legislation.
·     Changing the decision-making committee model so it has permanently available people with competence in relevant science, finance and economics.
·     Enabling a more iterative/interim decision-making process that is not binary and allows for areas of concern or confusion to be clarified.  The focus should be on finding a way to permit activities with appropriate safeguards rather than setting an impossibly high bar.
·     Reviewing the level of involvement by submitters who have opinions rather than providing expert evidence.
·     If applicants reapply, they should not need to re-present areas already in agreement.  Nor should applicants be expected to pay for such rework.
 
EPA costs
 
We have paid $6 million in costs directly associated with our application to the EPA alone, and shareholders have now invested more than $33 million in this project.
We understand the need for user pays but the costs charged to CRP were exorbitant.  We have told the Government, and the EPA, that the EPA must minimise costs for applicants and stop waste and extravagant spending. CRP is concerned it has paid extremely high costs for the EPA to learn a new regime and work through teething issues.  This is not acceptable. The Government should be funding the EPA learning curve, not applicants.
 
Going forward, assuming we resubmit our application, we do not expect to pay twice for the errors of an unprepared organisation and inadequate legislation and processes.  The learning curve needs to be shared among the parties and we believe we have already paid significantly more than our fair share.
 
The way forward
 
CRP’s board has spent the past three months evaluating the marine consent decision to determine the most appropriate path forward, as part of assessing our overall business strategy. As part of the reassessment process, the directors have dramatically scaled down operations until such time as a resubmission of the marine consent application is deemed appropriate.
 
Regardless of the future of CRP’s Chatham Rise project, the board has determined CRP will evolve from its single project focus into a more diversified company, principally involving other phosphate projects, both on and offshore.  Accordingly our 2012 exploration licence applications off shore Namibia are being followed up on. Further, due diligence is being undertaken in respect of a number of phosphate assets based both on and offshore in Australasia, North Africa, Southern Africa, Canada, USA and South East Asia. They range from green-field exploration projects, to those in development and near-to-production. Other marine mining opportunities involving other commodities will also be evaluated by our team.
 
The main drivers for this evolution in our strategy is not only the desire to reduce investor risk, but also to take advantage of (and therefore retain) the significant institutional knowledge and expertise within our management team and our partner organisations. This knowledge spans marine and environmental science, the development of offshore mining projects, and extensive knowledge of the phosphate market, both locally and internationally. 
 
We also consider that CRP’s ability to finance the eventual resubmission of the marine consent application will be enhanced if both existing shareholders and potential new investors don’t face the same binary EPA-decision risk as in the past. 
 
The acquisition and development of these new projects within CRP would be significantly easier if CRP was listed on a more recognised and liquid overseas stock exchange. The Toronto stock exchange is the most logical one as it is a leading exchange for mining stocks and also has a major fertilizer component.
 
Directors considered various options for the most cost effective way of listing and identified a reverse takeover of an existing TSX.V  listed stock as most effective.   That process has started and our identified “partner” Antipodes Gold, is currently undertaking due diligence on CRP.
 
Outcome of the rights issue
 
CRP has just issued 102,205,156 ordinary shares to existing shareholders at an issue price of 0.6 cents per share.
The offer raised approximately $613,000, which will be used to fund CRP’s continued operations and for costs related to the proposed merger with Antipodes Gold. CRP is in discussions with a number of qualified investors with a view to placing the shortfall from the recent rights issue to raise funds of approximately $760,000.

The issue was particularly well supported by New Zealand based shareholders, for which the board is grateful. However the almost universal lack of support from our major overseas shareholders is concerning both to CRP and a very clear indication that many international investors no longer consider the resources sector in New Zealand a viable investment destination. The damage caused by the EPA’s decision to decline our marine consent application has much wider sovereign risk related consequences than just its impact on CRP.   
 
Project fundamentals
 

While the past year has involved a significant setback, it’s worth revisiting the fundamentals of our plan to extract phosphate from the seabed more than 250 km from the nearest point of land. We’ve always believed the critical factors for this project are:
1.      Can the resource be defined?
2.      Can it be mined?
3.      Can the product be sold?
4.      Can the project be permitted?
 
We can put a confident tick along the first three questions.  We have also received half of the final permitting question through gaining a mining permit.
 
Our focus over the coming year is to ensure we can be in a position to confidently reapply for a marine consent, to complete the final tick in the box.
At the same time we intend to ensure CRP positions itself for a robust future with a variety of international options, given how poorly the New Zealand permitting regime has so far served its purpose.
 
Chris Castle                                                                                                        Linda Sanders
Managing Director                                                                                         Director

To read the full financial statement - click here

NZX Announcement: Antipodes Transaction Update

21 May 2015

NZX Market Announcement

Antipodes Transaction Update

Following the announcement on 1 April 2015 of its proposed business restructure Chatham Rock Phosphate (CRP) has now entered into a formal loan agreement with Antipodes Gold Limited (AXG).

Under this agreement, CRP will make an interest-free, unsecured loan to AXG, in order for it to meet its share of the transaction costs, and to cover interim general expenditure.

AXG is now preparing to lodge relevant initial documents with the TSX Venture Exchange (TSX.V), and will provide a further update upon their review.

Transactions Summary

AXG’s business assets are comprised solely of minority interests in gold exploration permits, held by its New Zealand subsidiary through two joint venture agreements with neighboring mining operator Newmont Waihi Gold Limited ("Waihi Gold"). Unable to raise capital for development of these assets, AXG’s financial position has demanded a restructure to realise the current value of its business assets and remaining company structure.

The transactions proposed are in two steps, both subject to the satisfaction of conditions:

AXG will first sell its New Zealand subsidiary, containing its business assets, to Aorere Resources Limited ("AOR"), subject to exercise by Waihi Gold of its pre-emptive rights.

The second step will then be for AXG, now a listed shell, to undertake a reverse take-over by offering newly-issued capital to CRP's shareholders (which include AOR), and leaving AXG’s current shareholders with a residual stake in the post-transaction company.

Chris Castle

Chief Executive Officer

chris@crpl.co.nz

NZX Announcement: Allotment of Shares

 

13 May 2015

Chatham Rock Phosphate Limited: Allotment of Shares

Chatham Rock Phosphate Limited’s (NZX: CRP) renounceable rights offer (Offer) closed on Wednesday 6 May 2015.

CRP has issued 102,205,156 ordinary shares (Shares) existing shareholders at an issue price of $0.006 per Share, in accordance with the terms of the Offer.

The Offer raised approximately $613,000, which will be used to fund CRP’s continued operations and for a potential restructuring transaction later this year (as previously disclosed in respect of the Offer). CRP is in discussions with a number of qualified investors with a view to placing shortfall from this Offer.

The issue was particularly well supported by New Zealand based shareholders, but the almost universal lack of support from our major overseas shareholders is concerning both to CRP and a very clear indication that many international investors no longer consider the resources sector in NZ a viable investment destination. The damage caused by the EPA’s unexpected decision to decline our Marine Consent application has much wider sovereign risk related consequences than just its impact on CRP.   

Additionally, CRP advises that it has issued 2,812,500 ordinary shares in aggregate to three contractors of the Company (CRP-OCS Consulting Limited, Robin Falconer Associates Limited and LJ Sanders Consulting Limited) in accordance with their respective contracts for services and at an issue price of $0.016 (Payment Shares).  These Payment Shares represent partial payment for services and the issue price reflects the 20 day volume weighted average price of a share in CRP on the NZAX market to 31 March 2015.

Full details of the allotments are set out below.

For and on behalf of the Board,
Chris Castle

Managing Director

BBC Documentary about the importance of phosphate

Here are some fairly compelling reasons why investing in phosphate is a good idea (in case you needed to know!)

1. Phosphorus is the world's most important element – it is called the "bringer of life".  All organisms need phosphorus to sustain life – it is the backbone of DNA.

2. Without phosphorus the world could not feed itself and supplies in most countries are running short.

3. Morocco is the world's major source but that country is surrounded by failing or unstable states.  Morocco's hold on the phosphate market has been described as one of the world's most impressive quasi monopolies in history.

4. The price of phosphate has tripled since 2000.

5. Demand for the product continues to grow every year. 

These and some other facts feature on a 19 minute BBC audio programme found by one of our shareholders.  We thought you might be interested in hearing it in full so here's the link:

http://www.bbc.com/news/business-26138372

The BBC web page also has a link to an earlier written article on the same topic which covers some of the information in the audio programme.