NZX Announcement: Media Release - CRP decision delayed by 6 days

 16 January 2015 

The Decision Making Committee of the Environmental Protection Authority today said it would take another six working days to reach a decision on Chatham Rock Phosphate’s marine consent application.  A decision is now due on or by 10 February.

 The DMC announcement (repeated below) said the delay for the decision, previously expected on or before 30 January, was due to the unavailability of DMC members during December and January.

CRP Managing Director Chris Castle said while he, along with all shareholders, wants a decision as quickly as possible, he is pleased the committee is taking its time to reach what he believes will be a positive result.

“It’s a bit like exam results.  We’ve know we have done the course work comprehensively, we’ve sat the exam and we know we answered everything well – now we are waiting for the results.

 “We remain very confident 2015 will be an exciting year of progress for this project,” Mr Castle said.

 

Chatham Rock Phosphate Limited - Marine Consent Application

M22 - Minute of the Decision-making Committee – 16 January 2015

Extension of Time Limits and Decision on the Application

1.      The DMC, pursuant to section 159 (1) (a) of the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012 (the EEZ Act), has extended the time period in which to make a decision on the CRP marine consent application until 10 February 2015.

2.      Where a hearing is held, section 68 of the EEZ Act requires that the DMC must make its decision on an application as soon a reasonably practicable and no later than 20 working days after the conclusion of the hearing. The hearing concluded on 12 December 2014. 30 January 2015 is 20 working days after the conclusion of the hearing (the EEZ Act excludes the period between 20 December and 10 January as non-working days).

3.      The DMC’s consideration of this application was originally scheduled to be completed by 27 November 2014. Adjustments to the pre-hearing timetable and the deferment of the Chatham Islands hearing dates necessitated an extension of that timeframe. The timetable has also been disrupted by the unavailability of DMC members in December and January owing to prior commitments.

4.   In extending the time period in which to make a decision, we have taken into account the requirements to deal with the application as promptly as is reasonable in the circumstances and to establish a procedure that is appropriate and fair, under section 40 of the EEZ Act. In addition, we have considered the matters required under sections 159 and 160 of the EEZ Act.

5.      We consider that no party would be adversely affected by the extension, and that the extension serves the interests of the community in ensuring that the DMC is able to achieve an adequate assessment of the application.

For the DMC:

Neil Walter

DMC Chair

NZX Announcement: Allotment of new ordinary shares

Chatham Rock Phosphate advises that it has issued 238,095 fully paid 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 $0.189 (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 December 2014.

Full particulars of the allotments are set out below.

 Chris Castle

Chief Executive

Email: chris@crpl.co.nz

 

Update - 18th December 2014

 

Merry Christmas

The Chatham Rock Phosphate board and management team would like to wish all our shareholders and stakeholders a Merry Christmas and Happy New Year.  We’re especially hoping for the latter and that January will bring good news.

 

Decision expected in January

A decision on CRP’s marine consent application should be announced on or before 30 January.

The Decision-making Committee assessing CRP’s application officially closed the hearing last Friday, setting the clock ticking on 20 working days (excluding from 20 December to 10 January) to consider its decision.

The DMC adjourned the hearing on 19 November to consider whether it had sufficient information to formally close the proceeding.  In the intervening time it concluded it didn’t need any further input from the parties, hence the decision to close.

While we’d obviously have liked a decision before Christmas, we’re pleased the DMC is taking its time to consider what is complex and very detailed information. All groups with an interest in seabed mining are waiting for the decision with bated breath. 

 

Trials show Chatham rock highly effective

Earlier this week we announced the results of new glasshouse trials demonstrating the performance of direct application Chatham Rise rock phosphate compares favourably with manufactured fertilisers. We commissioned Lincoln University and AgResearch to undertake trials in a glasshouse over four months to assess the effectiveness on plant productivity of phosphate samples we collected during 2012 voyages.

The trial found our phosphate delivered on average 85% of the productivity of low-sulphur triple superphosphate. The tests used clover grown on five pasture soils from Chatham and the South and North Islands.  The testers used three application rates and took three harvests with plant yield and phosphorus uptake in the clover used to measure performance.

The study achieved comparable results to extensive field trials conducted during the 1980s, which also found Chatham Rise rock phosphate to be an effective pastoral fertiliser. 

We’re planning field trials in the new year in a range of environments and pastoral systems across the country.  They will update and confirm the applicability of the product to modern farming practices, with a focus on New Zealand farming conditions but the results are expected to be applicable to global markets.

News of our trials featured on Radio New Zealand’s midday rural news.  If you want to listen, our item starts about half way through the bulletin:

http://www.radionz.co.nz/national/programmes/ruralnews/audio/20161273/midday-rural-news-for-16-december-2014

 

CRP to receive Callaghan R&D grant

Receipt of a Callaghan Innovation Research and Development (R&D) Growth Grant is a strong vote of confidence in CRP’s innovation. Thanks to our Chief Operating Officer Ray Wood for the extensive work he put into the application.

Callaghan provides grants to increase R&D investment by businesses.  The grants provide 20% public co-funding for qualifying firms’ eligible expenditure, capped at $5 million a year. After two years, businesses can be granted a two-year extension of funding.

We see the grant as an endorsement of CRP’s innovation since 2010 in developing our pioneering marine mining project with its strong ties to agriculture.

Planned field trials will be one of our first research priorities with scientists from AgResearch and Lincoln University to test direct application of CRP’s phosphorite rock to determine optimum application programmes for typical New Zealand pastoral uses, including established hill country grazed pasture and high producing pastures under intensive dairy grazing.

Other research priorities include collecting environmental data from the Chatham Rise to better understand the variability of oceanographic conditions and sea floor habitat and trialing the placement of hard material on the sea floor to encourage re-establishment of sensitive benthic habitats.  We also want to test components of the mining system at 400 m on the Chatham Rise and develop new techniques to monitor the dynamic sediment plume generated by the mining operations.

 

Helping our neighbours

Ray Wood attended the Pacific-Europe Network for Science, Technology and Innovation (PACE-Net Plus) workshop on Reconciling Mining and Sustainable Development in Pacific Countries held in Auckland on 8-9 December. The project is a 3-year programme to encourage bi-regional dialogue between European and Pacific researchers.

The workshop identified priority areas for future research cooperation to address the challenges of reconciling mining industry (both terrestrial and seabed mining) and sustainable development in the Pacific countries. The workshop discussed enhancing environmental considerations in mining, increasing knowledge on environmental and social impacts and corporate social responsibility.

The objectives were to define and update the science, technology and innovation priorities in the area; identify future EU-Pacific cooperation, make recommendations to policy makers, and identify innovation niches. The group also identified joint initiatives such as calls for research proposals and exchange of knowledge.

There was repeated emphasis on the importance of community engagement by mining companies. The workshop concluded with several proposals for projects that could benefit the South Pacific such as an institute to provide advice to Pacific Island countries on mining-related issues, and developing underwater robots to make exploration and development more efficient and affordable for these countries.

CRP was chosen as a case study for the deep-sea mining topic. We are providing a copy of all the documents, evidence and testimony from the marine consent hearings to the island states.

 

Funding Round Successfully Completed

Completing a final tranche of $820,000 in new capital takes us fully through the marine consent application process.  We don’t plan to seek any additional capital until a decision on our application has been made.

We’re thankful to shareholders for their continued strong belief in and support of the project over the past few years and sincerely hope the next cash we raise will be at significantly higher prices.

Meanwhile it’s gratifying to see the share price recover in recent weeks from the 12c level at which we’ve been issuing shares, to around 19-20c since the capital raising pressure ended.

 

 

Financial Result

The interim report issued in late November provided shareholders with a more detailed summary of our operations.  The trading result for the six months to September 30 was a loss of $1,870,507 (2013: loss of $675,788), reflecting the costs associated with higher levels of activity – especially the marine consent process.  For the full report go to our website:

http://www.rockphosphate.co.nz/news/2014/12/8/chatham-rock-interim-report-for-the-six-months-to-30-september-2014

 

Updated presentation

We’ve updated our investor presentation and it’s on the front page of the website. For a useful overview check out:

http://static.squarespace.com/static/51d24098e4b0d519d0c065f5/t/54869d25e4b003a45498dfd0/1418108197469/CRP+8+December14.pdf

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

NZX Announcement: Media Release - Chatham Rock Phosphate marine consent decision due by 30 January

12 December 2014

A decision on Chatham Rock Phosphate’s marine consent application is expected to be announced on or before 30 January 2015.

The Decision-making Committee hearing CRP’s application today officially closed the hearing.

Once closed the DMC has 20 working days to consider its decision which would mean the decision would be given on or before 30 January. When adjourned the DMC said a decision would be released as soon as practicable after it has been made.

The DMC adjourned the hearing on the application by CRP for a marine consent on 19 November to consider whether it had sufficient information to formally close the hearing.  In the intervening time it has concluded that it does not need any further input from the parties hence the decision to close the hearing today.

“We are delighted we have some certainty regarding the time frames,” managing director Chris Castle said.  “This has been a long, complex and costly process.  We feel confident we have presented a compelling case for consent. We have done the science and engineering work to show we can carefully manage the environmental impacts.

“I know the industry, both here and internationally, and representatives of the wider economy are watching this application with interest as it is the first of its kind in the world.” 

The 26 days of hearings were held in Wellington, Hamilton and Chatham over a seven week period from September to November.  CRP submitted its application in May following four years of research and preparation.

CRP received its mining permit from New Zealand Petroleum and Minerals in December last year.  The permit grant is conditional on a marine consent under the Exclusive Economic Zone  and Continental Shelf legislation.

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

NZX Announcement: Media Release - Chatham Rock Phosphate to receive Callaghan R&D grant

Media Release

10 December 2014

Chatham Rock Phosphate to receive Callaghan R&D grant

Chatham Rock Phosphate (CRP) is delighted to announce it will receive a Callaghan Innovation Research and Development (R&D) Growth Grant.

Callaghan provides R&D Growth Grants to increase R&D investment in businesses.  These on-demand, three-year grants provide 20 per cent public co-funding for qualifying firms’ eligible R&D expenditure, capped at $5m per annum. After two years of funding, businesses can be granted a two-year extension of funding.

“We are honoured our project has been recognised.  We consider the grant to be a strong endorsement of the innovation CRP has demonstrated since 2010 in developing a pioneering project in the marine mining industry with strong ties to New Zealand’s most important export earner, agriculture,” managing director Chris Castle said.

Chatham Rise-based rock phosphate will offer the opportunity for New Zealand’s farming industry to derive new environmental benefits from the use of a low cadmium, low carbon footprint, low run-off organic product.

“The grant will enable CRP to increase its expenditure in innovative parts of our business, supporting and growing New Zealand’s scientific and engineering capability.

“Once production starts, CRP expects to be a $200 million dollar a year business with significant on-going investment in R&D.”

Over the past four years CRP has raised more than $33 million, much of which has been invested in scientific research to prepare the information required for a marine consent and mining permit.  CRP is currently in the final stages of its marine consent process, awaiting a decision on its application.  It was granted a mining permit in late 2013.

One of the first priorities of CRP’s research plan is to demonstrate the agronomic effectiveness of direct application of CRP’s phosphorite rock and to develop a strategy for growing the domestic and international market for this phosphorus source. Scientists from AgResearch and Lincoln University will supervise field trials of direct application of CRP’s phosphorite rock to determine optimum application programmes for typical New Zealand pastoral uses, including established hill country grazed pasture and high producing pastures under intensive dairy grazing.

Similar trials in the 1980s demonstrated the potential value of the resource as a direct application fertiliser, and these will be updated to demonstrate the applicability of the product to modern farming practices. The emphasis will be on New Zealand farming conditions but the results are expected to be applicable to global markets.

Benefits of direct application of CRP’s product include reduced cadmium build-up in the soil, lower phosphate runoff in waterways, and reduced need for fertiliser application in the medium to long term.

Other research priorities include:

Collecting environmental data from the Chatham Rise to better understand the natural spatial and temporal variability of oceanographic conditions and sea floor habitats

Triialling the placement of hard material on the sea floor to encourage re-establishment of sensitive benthic habitats

Testing components of the mining system at 400 m on the Chatham Rise

Developing novel techniques to monitor the dynamic sediment plume generated by the mining operations.

CRP has already started discussions with New Zealand and international research organisations about some of these projects.

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

NZX Announcement: Funding Round Successfully Completed

28 November 2014

Funding Round Successfully Completed

 Chatham Rock Phosphate is pleased to advise that it has raised approximately $820,000 in new capital. The allotment consists of new ordinary shares at $0.12 per share with one new listed CRPOB option allotted with each new share.

This completes the company’s funding round at $0.12 per share and funds the company through the decision point for its Marine Consent application.  It is therefore not intended to seek any additional capital until a decision on the application has been made. As previously indicated to the market the company remains optimistic that a decision on the application will be released in the next few weeks.

The Board  thanks shareholders for their strong belief in and support of the project.

Full particulars of the allotments are set out below.

Chris Castle

Chief Executive

Email: chris@crpl.co.nz

 

NZX Announcement: Results for announcement to the market for the 6 months to 30 September 2014

Financial Result

Your directors submit the unaudited financial statements of Chatham Rock Phosphate Limited (CRP) for the six months to 30 September 2014. The trading result for the period was a loss of $1,870,507 (2013: loss of $675,788). An analysis of the result is provided in the table below:

The increased deficit for the six months to 30 September 2014 is mainly due to costs related to the AIM listing process that commenced during the period.

Operations Highlights

It’s been an incredibly demanding, satisfying and yet at times frustrating six months but as we approach the end of 2014, we can look back on having achieved some significant milestones. Most satisfying and humbling is the continued tangible financial support shareholders have shown for this project.  Since August, shareholders have contributed more than $6 million towards our goal of a marine consent, bringing the total raised over the past four years to more than $33 million.

Naturally, we all hope we will get a great return on our investment as we advance this project towards mining; but the feedback from shareholders (both in New Zealand and overseas) is they also want this project to succeed for New Zealand’s agricultural and environmental benefit, and for it to be the first successful seabed mining project in the world.

We are all pioneers in a new industry – and your project team’s focus is to ensure we will continue to be well prepared, well-resourced and expertly managed.  The reason we receive such support from both shareholders and our many other well-wishers is we have a strong group of leading experts in their respective fields, who have designed such a powerful proposition that they have made the job of sourcing the necessary funding comparatively easy.

The hearing

We have now (we hope) concluded the 26 days of hearings over seven weeks.  The Decision-Making Committee will formally close the hearing once they are confident they have all the necessary information to make a decision.  Chair Neil Walter indicated that the assessment of completeness for the decision would largely focus on our comprehensive draft conditions.  

We’re still hoping for a pre-Christmas decision. Whatever the time frame, the latest tranche of money raised – thank you for your enthusiastic support - gives us enough to keep the wheels turning in the New Year if we need to wait a bit longer.

The Committee will consider four decision options – from a full grant for what we applied, to a decline.  We told the committee there was ample evidence for full approval to mine for up to 35 years across the marine consent area. We said the option of trial mining is not financially feasible because of how much money we have invested already and the further capital involved in building a suitable vessel.

Asked whether an option to grant consent for the smaller, already granted mining permit area for 15 years was workable, we said it was not our preference, because of future consenting costs and process. We noted that this option would involve legal and practical issues such as undertaking monitoring in a wider area, and providing for mining exclusion zones.

We’ve provided shareholders with regular updates on the hearing process, including our views about its shortcomings – particularly relating to the staff reports.  Overall we think the process works, though it is expensive, time consuming and has imperfections.

We recognise we are only the second seabed mining application using the new Exclusive Economic Zone law, so the process is still being bedded in.  For example, we think the Crown played a useful role in our hearing process with its submission, but were disappointed – given what it calls its growth agenda (including exports) - it did not advance the wider economic impacts of the project, and simply focused on conservation issues.

In summary, our key messages are:

  • our proposal involves very limited environmental risks in a small area;
  • it has economic, strategic and environmental benefits;
  • it will not harm any other industry or resource user in New Zealand's economy;
  • the few material environmental risks can be managed by conditions;
  • our proposed impacts are minuscule compared with those of fishing, which should be taken into account in considering our application;
  • our models are based on significant data, which can and will be further validated; and
  • Benthic Protection Areas should be replaced by more refined protected areas.

In summary, the project offers new environmental benefits for New Zealand’s farming industry, by using a low cadmium, low carbon footprint, low run-off, potentially organic product. It will create a new industry with strong ties to agriculture - New Zealand’s most important export earner. CRP’s product will enhance security of supply and reduce exposure to politically risky sources of a critical input to New Zealand’s biggest industry.

Financing

While the primary focus of the period under review has been the marine consent process, the companion to that has been continuing to finance the costs.  Consenting is an expensive process – the company’s shareholders pay for all of the relevant costs of the Environmental Protection Authority, as well as our own.  In addition, your money has been invested in a range of scientific reports, witness costs and of course the cost of the legal guidance we have received.

Our best success in raising capital over the past year has come from ongoing strong support from our Kiwi shareholders, plus a small group of overseas investors – mainly from the United States and more recently from Britain and Australia – complementing the earlier investments from corporate sources such as our technical partner Boskalis and from Odyssey Marine.

We’ve had little success from our two attempts so far at a broader public offering.  Perhaps it’s arguably too early in the process – certainly most institutional investors tell us to “come back when you are permitted”, even though the share price will likely be much higher when the project is “de-risked”.  However, local financial markets seem to have far more appetite for raising substantial capital for early stage “tech” projects, than a proposition such as ours.

Broader financial markets are obviously much less informed than our loyal shareholders.  So they are more unnerved when there is bad news.  Our efforts for an Initial Public Offering and listing on the London AIM market were severely damaged by the negative decision regarding Trans Tasman Resources’ application for a marine consent.

Our decision to go to the London market was based on considerable enthusiasm for our project earlier in the year.  But as most experienced investors know, markets run hot and cold – and it doesn’t take much sometimes to change sentiment.

Thus, we ultimately made the decision our AIM IPO would not fly in 2014, though we remain determined to list our shares – given their unique appeal – on an international market in 2015.

The future

While the hearing process and financing have been our main areas of focus this year, we are also working on a range of other areas. We are talking with Boskalis to advance our contract discussions and Najib Moutia continues to undertake sales development work through his amazing array of international industry contacts.   We’re also conducting pot trials of our product to validate the positive findings of the extensive testing undertaken in earlier years, among other research work. 

We remain very confident we have done what it takes to get environmental approval for our project.  It’s been a bit like a golf tournament: we’ve done the preparation, we’ve played every shot with care and precision and the ball has generally landed where we wanted it.  Ultimately we – including all our loyal shareholders – have done everything we can to win the prize.

We can’t determine the outcome – but we definitely deserve to win. 

Chris Castle                                                                                                      Robert Goodden

Managing Director                                                                                           Chairman

 27 November 2014

 To download this announcement as a PDF - click here