Completion of Merger

16 March 2017

AUCKLAND New Zealand – Chatham Rock Phosphate Limited (formerly “Antipodes Gold Limited”) (TSXV: “NZP” and NZAX: “CRP” or the “Company") is pleased to announce, further to its news release of February 24, 2017, that it has completed the acquisition of the remaining 7% of the issued shares of Chatham Rock Phosphate (NZ) Limited (“CRPNZ”).

These acquisitions were completed by way of a combination of processing additional acceptances of the takeover offer received by the Company and by way of compulsory acquisition procedures under the provisions of the (New Zealand) Takeovers Code.  As a result, the Company now owns 100% of the issued and outstanding shares of CRPNZ and its NZAX trading symbol has been changed from AXG to CRP.

In total, the Company issued 12,272,776 common shares to the former shareholders of CRPNZ in consideration for the acquisition of a 100% interest CRPNZ. Following completion of the 10:1 share consolidation, the takeover of CRPNZ and the debt settlements described in the Company’s news release of February 24, 2017, the Company now has a total of 13,627,813 issued and outstanding common shares and Mandatory Warrants exercisable into an additional 379,214 common shares.

Antipodes Gold was renamed Chatham Rock Phosphate on February 24, 2017 and now owns the “old” Chatham Rock Phosphate 100%.  It is business as usual for the combined company.

The “new” Chatham Rock Phosphate is stock exchange listed in both New Zealand and Canada, with its primary listing being on the TSXV in Canada where its trading symbol is NZP.  Since the reconstructed company started trading in Canada sales have been at 68 and 70 cents.  In NZ currency terms the most recent sale price of 70 in Canada is equivalent to 75 cents.

In New Zealand, the last sale price on the NZAX, pre-merger, was $0.09 implying a post-merger share price of 65.59 times that, or 59 cents.  Subsequently there have been small sales here in NZ at 50, 48 and 43 cents.  To summarise, our shares are trading at 43 cents in one market and 75 in the other.

This anomalous situation is not desirable but also not unusual in dual listed stocks as investors in one market are not necessarily aware of the market price in the other.  

In order to better inform our shareholders, the home page of Chatham’s website (www.rockphosphate.co.nz) now has links to our market prices on both markets.  Just click the links on the right hand side of the home page.

Please call me or e-mail me if this is not clear and I will be pleased to help.

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

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 Update March 2017

Update

March 2017

A new era for Chatham Rock Phosphate

I write this as I meet with existing and prospective shareholders on a visit to investors in Europe. 

Then I’m off to the PDAC (Prospectors and Developers Association of Canada) convention, held in Toronto starting Sunday 5 March. (Our booth number if you are passing is #2752.)   Our attendance each March is a great opportunity to talk to investors and others with an interest in our project.  The timing is perfect given we have just completed the friendly takeover of Antipodes Gold to enable our listing on the Toronto venture exchange.

 

Welcome to Antipodes Shareholders

This letter is partly to provide Antipodes shareholders with some background regarding the company they have now inherited.  I am very pleased to welcome about 1000 Antipodes shareholders to add to a similar number of CRP shareholders, many of whom have shared our vision for more than a decade.

We are a company with significant forward momentum to become a key player in the world market for low-cadmium reactive rock phosphate, basing this initially on our unique phosphate deposit on the Chatham Rise. But more about that later.

To all Antipodes shareholders: This update is one of a series we regularly send out to our shareholders, usually by email in the interests of efficiency and saving costs. This is being posted to you with a request for you to provide your email address so I can communicate directly with you in that manner.

Please send an email to me at chris@crpl.co.nz with subscribe in the title and I will add you to our email list. Our newsletters come from me, as I believe in communicating directly with our shareholders, and I encourage and welcome feedback. You will not start receiving automated responses from our website.    With this note I also attach a fact sheet.

This fact sheet and our latest investor presentation can be found on our website, www.rockphosphate.co.nz which I encourage you to visit.  It will provide you with a great overview of who we are.  The direct links to these documents are

http://www.rockphosphate.co.nz/s/CRP-Fact-Sheet-23-Feb-2017.pdf 
http://www.rockphosphate.co.nz/s/CRP-Feb-26-2017-Presentation.pdf

 

CRP vision based on numbers and beliefs

CRP is a highly unusual mining company in that our mining project has a very strong list of environmental benefits to add to an impressive array of ethical, financial and economic pluses.  The following market analysis adds to our many other compelling reasons to invest.

Contract sale prices of 30% P205 (phosphate) ex Morocco are presently $US120, significantly higher than the $US99 figure usually quoted by the World Bank. Once freight to Asia of $US30 is added, the landed cost is $US150. 

If sold to make superphosphate in New Zealand, the value of CRP rock is presently around $US110.  However if sold as reactive phosphate rock (RPR) – an organic product – the retail value in New Zealand is $US255. If sold internationally as RPR the estimated price is about $US150 ($US40 over the value of the rock based on phosphate content. This is because RPR is as effective on pasture land as TSP (triple superphosphate) which costs up to $US160 more that SSP (single superphosphate).

Based on these market behaviours and the range of the other information we continue to gather, we are convinced the demand for RPR will continue to grow in parallel with the demand for organic products.

But wait there’s more!   Chatham rock phosphate is ultra-low in heavy metal cadmium (< 10 mg/Kg P2O5).  This will be of huge additional value once the European Union sets a 60mg/Kg P2O5 cadmium limit in 2019.  We understand this will eliminate all rock sourced from Egypt, Israel, Boucraa (Morocco), Youssoufia, Senegal, Togo, Tunisia, Nauru & Christmas Island.  

Analysts consider this will result in initial price premiums of $US30 - $50 for low-cadmium sources of rock phosphate.  When the European Union cadmium limit is further lowered to 20 mg/Kg P2O5 in 2030, it will eliminate other sources and increase the premium further. The following shows the compelling financial reasons why our product is so good.

In a nutshell

Based on this logic, we believe selling high quality RPR with ultra-low cadmium will become a very profitable business and a major contributor to the New Zealand economy as well as being ethically and environmentally on the side of the angels.

The following graphic is a summary of our key benefits.  You will see low cadmium is mentioned as just one benefit.  The premium being paid for RPR (which we think can only increase) is one of the contributors to our very strong forecast profitability

You can be our advocates whenever our project is raised in conversation.  To remind you why we continue to believe the Chatham Rise project remains hugely important, here are the key reasons: 

 

To recap on progress so far in 2017:

Operations: The CRP team has undertaken a major stock take of where the Chatham Rise project is currently sitting and to plan next steps. An independent environmental specialist provided a gap analysis of the project in order to optimise our resubmission strategy.  A  resulting two-day planning session identified a large number of actions. While the stock take showed we’re in pretty good shape, there’s still a huge amount to do for a second application. Once we’ve firmed up a couple of key issues, we’ll provide an update on timeframes and the scope of the work required.

Watching TTR: We’ve been attending key parts of the Trans Tasman Resources hearing in Wellington to help inform our strategy.  TTR is reapplying for a marine consent to mine iron sands off the Taranaki coast. Its hearing started on 16 February and is currently scheduled to finish on 20 March, with a decision due after a further 20 working days.  The Environmental Protection Authority, which is running the application process, is regularly updating its website regarding the application.  Check out: http://www.epa.govt.nz/EEZ/whats-going-on/current-applications/ttr-2016/Pages/default.aspx

Dutch Government research grant: CRP and its Dutch technical partners Boskalis and Deltares have received Dutch government research funding to improve the environmental management of marine mining.  The increased global interest in marine mining has highlighted the need to develop tools ways to predict, adaptively manage and reduce the environmental effects of marine mining. The research will investigate the behaviour of re-deposited material using state of the art laboratory analyses and computer modelling to assess the plume dispersion and the continuous process of settling, deposition and bed formation of sand and silt. The results will reduce uncertainties regarding predicting re-suspension and dispersion of the material being returned to the seabed.  The Dutch Ministry for Economic Affairs stimulates public-private partnerships between research organisations and companies by awarding funds to reviewed high quality research proposals.  The results are being developed using the vast amount of data already available for the Chatham Rise marine mining project, but will have direct relevance to all projects in the offshore mining and dredging industry.

 

Looking ahead

Over the coming months I look forward to meeting some of our new shareholders.  Our annual meeting is an opportunity to get together and we normally hold that meeting in Wellington in late July.  We will provide you with some pre-warning so you might be able to combine a trip there with meeting other shareholders.

In the meantime, if you have any questions, please email or call me.

Regards

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

Takeover Update and De-listing of CRP

24 February 2017
Takeover Update and De-listing of CRP

On 23 December 2016, Antipodes Gold Limited (AXG) launched a takeover offer (Offer) for all of the equity securities in Chatham Rock Phosphate Limited (CRP). The Offer is now unconditional and AXG holds acceptances under the Offer in respect of more than 90% of CRP’s voting securities.  

In accordance with the Takeovers Code, AXG will compulsorily acquire the CRP equity securities that have not, to date, been accepted into the Offer.  To this effect, AXG issued an acquisition notice under the Takeovers Code on 21 February 2017.

This acquisition notice has been sent to all CRP shareholders that have not accepted the Offer. This notice together with the Offer document and target company statement prepared under the Takeovers Code can be viewed under CRP’s market announcements at https://www.nzx.com/markets/NZAX/securities/CRP

On 15 March 2017, the compulsory acquisition process will be completed.  On this date, CRP will become a wholly-owned subsidiary of AXG and accordingly CRP intends to de-list from the NZX Alternative Market after the close of market on this date.

In anticipation of this delisting, trading in CRP shares will be suspended on the NZX Alternative Market after the close of market trading on Tuesday, 28 February 2017. CRP shareholders that have not accepted the Offer are able to trade their shares prior to the suspension of trading. Please note however that under Part 7 of the Takeovers Code, AXG now has the right to compulsorily acquire all outstanding CRP shares that it does not already own or control.

The full timetable for the de-listing follows.

For and on behalf of the Board,
Chris Castle
Managing Director

Date and Time Event
21 February 2017 Compulsory acquisition notice sent by AXG to all outstanding shareholders to compulsorily acquire their CRP shares pursuant to the Takeovers Code.
After close of market trading on 28 February 2017 CRP shares become suspended from trading on the NZX Alternative Market.
11.59pm on 14 March 2017 Deadline for outstanding CRP shareholders to return a completed instrument of transfer under the compulsory acquisition provisions of the Takeovers Code (note: instructions for returning an instrument of transfer and consequences for not returning it by this time are set out in AXG’s announcement of 21 February 2017 – see link to the relevant document attached to this announcement here: https://www.nzx.com/files/attachments/253410.pdf).
15 March 2017 Date by which AXG will complete the compulsory acquisition process.
15 March 2017 Date CRP will be delisted from the NZX Alternative Market.

Notice of Offer Becoming Unconditional

Dear Chatham Rock Phosphate shareholders,
We received this letter from Antipodes Gold yesterday. 

 
17 February 2017
 
Chatham Rock Phosphate Limited
Level 1, 93 Terrace
Wellington, 6011
New Zealand
 
By email:  chris@widespread.co.nz
 
RULE 49C(3) NOTICE OF OFFER BECOMING UNCONDITIONAL
 
We refer to the offer by Antipodes Gold Limited (AXG) for a full takeover for all of the equity securities in Chatham Rock Phosphate Limited (CRP), dated
23 December 2016 (Offer).
 
AXG hereby gives notice that:
 
•    AXG has received acceptances in respect of CRP's fully paid ordinary shares which, on registration of the transfer of those ordinary shares will result
in AXG holding or controlling 50% or more of the voting rights in CRP;
 
•    AXG waives the condition in paragraph 5.1.1 of the Offer document which requires it to obtain acceptances in respect of 90% of CRP's voting securities; and
 
•    AXG confirms satisfaction of the conditions contained in paragraph 6.1 of the Offer document.
 
Accordingly, the Offer is now unconditional in all respects. In accordance with the Takeovers Code, AXG will be transferred the CRP shares held by
acceptors of the Offer and will issue new AXG shares to those acceptors within 7 days.
 
At present AXG has received acceptances under the Offer of approximately 87.53% of CRP's voting securities and in respect of all of its non-voting
securities. AXG understands that further acceptances of approximately 2.5% are likely to be received in the coming days. Accordingly AXG expects to
exceed a 90% level of acceptance of voting securities by the end of next week and then commence the compulsory acquisition procedure under the Takeovers
Code.
 
For and on behalf of Antipodes Gold Limited
 
Peter Liddle
Chief Financial Officer
 
 
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

 

Shareholder Update, February 2017

2017 Roadmap

To start off the New Year, the CRP team convened to undertake a major stock take of where the project is currently sitting and to plan next steps. 

As part of this we contracted an independent environmental specialist to undertake a gap analysis of the project to order to optimise our resubmission strategy.

A two-day session in Wellington last week proved highly stimulating, providing masses of food for thought and resulted in a large number of actions.

While the stock take and resubmission strategy showed we’re in pretty good shape, there’s still a huge amount to do for a second application.

It’s too early to provide a time frame yet but we are all focused on the various requirements.  Once we’ve firmed up a couple of key issues, we’ll provide an update on timeframes and the scope of the work required. 

 

Watching TTR

To help inform our strategy, we continue to closely follow progress of the Trans Tasman Resources’ reapplication to mine iron sands off the Taranaki coast. 

The hearing is due to start on 16 February and could take up to two months, with a decision due after a further 20 working days.  These timeframes are indicative.

The Environmental Protection Authority, which is running the application process, is regularly updating its website regarding the application.  Check out:  

 

Friendly Takeover

We now have acceptances totalling 83.6% for the reverse takeover of CRP by Antipodes Gold.  We have extended the offer so we can get to the 90% mark and will then be able to compulsorily acquire the final few shares.  

We’d really like to wrap this up as quickly as possible so encourage you to file your acceptance as soon as possible so we can start focusing on our Marine Consent reapplication. Every acceptance makes a difference right now. 

The aim of this transaction is to be listed on the TSX Venture market in Canada. The Board considers that obtaining an overseas listing in a recognised mining market will help facilitate future financings and liquidity in CRP’s shares.

CRP shareholders are being offered one share for every 65.59 CRP shares held, following a 10:1 consolidation by Antipodes Gold. At today’s market price in Canada the offer is effectively worth CAD 50 cents (or NZD 52.6 cents) for 65.59 shares or .8 cents per share. This is at a premium over recent market prices for CRP shares. 

When Antipodes acquires 100% of CRP’s shares, the final percentages in the company once the Offer is complete will be as follows:

Shareholder Group Securities on issue following completion of Offer Percentage
CRP shareholders 12,651,967 90.33%
AXG shareholders 1,355,017 9.67%
Total 14,006,984 100%

PDAC

CRP will have its annual presence at the PDAC (Prospectors and Developers Association of Canada) convention, held in Canada every March. Our booth number if you are passing is #2752.

While the weather is generally bitterly cold, our attendance each March is a great opportunity to talk to investors and other parties with an interest in our project.  Our upcoming listing in Toronto also makes it excellent timing.  I’m combining the trip with a visit to existing and potential investors in Europe.

 

Dutch Government research grant

Chatham Rock Phosphate and its Dutch technical partners Boskalis and Deltares have received Dutch government research funding to improve the environmental management of marine mining. 

The increased global interest in the economic and environmental outcomes of marine mining for resources such as phosphate, manganese nodules and polymetallic sulphides has highlighted the need to develop tools and methods to predict, adaptively manage and reduce the environmental effects of marine mining.

The research project will investigate the behaviour of re-deposited material using a combination of state of the art laboratory analyses and computer modelling to assess both the plume dispersion and the continuous process of settling, deposition and bed formation of sand and silt. The results will reduce the uncertainties regarding predicting re-suspension and dispersion of the material being returned to the seabed.

This jointly developed project will make computer models of plume dispersion more realistic and will look at ways to adaptively manage re-deposited sand and silt in deep water. Additionally, the project will investigate the use of flocculants, natural materials that can be added to the returned sand and silt to make the sediment plume settle from the water more quickly. This may be the first time flocculants have been considered for deep water mining or dredging.

The Dutch Ministry for Economic Affairs stimulates public-private partnerships between research organisations and companies by awarding funds to reviewed high quality research proposals. 

The results are being developed using the vast amount of data already available for the Chatham Rise marine mining project, but will have direct relevance to all projects in the offshore mining and dredging industry.

 

In a nutshell

You can be our advocates whenever our project is raised in conversation.  To remind you why we continue to believe the Chatham Rise project remains hugely important for New Zealand, here are the 5 key reasons: 

The benefits
1. Environmental benefits
  • much lower run off to lakes and rivers
  • very low cadmium
  • much lower carbon footprint
2. Security of fertiliser supply for farmers
  • enables New Zealand to have its own supply without depending on other countries
3. An ethical source
  • New Zealand’s main source of phosphate is from a disputed territory
  • not exporting our environmental footprint to countries mining phosphate where it involves severe social and environmental distress
4 Highly profitable
  • forecast annual earnings of $90 million before royalties and tax, with low mining costs - equivalent to shipping cost
5. Good for New Zealand
  • $34 million in annual taxes and royalties, millions in port charges
  • high-value, knowledge-based jobs in the port, on the mining ship, doing environmental
    monitoring and scientific research, in agriculture and hospitality and the Chatham Is
  • New Zealand could become a world leader in marine technology and expertise potentially worth billions of dollars
  • our work at sea enhances knowledge of our marine environment to help identify areas most deserving of conservation

Regards,

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

 

 

Antipodes Gold Limited Takeover Offer for Chatham Rock Phosphate Limited

Dear Shareholders

Firstly, thank you to the 466 CRP shareholders, holding approximately 73% of shares, who have already accepted the Antipodes takeover offer (Offer).

And, another thank you to those shareholders who have contacted me with queries about the Offer. While there was a swathe of documentation sent to shareholders in relation to the Offer, sadly this was a legal necessity.

Given the queries received to date, the purpose of this letter is to help provide a clear summary of the purpose, method and terms of the Offer.

Purpose of Offer

In a nutshell, the Offer will, if successful, result in CRP acquiring Antipodes’ remaining cash and its TSX-V listing, for about 10% of CRP’s capital.

Antipodes is a cashed up shell company with no current business interests or activity (apart from the Offer). However, it is listed in Canada on the TSX Venture Exchange (TSX-V), recognised by many as a pre-eminent mining market. Combined with the residual cash it holds, Antipodes has been valued under the Offer at $575,109.

CRP, listed on the NZX Alternative Market (NZAX), has a significant business activity in seeking to secure the marine consent for the Chatham Rise phosphate resource and to then proceed to development and mining. CRP is valued at $5.3 million under the Offer.
That means CRP is valued at close to 10 times the value of Antipodes for the purposes of the Offer.

Completion of the Offer will list CRP on a market (TSX-V) where the ability of CRP to access capital from international investors should be enhanced. Approximately 44% of CRP’s shares are already held by overseas based shareholders. This is precisely why CRP directors initiated and support this transaction. International investors have been vital for capital to date and are expected to remain so in the future.

Method

The Offer is referred to as a Reverse Takeover Offer (RTO) because Antipodes will need to issue so many shares, CRP shareholders will end up being the dominant shareholders of Antipodes following completion of the Offer.

If the Offer is completed and all CRP shareholders have accepted, CRP shareholders will hold over 90% of the enlarged Antipodes capital. Antipodes will have CRP as a subsidiary and change its name to “Chatham Rock Phosphate”. In essence, AXG becomes CRP.

Terms

How was the comparative offer ratio arrived at? As explained in the Offer document (and commented on in the Independent Advisor’s report), the methodology to calculate the relative values of the CRP and Antipodes for the Offer was agreed in July 2015. It took the ensuing months to resolve various approvals and legal requirements.

As of 8 December 2016, that calculation derived a ratio of one Antipodes share for each 65.59 CRP shares after Antipodes shares consolidate on the basis of one new share for every 10 old shares. With AXG shares currently trading at 4.5 Canadian cents per share (NZ4.7 cents), post the Offer and consolidation this would translate to each AXG share that a CRP shareholder receives under the Offer having a market value of 47 NZ cents. In simple terms, CRP shares are consolidated through the course of the Offer.

The CRP directors suggest that shareholders assess the merits of the Offer on the basis of the
dilution cost to CRP shareholders. The Offer will dilute CRP shareholders by 9.67%. For that dilution cost CRP obtains the foreign listing and cash. The CRP board considers that the benefits of the Offer outweigh the ‘cost’ of this dilution.

While CRP shareholders are following the relative share prices of the two companies, ultimately the share price of the renamed TSX-V-listed Chatham Rock Phosphate will be a function of how the Canadian (and world markets) assess the value of CRP’s phosphate assets.
It would be logical that post-merger the market capitalisation of the combined company could soon reflect the market value before the merger proceeded (being $8.3 million for CRP) and the value attributed to Antipodes ($573,000).

Most CRP shareholders have recognised this is a good move for CRP to take and have accepted the Offer. The directors of CRP support the Offer because it will achieve a cost-effective overseas listing of CRP on a market with more direct access to international investors.

I encourage you to do as I, my fellow directors and our major shareholders have done, and accept the Offer.

Although the closing date for the Offer is now 28 February 2017, shareholders are encouraged to accept the Offer as soon as possible rather than waiting for a date closer to the closing date. This is important as CRP desires to complete the merger quickly in order to recommence activities that have been halted for several months by the merger process.

As always, please address any remaining concerns to me and I will respond.

Chris Castle
Chief Executive
chris@crpl.co.nz, + 64 21 558 185

Interim report to shareholders for the 6 months to 30 September 2016

Financial Result 

 Your directors submit the unaudited financial statements of Chatham Rock Phosphate Limited (CRP) for the six months to 30 September 2016. The trading result for the period was a loss of $468,831  (2015 loss of $398,076). An analysis of the result is provided in the table below  

6 months to 30 Sept 2015 6 months to 30 Sept 2016
Income 16 3,033
Expenses (398,092) (471,864)
Net Profit (loss) before income tax (398,076) (468,831)
Income tax - -
Net profit (loss) after tax (398,076) (468,831)

The increased deficit for the six months to 30 September 2016 can be largely attributed to legal fees relating to the TSX.V listing/merger and the disputes with NZPaM (permit fees over-charged 900%) and the EPA cost recovery billing dispute. These are all one-offs and not expected to continue.
 

Fundraising 

We’ve achieved some very satisfying milestones during 2016.  The highlight has been raising sufficient new capital to continue to progress our projects for the next 15 months. 
 
Our share purchase plan seeking $600,000 was oversubscribed.  Thank you everyone who subscribed, many sticking with us for several years and continuing to share our faith in our ultimate success. 
 
We’ve also made various share placements to qualified investors (new and existing) over recent months and are also delighted to have new cornerstone shareholders from Malaysia, Switzerland and Germany.   
 
Since the initial rejection by the Environmental Protection Authority of our marine consent application in February last year we have raised $3.7 million – despite our share price having been slaughtered. 

While we’ve had to dilute some existing shareholders to keep Chatham functioning by raising capital at much lower prices, we believe preserving some value and delivering on our goals will ultimately produce strong returns for all shareholders. 
 
Our ability to raise money against the odds underscores the fundamental attractiveness of the Chatham Rise project and the perceptiveness of our ever-enlarging shareholder base.   Directors and management interests, along with our two new cornerstone investor groups, now each hold about 13% of the company.   
 
The present share price of 0.9c values Chatham at $7.5 million – less than a fifth of our market value in February 2015. We believe Chatham is now in a stronger position than it’s ever been due to the knowledge gained during the marine consent application process.  

 

Takeover Offer 

This week we received a notice of takeover offer from Antipodes Gold which will enable Chatham to list on the Toronto Stock Exchange. The actual takeover offer will be despatched just before Christmas and we are expecting that the process will be largely completed by the end of January 2017. 
 
Antipodes approved the proposed reverse takeover of Chatham a year ago, by July we had secured funding to operate until the end of 2017, and have subsequently been engaged in the process of securing approval to merge.  We now expect the merger documents to go out within the next few days.   
 
Together with the Antipodes shell we inherit some funds associated with the merger, a Toronto director, 1,003 resources-sector shareholders in a number of countries, and a Canadian corporate support structure. This merger will strengthen Chatham, complement our New Zealand listing and provide new opportunities for existing Antipodes shareholders.  

 

Recommending Chatham shares 

During our capital raising in June we met with Geneva based investment banking firm RAMPartners SA whose analysts prepared an independent research report, which is now on our website.  
 
Key points include a buy recommendation with a price target of 50c compared with the current market price of 0.9c.  RAMPartners project value of $472 million makes assumptions relating to the market price of rock phosphate, Chatham’s production costs and relevant currency interactions. It includes a detailed examination of the permit risk Chatham still faces and the evolving factors mitigating this risk.   
 
Encouragingly the valuation also concludes our management team “has the necessary skills, ability, devotion, focus and skin in the game” to make our project work.   The full research report is available to review on our website.
 

Operational Focus 

Chatham will be reapplying for a marine consent following further consultation with stakeholders, a potential revision of the project and further research on some scientific issues.   We’re also:

  • Working with government ministries on improving the permitting process
  • Observing Trans Tasman Resources progressing on its marine consent application and taking heed of their modified approach
  • Developing trading relationships with participants in the phosphate sector  
  • Sourcing on-shore rock phosphate deposits  
  • Building farming sector, academic, industry and central government support for the use of
  • Chatham rock phosphate as an environmentally friendly product  
  • Commissioning further pot tests to be followed by field trials
  • Presenting at fertiliser, resources sector and environmental conferences. 

Both we and the EPA have learned a lot from our initial consent application.  We’re confident this will result in improved application and hearing processes and we’ll resubmit an even better application to robustly deal with the issues on which we were rejected. 
 

Chatham Rock Phosphate speaks at UMC conference

Chatham Rock Phosphate (Chatham) was a keynote presenter at the Underwater Mining conference held at Incheon in South Korea in October. Chatham CEO Chris Castle updated the scientists, marine miners, sector investors and other industry players attending the conference from 17 countries on the company’s present status and forward plans.  
 
His address, the central theme of this being that Chatham is back on track, will be re-submitting a marine consent application and is not going away, was warmly received. The project is very much on the world stage and it’s clear that the New Zealand Environmental Protection Authority’s ability to effectively evaluate marine mining proposals is under an international microscope.  
 

Chatham rock phosphate’s many benefits

We continue to believe the Chatham Rise project remains hugely valuable for all the same reasons: 

  • Environmental benefits
    • much lower run off to lakes and rivers
    • very low cadmium
    • much lower carbon footprint
  • Security of fertiliser supply for farmers
  • An ethical source – New Zealand’s main source of phosphate is from a disputed territory
  • Highly profitable – forecast annual earnings of $90 million before royalties and tax, with low mining costs - equivalent to shipping cost
  • Good for New Zealand:
    • $34 million in annual taxes and royalties
    • millions in port charges
    • high-value, knowledge-based jobs in the port, on the mining ship, doing environmental monitoring and scientific research, in agriculture and hospitality and the Chatham Is
    • New Zealand could become a world leader in marine technology and expertise potentially worth billions of dollars
    • Our work at sea enhances knowledge of our marine environment to help identify areas most deserving of conservation.

For all these reasons we remain puzzled by environmental groups which, through opposing our Chatham project, condone New Zealand importing all our phosphate needs, so exporting our environmental footprint to countries mining phosphate where it involves severe social and environmental distress. 
 

Marine mining is not new

Contrary to the proposition advanced by poorly informed anti-marine mining advocates, marine mining is not a new idea. Tin mining in Asia, diamond mining offshore South Africa and Namibia, and most significantly, aggregate mining offshore the United Kingdom and other European countries has been undertaken for several decades. In the UK and Europe the construction industry (roads, buildings, etc) relies heavily on raw materials recovered from the ocean.  
 
In parallel, maintenance dredging of river channels and port entrances has been routinely undertaken for at least a century. The environmental impact of this activity is the same, is much closer to coastal communities and has accordingly been subject to rigorous scrutiny for a very long time.
 

How the use of RPR will improve water quality in NZ

OVERSEER is a software tool widely used by New Zealand farmers and their advisors to tailor fertiliser use to optimise farm production while minimising environmental impacts.  
 
Developed originally by AgResearch, it’s now jointly owned with the Ministry of Primary Industries and the Fertiliser Association. An independent organisation, Overseer Ltd, has been licensed to use the OVERSEER IP to create a sustainable business that delivers OVERSEER to users.    
 
Recently the software application was upgraded and the latest version 6.2.3 was used to compare various farming scenarios to assess what impact changing the type of phosphate fertiliser used has on the amount of P loss to water. In all scenarios evaluated the use of RPR resulted in less phosphate loss to water than would be the case with soluble phosphate fertilisers such as Superphosphate.   
 
When OVERSEER was used to compare various farming scenarios the P loss was on average 18% lower when RPR fertiliser was used compared to using Superphosphate.  According to independent studies, changed farming practices resulting from using RPR over an extended period could result in up to 80% less phosphate run-off.   
 
This advance provides more evidence for farmers and their advisors that RPR offers a more environmentally friendly source of phosphorus to New Zealand farmers. Over time this should result in increased use of RPR as it is substituted for superphosphate and other phosphate fertilisers. 

This is very relevant to Chatham Rock Phosphate because our rock phosphate is a particularly effective form of reactive rock phosphate, demonstrated by extensive field trials undertaken in the mid-1980s and reinforced by recent tests.  
 
As well as representing a secure local source, Chatham Rise-sourced RPR contains ultra-low levels of cadmium levels and creates far fewer carbon emissions, so has a much lower carbon footprint than current northern hemisphere supplies. 
 
As the Chatham Rise deposit will likely not be mined until 2020, we have identified several overseas sources of RPR and can import this rock on request. We are already working with a private New Zealand-based fertiliser company to satisfy the existing demand for reasonably priced material.
 

Spreading the risk

We’re confident we will get environmental approval next time, but we want to broaden our investor appeal by becoming a more diversified operation so not all our eggs are in one basket.   
 
As well as the five marine applications in Namibia, we are developing relationships with other players in the market, maintaining our relationship with Boskalis, looking at other projects and entering the phosphate trading market. 

 
Looking Forward

The second half of this financial year should see CRP make significant progress including the merger with Antipodes Gold (and the associated TSX.V) listing, achieve further progress toward the resubmission of our marine consent application, and a further fundraising programme in order to finance the reapplication. 

Chris Castle,  Managing Director
Robert Goodden, Chairman  
December 22, 2016

NZX Announcement: Receipt of Takeover Notice

8 December 2016
Receipt of Takeover Notice

Pursuant to Rule 42 of the Takeovers Code, Chatham Rock Phosphate Limited (NZX:CRP) gives notice that it has today received notice (Takeover Notice) under the Takeovers Code from Antipodes Gold Limited (Antipodes) of Antipodes’ intention to make a full takeover offer for 100% of the equity securities in CRP (Offer).
Please see attached a copy of the Takeover Notice and the documents that accompanied it under Rule 41 of the Takeovers Code.

Background to Offer

Shareholders will be aware that CRP has been working with Antipodes for some time to proceed with the Offer. The Offer is in effect a reverse takeover. In particular, if the Offer is successful it will have the effect of CRP having its primary listing on the TSX Venture Market in Canada with a secondary listing on the NZAX market in New Zealand.
The Board considers that obtaining an overseas listing in a recognised mining market is in the best interests of CRP and should help facilitate future financings and liquidity in CRP’s shares.

CRP Board Response

In response to the Offer, the Board of CRP has:

  • formed a committee of independent directors (Independent Committee), comprising Robert Goodden, Robin Falconer and Jill Hatchwell to consider the Offer and to oversee preparation of the target company statement.
  • appointed Northington Partners Limited to prepare the independent report required under the Takeovers Code on the merits of the Offer.

It is intended for the Northington Partners’ independent report and the target company statement sent to CRP shareholders together with the finalised Offer document just prior to Christmas.

Offer Terms

Please carefully review the Takeover Notice and the other documents provided by Antipodes, as these documents set out the terms of the Offer. For convenience we set out below certain material terms of the Offer as drafted:

  • Antipodes is offering CRP shareholders common shares in Antipodes (Consideration Shares) in consideration for their CRP shares.
  • CRP shareholders will be offered one (1) Consideration Share for every 65.59 CRP shares held. Antipodes will complete a 10:1 consolidation of its common shares immediately prior to issuing the Consideration Shares. If the Offer is successful and Antipodes acquires 100% of CRP’s equity securities, the final shareholding percentages in Antipodes following completion of the Offer will be as follows:
Shareholder Group Antipodes securities on issue
following completion of Offer
Percentage
CRP shareholders 12,651,967 90.33%
AXG shareholders 1,355,017 9.67%
Total 14,006,984 100%
  • The Offer is conditional on acceptances representing 90% of all CRP shares. Antipodes does however have the ability to waive this condition to 50% in accordance with the Takeovers Code.
  • The Offer is intended to open on 23 December 2016 and remain open until 5pm on 31 January 2017, unless extended in accordance with the Takeover Code.
  • If the Offer is successful the CRP Board would essentially replace the current Antipodes Board and Antipodes will change its name to Chatham Rock Phosphate. CRP will inherit net cash held by Antipodes of approximately $250,000.

Next Steps

The Independent Committee will further consider the merits of the Offer following receipt of the independent report from Northington Partners and will revert to shareholders with a recommendation in accordance with the Takeovers Code in the next two weeks.

For and on behalf of the Board,

Chris Castle
Managing Director