In view of the significant level of ongoing activity it’s timely to provide a further project update.
Progress is being made at several levels including the financing of the project, optimising aspects of the resource recovery process, environmental aspects, market development and product enhancement.
As shareholders will be aware the immediate priority is to ensure that as many option holders as possible take advantage of their opportunity to acquire Chatham Rock Phosphate shares at 10 cents on or before 30 June 2011. At the time of writing it appears that the vast majority of options will be exercised and the funds raised will then ensure that the project retains its present momentum.
At the same time progress continues on the proposed overseas listing and associated initial public offering. The independent technical report required as a pre-requisite for the listing has been completed and drafting of the prospectus is under way. Discussions and the related due diligence process continue with several leading investment banks. We are now timetabling the IPO to take place in mid September after the northern hemisphere summer break.
Following the selection of Boskalis as our preferred provider of a recovery and separation system for the rock phosphate deposit, we are now negotiating with Boskalis to undertake detailed design, production testing and associated environmental studies.
During May 2011 we positioned oceanographic monitoring equipment within our licence area. The instruments are intended to collect information on currents, turbidity, temperature and salinity within the water column.
This data will supplement the significant body of knowledge we already hold concerning the marine environment on the Chatham Rise. During the last year we have commissioned a number of reports (prepared by NIWA) concerning most aspects of the marine environment and these will be published in due course to facilitate informed discussion about any environmental impacts of the project.
The recent announcement of the outline of an Exclusive Economic Zone and extended Continental Shelf environmental effects bill removes a lot of uncertainty for our project as it means there would be a framework that would allow all of those with an interest to contribute to decisions about how the environmental effects of resources are administered.
Discussions continue with a number of potential buyers, both in Australasia and further afield, for our product. We are encouraged by the progress now being made as the potential buyers recognise the merits of our initiative. As concerns grow over the certainty of supply of phosphate rock from the Middle East, its high cadmium levels, and the carbon emissions required to transport to this part of the world, the strategic value of the Chatham Rise rock phosphate resource asset can only continue to rise.
In a related initiative we are investigating the costs of beneficiating our product (a process that increases the level of phosphorous) to increase its marketability, both here and overseas. This initiative is being encouraged by a number of potential stakeholders in the project and may receive financial support from more than one quarter.
All in all, your directors are very pleased with progress.
Wellington, 20 June 2011