Final Announcement for the year to 31 March 2016

Financial Result
Your directors submit the audited financial statements of Chatham Rock Phosphate Limited (CRP) for the year to 31 March 2016. The trading result for the period was a significantly reduced loss of $818,000 (2015 loss of $27.3 million, after recognising $18.7 million impairment losses), reflecting in the main cost saving measures introduced after the marine consent application was declined.
Corporate Milestones
As reported in our regular shareholder updates and other announcements made during the year CRP is very actively moving on a number of fronts despite an overall reduction in available management time.
Most pleasingly, we’ve continued to raise the money we need to remain viable and to maintain our momentum.
Over the past few months there’s been a steady stream of support from shareholders and new investors keen to support our plans. In total we have now in the last 14 months raised or secured firm commitments for $3 million.  This is a remarkable achievement given both the major setback in our circumstances in February last year and the very weak resource market conditions prevailing during most of the ensuing period. 
Our ability to raise this level of funding against the odds speaks volumes about the fundamental attractiveness of the Chatham Rise project and the perceptiveness of our ever-enlarging shareholder base.  
Our directors and other associated interests are now a substantial shareholder in Chatham and recently two new overseas-based cornerstone shareholders have joined us, each holding about 15% of the Company. 
Thank you all for your continued support and your faith in the company’s prospects.
As announced in April 2015, our funds position will also be aided by tapping into some capital associated with the merger with Antipodes Gold, which we’re doing in order to list on the Canadian TSX-V market.  Antipodes is also listed in New Zealand so shareholders will enjoy the best of both worlds in terms of increasing liquidity of our shares and having access to a broader investor base.
The Antipodes Gold shareholders have (in November 2015) approved the proposed reverse takeover of Chatham, and for a change of name (of the merged group) to Chatham Rock Phosphate Limited. The merger is expected to proceed as soon as Chatham’s recently announced Share Purchase Plan is completed given that we are now in a position where we have secured sufficient funding to operate until 30 September 2017 in accordance with our business plan.
The reverse takeover of Chatham is expected to be completed by 30 September 2016. 
As advised previously, the transaction does not signal that Chatham is going into the gold mining or exploration business - we are merely using the Antipodes “shell” to achieve an overseas listing.
Together with the shell we inherit an experienced and well-connected Toronto-based director, 500 resources-sector shareholders resident in a number of countries, and a local Canadian corporate support structure. This merger will strengthen Chatham, and usher in a new chapter for the existing Antipodes shareholders.  

Operational Focus
We have been steadily working through the steps required before we resubmit our application for a Marine Consent. These include:
1.       Reviewing the previous application to EPA, as part of this we commissioned a 360 degree review from the key players involved in the last application.

2.       Working with officials in various government ministries to seek efficiencies in the permitting process – the recently announced Resource Legislation Amendment Bill has the potential to achieve these.

3.       Keeping a close watch on the actions of Trans Tasman Resources. Encouragingly TTR has already announced it intends to reapply for a Marine Consent, and it appears likely this application will proceed under existing legislation.

4.       Investigating and advancing trading relationships with other participants in the phosphate sector

5.       Advancing towards sourcing reactive rock phosphate from several well located on-shore deposits

6.       Continuing to build farming sector, academic, industry and central government support for the Chatham Rise project and for the use of Chatham rock phosphate as a sustainable, environmentally friendly phosphorous source.

7.       As part of this we’ve commissioned further pot tests to be followed by field trials

8.       Attempting to resolve the fee dispute with EPA (unsuccessful so far)

9.       Seeking a refund of overcharged mining permit fees with New Zealand Petroleum & Minerals (looking increasingly likely to succeed)

10.   Being actively involved and frequently invited to present at fertiliser, resources sector and environmental conferences.

Chatham Rise Project Still Key

While we did not succeed with our initial consent application, much has been learned by both us as an applicant and by the Environmental Protection Authority. We are confident this experience will valuably be translated into improved and hopefully streamlined application and hearing processes.   
Once we’re confident with the process, we’ll be able to resubmit an even better environmental permit application.  Chatham was turned down on limited, unexpected and relatively minor issues. We are confident these issues can be dealt with robustly on resubmission.
We continue to believe the Chatham Rise project remains hugely valuable for all the same reasons:
Security of fertiliser supply for the agricultural sector.
Environmental benefits such as a much lower run off impact on lakes and rivers, much lower cadmium and much lower carbon footprint.
It’s an ethical option, given that the current main source of phosphate from North Africa is from a disputed territory.
It’s highly profitable given its adjacent location (meaning we have no incoming freight costs) and low mining costs.
Our estimated mining costs are roughly equivalent to the cost of shipping competing product from the other side of the world. This means the world rock phosphate price has to collapse to near zero before we can’t compete.
Our annual forecast earnings before royalties and tax are approximately $90 million (see our previous market announcements on our financial model for the key assumptions underlying this forecast).
We’ll pay $34 million in annual taxes and royalties, plus millions in port charges and create many high value and knowledge-based jobs 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.
Our project could enable New Zealand to become a world leader in marine technology and expertise potentially worth billions of dollars. 
Our work at sea enhances the understanding and knowledge base of our marine environment to help identify marine areas most deserving of conservation.
The EPA’s decision concluded mining would have no significant impact on fishing yields or fishing industry profitability, marine mammals or seabirds.
Spreading the Risk – Our Diversification Strategy
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. 
We are developing relationships with other players in the phosphate market, maintaining our relationship with Boskalis Offshore Subsea Contracting BV (“Boskalis”) , looking at other projects and entering the phosphate trading market.
Farmer Focus
It’s important to continue to build support from a range of stakeholders including farmers, as well as others, such as relevant government agencies.
Not surprisingly in the current circumstances, targeting the farmer market for capital has had limited success in dollar terms but we decided, given they’re such an important target audience, we need to keep building our stakeholder relationships.
We continue to remind farmers, many of whom are currently under siege financially, our product is both a green option and one that could save them money, bearing in mind Chatham Rise phosphate requires less-frequent application and has high liming characteristics.
We remain puzzled by the view of environmental groups who fail to see the irony of their opposition to our Chatham project.  We don’t understand how they can condone New Zealand’s importation of all our phosphate requirements and we think it’s hypocritical to support exporting our environmental footprint to countries mining phosphate where it involves severe social and environmental distress. 

Plenty Of Upside
The present share price of 1 cent values Chatham at $6.8 million; only 16% of our market capitalisation in February 2015, immediately prior to the unexpected decline of our environmental consent.
It’s not much higher than our market value in 2010, when we had no management team, no relationship with Boskalis, no 20-year mining permit, no legislation for applying for a marine consent, significantly less knowledge about the deposit, no engineering or design work had been completed, we had no direct involvement or expertise in the phosphate market, and only $250,000 in the bank. 
Even without the environmental consent, or the certainty of gaining it, CRP’s market value topped $40 million for most of the two and a half years to 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 and judgement.  
Looking Forward
The first half of the 2016/17 financial year is expected to see CRP complete the merger with Antipodes Gold and thereby achieve the associated TSX.V Canadian listing.  We will also have an increasing involvement in phosphate trading, primarily using Vice President Marketing Najib Moutia to connect third party buyers and sellers.
The key focus of the second half of the year (Q1 & Q2 2017) is likely to be principally the preparation and submission of the next marine consent application.
Annual General Meeting of Shareholders
The 2016 AGM will be held at 5pm on Tuesday 26 July at BDO Wellington. Level 1, Chartered Accountants’ House, (previously the Tower building), 50 Customhouse Quay, Wellington.
Chris Castle                                                                                                                        Robert Goodden
Managing Director                                                                                                          Chairman
20 May 2016