CRP Update March 2017
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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
CRP September Fact Sheet
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Update - 18th December 2014
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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:
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:
Updated presentation
We’ve updated our investor presentation and it’s on the front page of the website. For a useful overview check out:
Chris Castle, Managing Director chris@crpl.co.nz or +64 21 55 81 85
Update: EPA staff report raises questions
/22 August 2014
EPA staff report raises questions
The issuing of a staff report by the Environmental Protection Authority earlier this week was unfortunate and concerning for a number of reasons.
Though it - in the wider context - is most likely to end up being peripheral noise we remain disturbed about the circumstances of how a report of such dubious quality was issued.
While we were aware that the EPA intended to issue a report on 18 August, it was frustrating and inconvenient the report was issued without considering all relevant information and where we also believe it fails to show appropriate balance.
Its negative view on our application is poorly informed, inaccurate and fails to take account of a huge swathe of additional information we have either recently provided, or are in the process of providing.
There are countless errors throughout its 175 pages. One of the more blatant shows a photograph of a dredging mechanism that bears no resemblance to what we have planned to use from the outset. A second more concerning example is where, despite the EPA’s own expert witnesses saying there are no concerns about our proposals in various areas the report still comes down heavily with expressions of supposed “uncertainty”.
It is what we have come to expect from poorly informed critics or those deliberately distorting our proposals. But such efforts are not what we expect, or deserve from objective and professionally trained public servants.
We are concerned the report was not independently peer reviewed and that it was not accompanied by suitable explanations of its role in the marine consent process prior to its unfortunate release.
However all that aside, ultimately it is only one input into the decision-making process and one we believe will be of marginal relevance as we progress because we believe its quality and content speaks for itself.
Report timing another concern
We have also discussed the timing of the release with the EPA. We were aware of the date of the report issue but unhappy about its proposed timing. Unfortunately the EPA was determined to release its report despite this.
We were especially concerned a 175-page report was posted on the EPA website in the middle of NZX trading without any context to explain its relevance to the Marine Consent process and without CRP being given an opportunity to be in a position to advise our shareholders and potential investors.
To its credit the EPA issued a clarification regarding the purpose of the staff report, but unfortunately considerable damage had by then been caused.
It has to be said we remain puzzled about the report’s value as an input into the Decision Making Committee’s process, and why it needed to contain any conclusions or recommendations given that it had not taken account of all of the relevant information.
In addition, the views of staff cannot be tested through the Marine Consent process, because they do not give evidence. Given it is both premature and inaccurate we seriously question how it can serve that purpose and we will encourage the DMC to focus instead on the evidence presented to it.
Share price impact
Not surprisingly, some shareholders were spooked by the report (and the ensuing media coverage which of necessity was produced within a very short time), which resulted in the share price being punished. At one stage it fell to as low as 8c before recovering to around 14c. The price fall was on small volumes and we think it will recover over time.
Marine Consent process
That said, we’ve always expected the Marine Consent process would be a roller coaster in terms of our being in the limelight and people continuing to make uninformed or critical comments about the project, or cherry pick information and take it out of context.
We will keep our shareholders closely informed through these Updates to provide broader context to our regular more formal announcements. Please contact us if you have any questions, concerns, comments or ideas!
With that in mind we thought it would be helpful to provide a bit more detail about how the Marine Consent process works.
The first stage involved submitting the formal application in May after three years of intensive scientific research and widespread consultation with interested parties. After that there was a period of public submissions, completed in July, and three requests from the EPA for further information – answers to the last remaining responses are being finalised next week.
Next month we start caucusing between experts to resolve differing views on scientific evidence. After that there will be up to two months of hearings following which the DMC will form its own view and make a decision before Christmas.
It should be noted DMCs in other EPA projects have chosen not to follow staff “advice”. They are, after all, an independent body, tasked with evaluating evidence, not simply rubber-stamping the incomplete views of staff.
Since June the EPA has asked a total of 62 questions on three separate occasions, some of which have required considerable additional research or consideration. That was why we decided to extend the time frame for this part of the process by a couple of weeks because we consider that this new information is important and will address actual or perceived uncertainties. We expect it will save time later on because it should resolve a number of the concerns raised.
We remain very confident
Our view remains unchanged on our expectations of success in gaining the Marine Consent. All that has happened is that some staff at the EPA have delivered a premature and incomplete report which we encourage everyone to ignore.
Interestingly a number of shareholders have said the actions are the equivalent of the staff in a court of law publicly stating their view on the outcome of a trial before it has begun. The point here is it is of little overall relevance to the outcome, as well as being unhelpful to the process.
Chris Castle
managing director
chris@crpl.co.nz or +64 21 55 81 85
Chatham issues August operations update
/Update
August 2014
We’re well on the way
It’s been a hugely busy time at Chatham Rock Phosphate HQ with the team working in a wide variety of areas.
You may be aware we operate as a virtual team with only three people actually spending much time at the Straterra office on the Terrace. The rest of the team works either for other organisations and provide input as we need it, or they work remotely from other parts of the country and the world.
Email and phone are our lifelines. We’re in daily contact with up to 50 people around the world on any day, we’re in weekly phone contact with our technical partner Boskalis in Holland and we’re continuing to share progress with everyone from investors and media to government agencies and other stakeholders.
Marine Consent
Since our marine consent application was accepted as complete at the end of May we’ve been in a flurry of activity. The first step was receiving the first of a myriad of enquiries from the EPA to provide further information or explanation to the hefty 450-page application and its accompanying 35 reports. Sometimes it has involved clarifying something and other times it’s required us to do more work.
As we’ve worked with submitters who have raised questions or potential concerns we’ve also sought more information from scientists or other experts. Since early June the EPA has come back with two more lots of questions we’re busy working on.
In the two months since the application was lodged we’ve had submissions from nearly 300 groups and individuals, of which about a third were in favour, and two thirds not. We were absolutely delighted at the high proportion of support – with these kinds of applications you almost always only hear from the people who don’t like something, rather than those who do.
Significantly the Crown chose to make a detailed (neutral) submission with a very can-do approach – i.e. it suggested ways of overcoming concerns, rather than simply why we shouldn’t do it, just because it hasn’t been done before.
The hearings are due to run mostly over September-October and will be held primarily in Wellington, with sessions also on Chatham Island and in Hamilton, to make it easier for those submitters who asked to be heard.
Marketing
While most of our work is focused on the consent process, there’s a lot of other activity too.
We’ve been thinking ahead to when we are actually in production. A lot of work has already been done on potential markets and we’ve identified at least six countries in Asia that would use our product for four different uses.
Managing that work is our Vice President Sales and Strategy Najib Moutia, a Canadian-based Moroccan who for 30 years worked for the world’s biggest phosphate producer in his home country, building its Asia Pacific business from 0 to 90% market share.
As part of building those potential customers – and to provide some (positive!) cash flow before we get into production, we’re looking at undertaking some phosphate trading. We’re also testing some rock from companies with whom we are building alliances and considering the best uses for those products.
While any trading will be done at the wholesale end – and we see that as our primary market – we are not ignoring the possibility of moving up the value chain.
We know there are hugely greater potential returns in selling small bags of organic direct application phosphate rock from garden centres and DIY stores. So we’re researching what is currently sold and what the potential might be, starting with New Zealand, but also potentially overseas.
We’ve employed a market researcher to talk to the people in the industry on a fact-finding mission. The results so far are fascinating. We’re only at the start of a long process in building our business plan. However we do think there is huge potential for a natural New Zealand product, especially given the rising concerns about the current mix of chemical fertilisers on offer.
Boskalis
The relationship with our technical partner Boskalis continues to be a fantastic asset for CRP. Its 100-plus years of experience in the marine dredging industry and its wealth of expertise in a wide range of areas including engineering and hydronamics are invaluable. Boskalis works in 75 countries around the world and environmental and existing user concerns are always the primary focus. The company has countless examples of how it has designed a way of doing something to anticipate a potential concern – it is simply the way it does business.
Three senior managers including project sponsor and senior executive Ko de Blaeij are coming to New Zealand to give evidence at the marine consent hearings. Ko stepped down from the CRP board recently but remains very involved in the project and will lead our expert panel which guides us through strategic decisions that have a technical focus.
We really value the energy, expertise and continuing support we receive from Boskalis.
We expect to make considerable progress on these and other aspects of our business and will be in touch with more, regular updates.
Chris Castle, Managing Director
chris@crpl.co.nz or +64 (0) 21 55 81 85
AGM Presentation 2014
/Click here - to download the Chatham Rock Phosphate AGM Presentation 2014
Media Release: Chatham Rock Phosphate files draft Marine Consent application
/Media Release
31 March 2014
Chatham Rock Phosphate today submitted a draft Marine Consent application to the Environmental Protection Authority - the culmination of four years’ work and more than $25 million in investment.
The Marine Consent is the only major licence CRP now needs, having gained a mining permit for its phosphate extraction project in December. The EPA, New Zealand’s environmental regulator, is expected to decide on CRP’s application in November after a full public process.
Including the proceeds of the rights issue presently underway, Chatham has raised over $27 million from its existing shareholders and through placements to qualified investors to finance extensive spending on science-based research.
Managing Director Chris Castle said the CRP team was very proud of the work contained in the application.
“Rigorous research by scientists has considered the relevant facets of what we propose and demonstrates how we can minimise and mitigate environmental impacts.
“We sincerely appreciate the input from all of our stakeholders that has contributed to our thinking. We believe our work will satisfy any issues raised.
“Having done our homework, we know this project stacks up technically, environmentally and financially.”
Mr. Castle said the CRP’s phosphate resource, located on the seabed of the Chatham Rise, offers fertiliser security for New Zealand’s primary industry, has big export and import substitution potential, as well as environmental benefits, making it a project of national significance.
The Environmental Impact Assessment forming the centrepiece of the Marine Consent application will be considered under the Exclusive Economic Zone environmental consenting regime that came into force in June last year as part of the EEZ and Continental Shelf (Environmental Effects) legislation.
The main 300-plus page document is supplemented by more than 30 appendices, mostly scientific reports and models. The information in the EIA will be publicly available on the EPA website, and via a link on rockphosphate.co.nz, once the EPA has accepted the application as complete. People are then able to read the information, make submissions and attend public hearings during the next six months.
Contact Chris Castle on +64 21 55 81 85 or chris@crpl.co.nz
Announcement: Chatham Rock Phosphate advises financing strategy
/Dear Chatham Rock Phosphate shareholder or potential investor,
This announcement was released to NZX a few minutes ago.
If you wish to be added to the underwriting panel for any possible rights issue shortfall, please contact me by return email.
Regards,
Chris Castle
Chief Executive Officer
Chatham Rock Phosphate Limited
Email: chris@crpl.co.nz
Cell: +64 21 558 185
Skype: phosphateking
Media Release
26 February 2014
Chatham Rock Phosphate advises financing strategy
As recently advised CRP Managing Director Chris Castle recently made a repeat visit to London to meet UK based potential investors.
The visit proved to be successful.
Meetings were held with a number of investment groups that identified with the project and who indicated their interest in investing by means of private placement, subject to Chatham Rock Phosphate establishing a secondary listing on the London AIM market.
Accordingly the CRP board has agreed to proceed with the AIM listing process, which is expected only two to three months to complete (as there is no associated public offering).
In order to maintain our existing momentum, including filing our marine consent application (EIA) in the next few weeks, a decision has also been made to make a very attractively priced rights issue to existing shareholders. Details of this offer will be announced to shareholders on 14 March and the rights will be both renounceable and, subject to NZX approval, tradeable on the NZAX market. Shareholders will also be entitled to apply for shortfall from the offer in addition to their entitlement. It is also intended to establish a panel of underwriters in order to ensure that the issue is fully subscribed.
CRP holds a strategic, multi-million tonne organic rock phosphate deposit uniquely positioned to access Asian and Australasian fertiliser markets. It was granted a 20-year mining licence in 2013 and has recently applied for new prospecting licences both east and west of its existing licence areas that could significantly increase the scope of resources. The company is currently finalising its Environmental Impact Assessment for its Marine Consent application.
Contact Chris Castle on +64 21 55 81 85 or chris@crpl.co.nz
Media Release : Chatham Rock Phosphate attends PDAC
/25 February 2014
Chatham Rock Phosphate will be an exhibitor for the first time at the Prospectors and Developers Association of Canada convention, the world’s largest minerals investment and trade show being held in Toronto Canada next week.
“It is THE place where the mining industry talks turkey and does business,” CRP Managing Director Chris Castle said today.
He has attended the mining show for more than a decade but this year secured a prime booth position among the 600-plus in the investor exhibition area.
Government agency New Zealand Petroleum and Minerals is also operating a booth to promote New Zealand minerals projects and investment. Last year Mr Castle was the guest speaker at the New Zealand Government-hosted function.
Mr Castle will be hosting the CRP booth with Najib Moutia, CRP’s Canadian based Vice President Strategy, who is responsible for sales and marketing. He said the booth would provide a focus for people wanting to learn more about CRP’s innovative deep sea mining project. CRP’s technical partner Boskalis will also be displaying information on its capability.
PDAC has been running since 1932 and the annual convention now has more than 1000 exhibitors and 500 speakers. The 30,000 people who come from more than 120 different countries attend hundreds of presentations, courses, workshops and technical sessions during the four-day event.
CRP holds a strategic, multi-million tonne organic rock phosphate deposit uniquely positioned to access Asian and Australasian fertiliser markets. It was granted a 20-year mining licence in 2013 and has recently applied for new prospecting licences both east and west of its existing licence areas that could significantly increase the scope of resources. The company is currently finalising its Environmental Impact Assessment for its Marine Consent application.
Contact Chris Castle on +64 21 55 81 85 or chris@crpl.co.nz
+64 21 5581985
chris@crpl.co.nz
PhosphateKing