NZX Announcement: September Project Update

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Dear Chatham Rock Phosphate shareholder or stakeholder,

This update has just been released by NZX.


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 


Update

15 September 2014

Pace not letting up

The pace and level of activities by the CRP team is at full throttle as we work on a number of fronts to advance the project.

Our first focus is ensuring the Marine Consent process proceeds as scheduled so we can get a decision by the Environmental Protection Authority’s decision-making committee before Christmas. 

The second is continuing to finance the current very high level of activity and the inevitable associated costs. We’re approaching the peak of our spending commitments – financing all of the charges associated with the Marine Consent process. 

All up we estimate our and the EPA’s costs (which CRP pays for) will be around $4 million.  These include all of the experts for CRP and the EPA and all of the associated staff, travel, venue and other costs.

Hence the need for more money

We have announced two successful capital raising tranches over recent weeks.  One was for $1.24 million and one for $1.22 million.   The shares were issued at NZD 0.12 per share (or the approximate foreign currency equivalent). In addition, for each share issued, one CRPOB $0.688 option was issued.

To enable all shareholders to participate at these current prices directors resolved to extend the offer on the same terms.   The share offer is in the ratio of two new shares for every 17 shares you currently hold, with one non-voting option granted for every new share. You will be sent documents telling you about your entitlements and the relevant time frames. 

We naturally encourage everyone to help us raise the money we need to complete the Marine Consent process.  We really appreciate the money you’ve contributed in the past and hope you take advantage of what we believe will be temporary exceptional value at these share price levels.

In addition to the offer to shareholders, qualifying habitual investors will be able to take up any shortfall of shares not subscribed for by shareholders within three months of the offer closing.

Merger Talks

You may have noticed that as part of the “cleansing notice” regarding the issue we advised we have been in discussions with a publicly quoted company with respect to a potential merger transaction.

We can’t say much more at this stage.  The discussions are at an early stage, on-going and at present no agreement has been reached - binding or non-binding - on the terms of such a transaction.   Rest assured, if and when we get to a position where these discussions progress to a documented stage, we’ll announce further details.

Evidence and queries

In late August we submitted all of our evidence from our 31 experts.  While some is technical, there is some quite readable information about the project so it’s worth having a good look around the relevant part of the EPA website devoted to our project. http://www.epa.govt.nz/EEZ/chatham_rock_phosphate/Pages/default.aspx

In addition to our evidence the submitter evidence was filed last Friday.

As well as the evidence from our expert witnesses, we completed the mammoth task of providing detailed answers to 62 queries from the EPA. Every new report and piece of evidence increases our confidence we have built the case to demonstrate to the Decision Making Committee why this project should be approved.

All of the pieces of the jigsaw are building a compelling picture to demonstrate the environmental impacts are comparatively minor or can be readily managed and the benefits – both environmental and economic – are significant for New Zealand.

Hearings underway next week

Public hearings get underway next Thursday 25 September, and the venue will mostly be at the Basin Reserve in Wellington.  If you get the chance feel free to pop in and see the action, even for a few hours.

This week caucusing or discussions between expert witnesses will seek to identify areas of agreement and outstanding areas of contention.

We’re not the only one

We were delighted to see Mexican based undersea phosphate project Don Diego file its environmental impact assessment (EIA) with the Mexican Secretary of Environment and Natural Resources. A response is expected in 60 business days.

This is a great step forward for the marine mining industry, demonstrating the industry has real momentum and that well-researched and considered undersea phosphate mining projects have a major part to play in ensuring the world’s food security.

As with CRP, Don Diego used experts in marine dredging, plume modeling, sound propagation, ecotoxicology, phosphate research and engineering for the environmental studies and scientific findings in the EIA.

A non-technical summary of the EIA is attached.

Last word

Finally, if you missed it, it’s worth reading an article written by business journalist Pattrick Smellie regarding the concerns we had involving the EPA’s issue of a staff report.  http://www.stuff.co.nz/business/opinion-analysis/10436122/Politics-of-mining-keep-digging

We remain concerned the staff report was premature, contained many inaccuracies, demonstrated bias and most importantly was delivered at a point in time when the EPA staff were fully aware that it could be destructive to our financing arrangements.

We’re conscious we have many international shareholders who don’t fully understand the New Zealand environment.  There were several international media reports saying the staff report was the final decision – which of course it was not.  

Reassuringly, numerous local and international stakeholders saw the EPA staff report for what it was and expressed their views in writing to several Ministers.

Much more could be said about this now but that can wait.

Notwithstanding the EPA staff sideshow we remain totally confident that our project will be granted (by the EPA Decision Making Committee, not by the support staff) a marine consent as a logical outcome arising from our multi-million dollar investment, our fact based and science supported approach, and several person-years of effort.  

Chris Castle, Managing Director

chris@crpl.co.nz or +64 21 55 81 85

NZX Announcement: Notice of Offer of Same Class Financial Products for Issue

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Dear Chatham Rock Phosphate shareholder or stakeholder,

This announcement, which relates to the rights issue, was filed with NZX this morning.

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

 

Monday 8 September 2014

Client Market Services

NZX Limited

Level 1, NZX Centre

11 Cable Street

Wellington 6011

 

Notice of Offer of Same Class Financial Products for Issue

Chatham Rock Phosphate Limited (Chatham Rock) intends to undertake a pro-rata 2 for 17 renounceable rights offer for new ordinary shares in Chatham Rock (New Shares) to Chatham Rock’s eligible shareholders (those on the share register on the record date of 5pm, Wednesday 10 September 2014) with one option (New Option, in the same class as Chatham Rock’s listed CRPOB options) to be granted for every New Share allotted (the Offer).

Pursuant to clause 17(1)(a) of Schedule 1 of the Financial Markets Conduct (Phase 1) Regulations 2014 (Regulations) and clause 19 of Schedule 1 of the Financial Markets Conduct Act 2013 (FMCA), Chatham Rock advises that:

1.       The Offer is being made in reliance upon the exclusion in clause 19 of Schedule 1 of the FMCA and Chatham Rock is giving this notice (Cleansing Notice) under clause 17(1)(a) of Schedule 1 of the Regulations.

2.       As at the date of this Cleansing Notice, Chatham Rock is in compliance with:

(a)     the continuous disclosure obligations that apply to it in relation to Chatham Rock listed shares and options; and

(b)     its “financial reporting obligations” within the meaning set out in clause 17(4)

of Schedule 1 of the Regulations.

3.       As at the date of this Cleansing Notice, there is no information that is “excluded information” within the meaning set out in clause 17(4) of Schedule 1 of the Regulations, other than:

(a)     as announced to the market, the filed Marine Consent and all applicable documents available at:http://www.epa.govt.nz/EEZ/chatham_rock_phosphate/Pages/default.aspx; and

(b)     Chatham Rock has been in discussions with a publically quoted company with respect to a potential merger transaction. These discussions are at an early stage, on-going and at present no agreement has been reached - binding or non-binding - on the terms of such a transaction. Should these discussions progress to a documented stage a market announcement will be made giving further details.

4.       The potential effects that the Offer and the issue of New Shares and New Options will have on the “control” (within the meaning of clause 48 of Schedule 1 of the FMCA) of Chatham Rock and the consequences of those effects are as follows:

(a)     As at the date of this Cleansing Notice, the substantial security holders in Chatham Rock are Subsea Investments II LLC, Boskalis Offshore Subsea Contracting B.V, Odyssey Marine Exploration Incorporated and Aorere Resources Limited.

(b)     If all eligible shareholders take up their pro-rata entitlements to New Shares and New Options under the Offer, their percentage shareholding in Chatham Rock will remain the same and there will be no effect on the control of Chatham Rock (provided that the entitlements of any ineligible shareholders are taken up by parties not having the pre-Offer capacity to exercise “control”).

(c)      In some cases, shareholders with registered addresses outside of New Zealand and Australia may not be eligible to participate in the Offer (and their percentage shareholding will be diluted as a result of the issue of New Shares and New Options), due to the legal requirements of the relevant jurisdiction being unduly onerous for Chatham Rock to make the Offer in that jurisdiction (as provided for in NZAX Listing Rule 7.4.3(h)). However, Chatham Rock does not anticipate that the combined percentage interest of any ineligible shareholders is not likely to be sufficiently significant for its dilution to have a material effect on the control of Chatham Rock if all eligible shareholders take up their entitlements.

(d)     If some eligible shareholders do not take up their full entitlement, such shareholders' percentage shareholding will be reduced (relative to those who did take up their full entitlement), and Chatham Rock will be entitled to allocate that Shortfall to other parties who have taken up their full entitlement under the oversubscription facility.

(e)     In addition, if there is a Shortfall under the Offer (following any applications for additional New Shares and Options, as described above), Chatham Rock will be entitled to place the Shortfall to any persons (subject to complying with applicable legislative instruments and the NZX Listing Rules) within three (3) months of the Offer closing.

(f)      The New Options will not carry voting rights and will only impact upon control if and when they are exercised into ordinary shares.

(g)     Accordingly, the Offer is not expected to have any material effect or consequence on the control of Chatham Rock.

On behalf of the Board,

 

Chris Castle

Chief Executive Officer

Email: chris@crpl.co.nz

NZX Announcement: Allotment of Shares and Capital Raising Update

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Dear Chatham Rock Phosphate shareholder or stakeholder,

This announcement has just been released by NZX.

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

 

5 September 2014

Allotment of Shares and Capital Raising Update

Chatham Rock Phosphate Limited (NZX: CRP) is pleased to advise that it has today raised a further NZD$1.24 million in new capital from qualified investors.

As previously announced to the market CRP is undertaking a rights issue on a 2 for 17 basis; each right granting its holder the right to subscribe for one ordinary share in CRP (and one new option to be granted for each share allotted). Rights trading is due to commence on Monday 8 September, 2014.

Shares have today been issued at NZD0.12 per share (or the approximate foreign currency equivalent). In addition, for each share issued, one CRPOB $0.688 option has been issued.

Full particulars of today’s allotment are set out below.

 

Chris Castle

Chief Executive

Email: chris@crpl.co.nz

NZX Announcement: CRP completes another milestone – filing evidence and answering queries

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Dear Chatham Rock Phosphate shareholder or stakeholder,

This announcement has just been filed with NZX.  

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

 

 

Media Release

1 September 2014

CRP completes another milestone – filing evidence and answering queries

Chatham Rock Phosphate has achieved another major milestone by completing and filing evidence from 31 expert witnesses and answers to 62 queries from the Environmental Protection Authority.

CRP has applied for a marine consent to mine rock phosphate from an area of the seabed on the Chatham Rise, in the Pacific Ocean 450 km from New Zealand and 250 km from the Chatham Islands.  The area is within New Zealand’s Exclusive Economic Zone.

“It was a massive task and the quality of the work produced continues to demonstrate to the CRP board and management why this project is important for New Zealand – both economically and environmentally,” managing director Chris Castle said today.

The EPA's website now contains all of the evidence and answers to queries:

http://www.epa.govt.nz/EEZ/chatham_rock_phosphate/evidence/Pages/Applicants_evidence.aspx

http://www.epa.govt.nz/eez/EEZ000006/EEZ000006_Further_information_provided_by_CRP

Mr Castle said the quality and comprehensiveness of the evidence and the answers underscores the board’s confidence CRP has built the case to demonstrate to the decision-making committee this project should be approved.

“With every report and expert, we continue to demonstrate the environmental impacts are comparatively minor or can be readily managed and the benefits – both environmental and economic – are significant for New Zealand.”

The CRP team is now preparing for the start of hearings on 25 September, which includes caucusing or discussions between expert witnesses, in the week starting 15 September, to seek to identify areas of agreement and identify outstanding areas of contention. CRP is also planning the order of its witnesses given some are travelling from Europe and the United States, and to accommodate the timing of hearings in the Chatham Islands in the week starting 6 October. At this stage CRP anticipates hearings will last around 6 weeks.

 

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

NZX Announcement: Allotment of Shares and Capital Raising Update

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Dear Chatham Rock Phosphate shareholder or stakeholder,

This announcement has just been released to NZX.  

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

 

25 August 2014

Allotment of Shares and Capital Raising Update

Chatham Rock Phosphate Limited (NZX: CRP) is pleased to advise that it has today raised NZD$1.22 million in new capital from qualified investors.

CRP also anticipates that it will complete further placements shortly for approximately NZD$1 million in further new capital. As previously announced to the market it is then intended to make an offer to all existing shareholders to give them access to the investment terms currently being offered by CRP.

Shares have today been issued at NZD0.12 per share (or the approximate foreign currency equivalent). In addition, for each share issued, one CRPOB $0.688 option has been issued.

Full particulars of today’s allotment are set out below.

 

Chris Castle

Chief Executive

Email: chris@crpl.co.nz


NZX Announcement: Media Release - CRP gravely concerned at potential for bias in EPA staff report

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Media Release

25 August  2014

CRP gravely concerned at potential for bias in EPA staff report

Chatham Rock Phosphate today announced it would be formally seeking the withdrawal of the Environmental Protection Authority’s staff report issued last week because of extremely worrying evidence which suggests the potential for bias.

CRP last week criticised both the content and timing of the EPA staff report on CRP's Marine Consent application.  Now a new and potentially more serious basis for concern about the validity of the report and its conclusions has emerged.  

CRP's Managing Director Chris Castle said today CRP considers the report to be potentially biased and therefore totally unreliable, and it intends to seek that the EPA staff report be formally withdrawn.  CRP will shortly make an application to the EPA's decision-making committee for that to occur.

"It has come to CRP's attention that one of the key authors of the EPA staff report appears to have been a signatory to a Greenpeace petition in 2010 seeking the Government permanently stop all plans to open up New Zealand's coastal waters to offshore oil drilling and stop any expansion of coal mining in New Zealand.   If this is the case, it raises very serious questions over the objectivity of the report and its conclusions.

"While I accept the subject matter of the petition does not refer directly to offshore mining projects such as ours, there is certainly a strong enough link between the subject matter of the petition and our project to raise an alarm.  This is further compounded by the fact that Greenpeace is a key submitter in opposition to CRP's marine consent application.  

“Any potential for a relationship with a submitter needs to be disclosed by EPA staff and, if any connection exists, the staff member simply should not be involved.

"We have asked the EPA to confirm whether the staff member was a signatory to the petition.  The EPA's response has been the staff member is not and has never been a financial member of Greenpeace and, while the individual does not recall whether or not they signed the petition, the staff member has conceded it is possible that they may have signed it.  

“We understand the staff member did confirm they have, from time to time, received communications from Greenpeace. We have asked the EPA to investigate the matter further, but the EPA advised it is satisfied with the individual's response.

"In the circumstances, that response is simply is not good enough.  A hazy memory about such important matters is not convincing, and we believe the only reasonable inference that can be drawn is the staff member was in fact a signatory to the petition.  

“If that is the case, it confirms our suspicions the report was not an objective or fair evaluation of the merits of CRP's proposal, quite apart from the other serious problems regarding accuracy, that we have identified with it.  

“It is absolutely vital in a public process like this the people involved in assessing our proposal are objective and there is no possibility of bias.  We do not have confidence this is the case and we believe there is a serious risk our application has not been fairly assessed.

"The only option is for the report to be formally withdrawn," said Mr Castle.

“This is an important issue for all public servants. The public must have confidence in their independence.

"While we understand it is already in the public domain, in our view there should be formal recognition the report has no value and will have no legal relevance to the rest of the marine consent process."  

An application to the EPA's decision-making committee responsible for CRP's application will be made shortly.  

"We are confident the decision making committee will share our concerns about the report and direct that it be withdrawn".

Mr Castle said CRP has identified numerous errors of fact in the report and the company also has concerns about conclusions drawn which conflict with expert evidence.

He said there is no reason for a staff report to contain any conclusions or recommendations as an input into the decision-making process.  “This is particularly unfair as the views of staff cannot be tested through the Marine Consent process because they do not give evidence.”

Mr Castle said there was no need for a second staff report, nor is there any need for any delay to the marine consent process as all relevant issues will be fully aired before the decision making committee.. 

“The process underway involves several weeks of evidence and discussions between interested parties.  That is the public process which matters, where anyone who has submitted on the proposal can be involved.”

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

NZX Announcement: Aorere invests in Chatham Rock Phosphate

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Dear Chatham Rock Phosphate shareholder or stakeholder,

This announcement has just been released by NZX.

Aorere Resources is already an associated company  of Chatham Rock Phosphate.  

 

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

 

Media Release

22 August 2014 

Aorere invests in Chatham Rock Phosphate

Aorere Resources will invest $500,000 in Chatham Rock Phosphate, independent chairman Dene Biddlecombe announced today.

“The independent directors think the shares represent outstanding value.”

Mr Biddlecombe said the terms of the private placement – one of a number CRP is currently undertaking – will be confirmed in the next few days.

“CRP is making strong progress with its Marine Consent application and we remain very confident the company will be granted its environmental permit by the end of the year.

We are familiar with the quality of the scientific research and level of consultation undertaken by the CRP team and we believe none of the submissions made have raised any deal breakers.

Mr Biddlecombe said Aorere’s investment would be made from some of the proceeds of the recent shareholder rights issue.

“We think it’s the best investment we can make for our shareholders and are delighted it will enable Aorere to build up its holding.”

Mr Biddlecombe said he was unimpressed by the uninformed and premature report issued by staff of the Environmental Protection Authority earlier this week. 

“A cursory look shows it is riddled with mistakes and fails to even consider much of the information received more recently.  Had this information been assessed it would have addressed many of the issues raised by the report’s authors. 

“It’s a big concern such a report was issued at this time, given it has only confused interested parties, the Decision Making Committee and investors.  The EPA should look carefully at its processes in the light of the – hopefully short-term - damage its actions have caused to CRP’s share price.”

Dene Biddlecombe, Chairman, Aorere Resources, +64 27 230 0166 or dene@aorereresources.co.nz

Update: EPA staff report raises questions

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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