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:

http://www.radionz.co.nz/national/programmes/ruralnews/audio/20161273/midday-rural-news-for-16-december-2014

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:

http://www.rockphosphate.co.nz/news/2014/12/8/chatham-rock-interim-report-for-the-six-months-to-30-september-2014