Media Release: Low impact and high value; seabed rock phosphate is of national significance

3 September 2013 

Chatham Rock Phosphate today refuted the misinformation media campaign being run by the Deep Water Group and questioned fish trawling’s environmental record.

In media articles George Clement of the Deep Water Group has described Chatham’s proposal to extract rock phosphate as a potential environmental “catastrophe”.

“Such descriptions could be applied to fishing, when you think about the vast area of sea floor trawling disturbs,” Managing Director Chris Castle said.

"Chatham's planned 15-year extraction project will touch a total of 450 km2, far less than 1% of the Chatham Rise. Mr Clement estimates that's about sevent times the size of Wellington harbour.

“In contrast, over the same period fishing will bottom trawl 750,000 km2, about three times the size of New Zealand. Year after year, weighted nets scrape 50,000 km2 of seabed, with bottom-dwelling animals disturbed or destroyed.  Up to 3000 km2 of new territory is disturbed annually - an environmental impact 100 times greater than predicted for phosphate extraction.”

Mr Castle said Chatham has talked to the DWG for three years. 

“We’ve given them huge amounts of information, scientific reports and models showing temporary and very localised impacts on adjacent sea floor and water column. At their request we paid for an independent review of the modelling.  They expressed cautious support for our project for most of that period. Recently the attitude of some members has changed, with no willingness to discuss their concerns.

“We wouldn’t consider extracting phosphate nodules from the Chatham Rise if it caused more than very minor environmental impacts.”

He said Chatham’s operations simply lift the top 30cm of sandy silt and redeposit 85% of it carefully on the same seabed after extracting the nodules – the net effect is selected areas of seabed are lowered about 5cm. Modelling indicates the material returned will not be widely dispersed, and the sediment that doesn’t immediately settle will rapidly dilute to insignificant levels.

“Our draft environmental impact assessment (EIA), supported by 30-plus expert reports, has identified no long-term impacts on key spawning, juvenile and young fish habitat. Any potential impacts are confined to our limited extraction areas, and are short-term, reversible, and of low environmental risk. “

He also notes the fundamentals of Chatham’s proposed method are routinely used in dredging around the world.  The only new aspect is undertaking this work at 400m. The operations will be intermittent (3 days in every 10 day cycle) and spread among geographically separate locations within the licence area.

“But while bottom trawling – ploughing vast tracts of the EEZ seabed decade after decade - requires no environmental consents, our project needs a mining licence and a marine consent. These cost millions of dollars, require years of research, consultation and official process, and involve full public scrutiny.

“The annual fish trawl footprint on just the Chatham Rise during the 2009-10 fishing year was 19,051 km2.  As hoki spawning and growth occurs over the entire 189,000 km2  Rise, DWG already know they can continually bottom-trawl 10% of the area without harming juvenile fish stocks, so Chatham’s extra annual 30 km2  is of little significance.”

Mr Castle said New Zealand is predicted to be $900 million richer as a result of the new phosphate industry and Chatham will be generating annual exports or import substitution of $300 million, plus supporting farming, our biggest earner.

By area, the economic value of the phosphate resource is 500 times greater than fishing; expected to yield $9.1 million per km2. Bottom trawling yields less than $20,000 per km2.

“The benthic protection areas, of which the fishing industry is so proud, were established to preserve areas of sea floor not already affected by bottom trawling. They were determined without considering the economic importance of resources such as rock phosphate.

“Thanks partly to Chatham’s $20 million investment, the Rise benthic environment is now one of the best known parts of our marine territory, and can now inform resource and environmental management decisions, possibly including modifying those benthic areas.

“We’ve spent three years collecting data on oceanographic conditions (tides, currents, turbidity), benthic life, and analysing the impacts of disturbances on the seafloor and in the water column so we can minimise impacts and protect areas of benthic habitat.”  

Mr Castle said this project is important to provide fertiliser security for farming.  Most rock phosphate used to make fertiliser now is imported from Morocco. It’s high in cadmium, involves high transport costs and has a significant carbon footprint.

Chatham Rise rock phosphate, as an ultra-low cadmium direct-application fertiliser, has proven to be as effective as processed fertilisers while reducing run-off effects on New Zealand waterways by up to 80%. 

Rather than being an “environmental catastrophe”, it’s a project of national significance offering significant economic and environmental benefits.

For further information contact Chris Castle on 021 55 81 85 or email chris@crpl.co.nz

 

Media Release: Edison maintains unrisked valuation above $2, assesses fundraising efforts

Media Release

Edison Group has kept a unrisked valuation above $2 for Chatham Rock Phosphate in its latest update in which it examines the company’s ongoing efforts to raise the last of the capital it needs to start producing rock phosphate from the seabed on the Chatham Rise.

The unrisked $2.04 valuation is not much changed from that earlier in the year, but Edison has raised its risk assessment on the basis of a slowing in regulatory approvals and Chatham raising only part of the capital it still needs, in the recent Initial Public Offering.

Edison notes that “explicit positive sentiment received by CRP from government authorities in April, informing that its mining permit application would be treated with priority, has yet to bear fruit”.

“Uncertainty has weighed on investor confidence, which was an undertone to a weak result from a recently completed public capital raising.”

Edison estimates Chatham needs $7 million to fund its pre-development work, of which half are costs associated with the environmental consenting process.

“CRP has launched a further offer to professional investors that, if successful, and combined with an assumed early part-exercise of a significant tranche of success-related share options by an existing cornerstone investor, should serve to meet its remaining pre-commissioning capital needs.”

The non-retail linked offer is for up to 5 million shares at 32c to raise $1.6 million followed by a further 5 million shares at 35c to close two weeks after the grant of a mining licence to raise a further $1.75 million. The new shares will have a 2-for-1 70c option exercisable within three months of the marine consent being granted.

Edison says the extended approval processes have added a delay of six months to the timelines the company was targeting until a couple of months ago.

“We now consider it more likely that a distinct two-stage investment decision will unfold, with the stages reflecting the sequenced granting of a mining permit and marine consents.

The first stage would likely see contract miner Boskalis commit to an initial capex programme involving low-risk, transferable equipment that could be redeployed in the event of further delay or worse. The main commitment would come following the project receiving marine consents, probably in mid 2014, which would act as a trigger for Boskalis to commit the substantial spend to procure and fit out the mining vessel.

To see the report go to www.rockphosphate.co.nz/investors

For further information please contact Chris Castle on 021 55 81 85

 

Chatham Rock Phosphate to focus on Mining Licence

10:38am, 5 Aug 2013 | GENERAL

Media Release

Chatham Rock Phosphate to focus on Mining Licence

5 August 2013 
Chatham Rock Phosphate’s board has resolved to focus on the receipt of its Mining Licence approval before it submits a final Marine Consent application, Managing Director Chris Castle announced today. 
“We believe it is critical we receive the licence before we spend significant more resources – in both time and money - on the Marine Consent process,” he said. 
“Chatham applied for a Mining Licence in September 2012 and was advised in April the application was being treated as a matter of priority. New Zealand Petroleum and Minerals said the information we had provided regarding the mineral resource and its financial and technical capability had not raised any concerns. 
“Following the passing of the Crown Minerals Act NZP&M identified some areas of work it had not completed, including Iwi consultation. It has also asked Chatham for some more technical information. 
“We are working closely with officials to ensure they receive all of the information they need to rapidly progress our application.” 
Mr Castle said the additional time required for the Mining Licence will enable Chatham to further enhance the Marine Consent application. 
“We understand that it is regarded as pretty complete as far as the Environmental Protection Authority is concerned. But we think it can be improved further. In particular we have received some new data from a recent NIWA cruise we have co-funded.. We have also had some sections of our Environmental Impact Assessment peer-reviewed by our overseas experts and they have suggested some improvements. 
“On that basis we are going to push the pause button and wait until we have received the Mining Licence before we submit our final Marine Consent application. 
“At this stage we have no set time line but we envisage receiving the Mining Licence in a matter of weeks and will then proceed to submit our new further improved Marine Consent.” 

Allotment of Shares and Options

18 July 2013

Chatham Rock Phosphate’s Initial Public Offer of shares and options has raised $1.58 million.

The offer, under a simplified disclosure prospectus, closed last Friday and the company’s share registry processed late applications over the following few days.  New shares and options under the offer were allotted today.

Chief executive Chris Castle said while it was disappointing not to reach the target of $4 million, the offer achieved a good result given that it was non-brokered.

“It has successfully increased the profile of Chatham, including among institutions and the farming and rural communities.  We are delighted to welcome a further 120-plus new investors into Chatham Rock Phosphate.”

Mr Castle said he is continuing discussions with institutions and a number of professional investors both locally and overseas that have expressed interest in Chatham.

The capital raised will allow Chatham to work towards achieving further milestones and de-risking over the coming months, which would enable capital in future to be raised at higher prices.  “That would mean Chatham could minimise dilution of existing shareholder interests.

Chatham Rock Phosphate has now raised a total of $23.5 million of the estimated $30 million needed before production is expected to commence in 2015.

“Most of that funding has been sourced in the very difficult market conditions prevailing in the resources sector for the last 18 months.

With respect to our Mining Licence application, processes related to the new Crown Minerals Act have proven to be a bit more complex than initially anticipated.  Our application remains a priority and is being actively progressed by New Zealand Petroleum and Minerals.

“With an existing market capitalisation of $50.4 million we expect to be able to progressively raise the last $6.5 million as we require it.”

Full particulars of the allotment are set out below

For further information contact Chris Castle on 021 55 81 85 or chris@crpl.co.nz

   

Class of security: Ordinary shares

     

ISIN: NZWENE0003S0

     

Number issued: 4,502,817 ordinary shares

     

Issue price: $0.35 per ordinary share

     

Payment in cash: Yes

     

Fully paid: Yes

     

Percentage of class: 3.32%

     

Purpose of the issue: For working capital purposes

     

Authority for the issue: Board resolutions

     

Date of issue: 18 July 2013

     

Total number of securities   on issue following allotments: 140,075,226 ordinary shares

 
   

Class of security: Options (CROB

     

ISIN: NZCRPE0001S3

     

Number issued: 1,500,934

     

Exercise price: $0.70 per option to receive   one ordinary share

     

Payment in cash: Yes

     

Fully paid: Yes

     

Percentage of class: 100%

     

Purpose of the issue: For working capital purposes

     

Authority for the issue: Board resolutions

     

Date of issue: 18 July 2013

     

Total number of securities   on issue following allotments: 1,500,934 Options

 

 

Chatham submits NZ’s first Marine Consent

– culminating 3 years work, $20 million investment

Chatham Rock Phosphate today submitted New Zealand’s first Marine Consent application under the new EEZ regime to the Environmental Protection Authority.  It is the culmination of three years work and more than $20 million in investment.

Submitting the application comes in the final week of Chatham’s current capital raising for $4-10 million in its first public investment offering in New Zealand.  Chatham has raised $21.5 million for the project over the past two years from its existing shareholders and through private placements to qualified investors.

The EPA, New Zealand’s environmental regulator, is expected to decide on CRP’s application after a full public process, in January 2014.

“This application is for a project of national significance offering fertiliser security for New Zealand’s primary industry, significant export potential and import substitution, as well as environmental benefits,’ Chief Executive Chris Castle said.

“We have done our homework and know this project stacks up technically, environmentally and financially,” Mr Castle said.

“The application has been developed by a team of experts who have delivered scientific rigour.  It has also incorporated input from a wide range of stakeholders who have challenged our thinking and made valuable contributions to the completed document.”

The Environmental Impact Assessment forming the centrepiece of Chatham’s Marine Consent application will be considered under the new Exclusive Economic Zone environmental consenting regime, which came into force on 28 June as part of the EEZ and Continental Shelf (Environmental Effects) legislation.

“We believe we have prepared all of the information the EPA needs, under the terms of the EEZ Act.

“We also feel confident any stakeholders who may have concerns will see the EIA comprehensively addresses all environmental issues.”

The main document runs to more than 330 pages and there are about 30 appendices including a large number of scientific reports and models. The team has summarised the key findings to assist potential submitters work through the documentation.

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 consider the documentation and make submissions and attend public hearings during the next six months.

Chatham expects the first of its required consents – approval of a Mining Licence under the Crown Minerals Act – within the next several weeks. 

Chris Castle – +64 21 55 81 85 or chris@widespread.co.nz

Opening of Share and Option Offer

Chatham Rock Phosphate is pleased to advise that its offer of shares and options under a simplified disclosure prospectus opened from 5pm today following the conclusion of the FMA Consideration Period under the Securities Act 1978.

A copy of the prospectus is available on the website side bar and includes in it the application form and application instructions to participate in the offer.

The offer will close on 12 July 2013, unless extended in the manner discussed in the prospectus.

The offer is for new shares at $0.35 per share. For every three shares subscribed for, one option to acquire a share will be issued for an exercise price of $0.70. The offer is seeking to raise $4 million with the ability to seek over subscriptions up to approximately $10 million.

On behalf of the Board,

Chris Castle
Chief Executive Officer

Email: chris@crpl.co.nz

Opening of Share and Option Offer

Chatham Rock Phosphate is pleased to advise that its offer of shares and options under a simplified disclosure prospectus opened from 5pm today following the conclusion of the FMA Consideration Period under the Securities Act 1978.

A copy of the prospectus is available on the website side bar and includes in it the application form and application instructions to participate in the offer.

The offer will close on 12 July 2013, unless extended in the manner discussed in the prospectus.

The offer is for new shares at $0.35 per share. For every three shares subscribed for, one option to acquire a share will be issued for an exercise price of $0.70. The offer is seeking to raise $4 million with the ability to seek over subscriptions up to approximately $10 million.

On behalf of the Board,

Chris Castle

Chief Executive Officer

Email: chris@crpl.co.nz

 

CRP showcases project at Fieldays

12 June 2013 

Chatham Rock Phosphate is showcasing its project to significant investor interest at Mystery Creek Fieldays in Hamilton this week.

The Fieldays event, the largest agribusiness show in the southern hemisphere attracting more than 120,000 over four days, has already proved after one day to be a success for Chatham, according to Chief Executive Chris Castle.

“We’ve had a stream of people all day coming to our stall, wanting to know about the project, our phosphate product and the investment opportunity.

Mr Castle, chairman and corporate relations director Linda Sanders and other staff and directors are representing the company at the event.

“We’re being visited by farmers who have followed our project over the past couple of years in the media, by companies involved in the industry, by people who are simply curious to learn more about the project’s technical innovations and by loyal shareholders.”

Mr Castle said shareholders are welcome to come and visit the company’s representatives until 5pm Saturday, located at stall 5, row D in the main pavilion.

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

 

Chatham Rock Phosphate Ltd. registers simplified disclosure prospectus

Further to the announcement of 4 June, Chatham Rock Phosphate is pleased to advise that it has today registered a simplified disclosure prospectus. A copy of the prospectus accompanies this announcement.

The offer will open on 14 June 2013 unless the FMA consideration period is extended under the Securities Act 1978. The offer will close on 12 July 2013.

The offer is for new shares at $0.35 per share. For every three shares subscribed for, one option to acquire a share will be issued for an exercise price of $0.70. The offer is seeking to raise $4 million with the ability to seek over subscriptions up to approximately $10 million.

On behalf of the Board,

Chris Castle 
Chief Executive Officer

Email: chris@crpl.co.nz

View the announcement on the www.nzx.com or download the Simplified Disclosure Prospectus.

Chatham Rock Phosphate Ltd. Registers Simplified Disclosure Prospectus

Further to the announcement of 4 June, Chatham Rock Phosphate is pleased to advise that it has today registered a simplified disclosure prospectus. A copy of the prospectus accompanies this announcement.

The offer will open on 14 June 2013 unless the FMA consideration period is extended under the Securities Act 1978. The offer will close on 12 July 2013.

The offer is for new shares at $0.35 per share. For every three shares subscribed for, one option to acquire a share will be issued for an exercise price of $0.70. The offer is seeking to raise $4 million with the ability to seek over subscriptions up to approximately $10 million.

On behalf of the Board,

Chris Castle 
Chief Executive Officer 
Email: chris@crpl.co.nz