NZX Announcement: Proposal by Chatham Rock Phosphate to list on Overseas Stock Exchange, acquire other Phosphate assets

2 April 2015

NZX Market Announcement

Proposal by Chatham Rock Phosphate to list on Overseas Stock Exchange, acquire other Phosphate assets

Chatham Rock Phosphate shareholders will be aware from recent communications that, since the refusal of the Chatham Rise marine consent application, CRP has been assessing its overall business strategy.

We can now report that a decision has been made for CRP to evolve from its single project focus into a more diversified company, principally involving other phosphate projects, both on and offshore.  Other marine mining opportunities involving other commodities will also be evaluated by our team. 

The main drivers for this evolution in our strategy is not only the desire to reduce investor risk, but also to take advantage of (and therefore retain) the significant institutional knowledge and expertise that exists within our management team and our partner organisations. This knowledge spans marine and environmental science, the development of offshore mining projects, and extensive knowledge of the phosphate market, both locally and internationally.  

We also consider that Chatham’s ability to finance the eventual resubmission of the marine consent application will be enhanced if both existing shareholders and potential new investors don’t face the same binary EPA-decision risk as in the past. 

The acquisition and development of these new projects within Chatham would be significantly easier if CRP was listed on a more recognised and liquid overseas stock exchange. The Toronto stock exchange is the most logical one as it is a leading exchange for mining stocks and also has a major fertilizer component. We have considered various options for the most cost effective way of listing and identified a reverse takeover of a listed stock as most effective.  

Accordingly one of our significant shareholders, Aorere Resources Limited has, with the support of the Chatham Board, signed a sale and purchase agreement with Toronto Venture Stock Exchange (TSX.V) listed Antipodes Gold (AXG) to acquire its core assets. Antipodes Gold is also dual listed on the NZAX.

Included as a condition in this sale and purchase agreement is that, subject to the fulfilment of a number of prior conditions, AXG make a share based takeover offer for Chatham under the Takeovers Code which will, when completed, result in CRP being owned 100% by AXG. Due to the expected relative values of the two companies at the time the takeover will take place, existing CRP shareholders will own approximately 92.5% of the merged entity.

The requirement to make the takeover offer will only arise however if the other conditions in the agreement (finance, due diligence, taxation confirmations, necessary approvals and consents) are satisfied and at least 70% of Chatham shareholders first commit to accept the takeover offer. The full takeover offer terms are yet to be formed and it is important to note that no takeover notice has been given and no shareholders have, at the present time, given any such commitments. 

If the takeover is completed the merged entity will then change its name to Antipodes Phosphate to reflect its primary focus on the phosphate market.

It is then proposed that other projects will be acquired, by issuing equity, by the now dual (TSX.V and NZAX) listed Antipodes Phosphate and the enlarged group would subsequently seek to raise further funds in local and overseas markets. These funds would be utilised to advance the projects held within the group, including the Chatham Rise project, the other five permit applications already filed in Namibia, and the newcomers to the portfolio.   

The outcome of these proposed transactions is considered by each of the respective Boards of Directors to be in the best interests of the shareholders of all three companies involved. Please note these transactions are at an early stage and, as noted above, are subject to a substantial number of conditions. These conditions will now be worked through and it is anticipated that, all going smoothly, the transactions would be completed in August this year. 

We welcome shareholder feedback on this proposed transaction. A copy of the Aorere Resources market announcement follows this announcement for shareholder information.

Chris Castle

Chief Executive Officer

2 April 2015

NZX Market Announcement

Proposal by Aorere Resources to acquire gold joint-venture held by Antipodes Gold Limited. 

Aorere Resources (AOR) shareholders have previously been advised of the desire of the directors to invest in New Zealand based minerals projects that fit our investment criteria. A number of possible projects have been investigated subsequently with none of these matching up. 

However, more recently two very interesting gold related projects have been identified and subjected to preliminary due diligence. As a result of this a conditional sale and purchase agreement has just been signed with Antipodes Gold (AXG) to acquire the shares of their wholly owned subsidiary, Glass Earth (New Zealand) Limited (GENZL). GENZL holds joint venture interests in two Waihi based gold prospects with Newmont Mining Corporation (Newmont).

 Subject to the following conditions it is proposed that AOR acquire GENZL for consideration of $1 million comprised of $800,000 in shares and $200,000 in cash. AXG would subsequently settle any existing liabilities and then intends to distribute the AOR shares to its own shareholders, with the aim of becoming a completely clean dual-listed (NZAX and TSX.V) “shell” company.

The agreement is subject to a number of conditions. These include:

• obtaining counterparty consents (such as Newmont’s consent and completing a pre-emptive rights process with them);
• relevant approvals being obtained;
• the tax implications of the transaction being confirmed;
• finance for the transactions being arranged (with the present intention of the AOR Board being to realise some of its existing investments);
• AXG putting in place arrangements to distribute the Aorere shares it receives; and
• Completing due diligence investigations.  

In addition it is a condition that AXG make a share based takeover offer for Chatham Rock Phosphate (CRP) which will, when completed, result in CRP being owned 100% by AXG. The obligation to make a takeover offer is contingent however on at least 70% of CRP shareholders committing to accept such a takeover offer and the other conditions above being first satisfied. 

AOR has facilitated this potential takeover as it considers it will be a positive development for CRP, one of AOR’s most significant investments. Due to the expected relative values of the two companies at the time the takeover will take place, existing CRP shareholders will own approximately 92.5% of the merged entity, which will then change its name to Antipodes Phosphate to reflect its primary focus on the phosphate market.

The outcome of these proposed transactions is considered by each Board of Directors to be in the best interests of the shareholders of all three companies involved. Please note these transactions are at an early stage and, as noted above, subject to a substantial number of conditions. These conditions will now be worked through and it is anticipated that, all going smoothly, the transactions contemplated would be completed in their entirety in August this year.

A copy of the CRP market announcement follows this announcement for shareholder information.

Chris Castle

Managing Director

Email: chris@crpl.co.nz

NEWS RELEASE 15-3

April 1 2015 

ANTIPODES GOLD ANNOUNCES RESTRUCTURING DEAL

to PURSUE GOLD & PHOSPHATE OPPORTUNITIES

WELLINGTON, New Zealand – Antipodes Gold Limited (TSXV and NZAX: AXG, the “Company”) announced today that that it has signed an agreement to sell its gold exploration interests and undertake a reverse takeover of a listed New Zealand based phosphate development company.  Both these transactions will require shareholder approval.  An Information Circular and requisite supplementary reports will be provided to shareholders prior to the Special General Meeting, expected to be held in June.

The planning of these transactions is at an early stage and subject to a number of conditions, including those set out below.  These conditions are being worked through:

• Completing due diligence investigations;
• Confirming the tax implications of the transactions;
• Obtaining counterparty consents;
• Obtaining relevant approvals (shareholder and regulatory);
• Securing interim financing for the transaction costs and G&A expenses;
• Ensuring a process to distribute shares it receives as part payment: and
• The requirement to make a takeover offer only arises if the other conditions in the agreement (finance, due diligence, taxation confirmations, necessary approvals and consents) are satisfied and at least 70% of the target company shareholders commit to accept the takeover offer. 

As shareholders are aware, the Company has been seeking equity funding for some time, to advance its gold exploration interests in the Hauraki region in the North Island, New Zealand.  In parallel with this, the Company and Newmont Mining Corporation (“Newmont”) have been rearranging their joint venture management and equity interests in order to facilitate the Company’s ability to raise funds and move forward on exploration.  As equity funding could not be raised, the Company has sought to further restructure its business activities.

Sale of Gold Exploration Interests to Aorere Resources Limited (“AOR”)

The first transaction proposed is with AOR, an investment company listed on the New Zealand Stock Exchange main board (refer below for more information).  In this transaction AOR will acquire the Company’s gold exploration assets by purchasing all the share capital in the Company’s wholly owned New Zealand subsidiary, Glass Earth (New Zealand) Limited (“GENZL”) for NZ$1 million (C$950,000).  Exploration liabilities owed to Newmont will remain in GENZL as will potential royalty obligations relating to the exploration permits.  Other trade liabilities in GENZL are to be settled as part of the sale process. 

Recent encouraging drilling results at the Waihi West permit have been incorporated in the transaction value.  The gold exploration assets are subject to pre-emption rights, exercisable by Newmont. 

Should Newmont not pre-empt, AOR will pay for the GENZL shares by issuing NZ$800,000 in AOR fully paid ordinary shares and NZ$200,000 in cash.  Some of the sale proceeds will be applied to meeting current debts and transaction costs.  It is intended that any surplus AOR stock be distributed to AXG shareholders, subject to any regulatory requirements. 

This should leave AXG as a listed shell company to undertake the second transaction, being a reverse takeover of Chatham Rock Phosphate Limited (“CRP”).

Reverse Takeover of Chatham Rock Phosphate Limited (“CRP”)

CRP is listed on the New Zealand Stock Exchange Alternative board (refer below for more information).   It holds a mining permit over an area off the coast of New Zealand with significant seabed deposits of rock phosphate and other potentially valuable minerals.

 CRP applied for a Marine (environmental) Consent to mine this in July 2014 and was declined in February 2015.  CRP has advised that it is likely to pursue a re-submission of its Marine Consent application and has recently announced that it intends to raise NZ$1.38 million (C$1.3m) by a rights issue to its existing shareholders, in order to advance this project.  CRP applied for five marine phosphate prospecting licences offshore Namibia in mid-2012 and has recently sought to accelerate the licensing process.  

Subject to satisfaction of the various conditions referred to above, AXG may make a takeover offer for all of CRP’s issued shares, by issuing new shares of its own in exchange, such that, on completion it is intended that the Company’s current shareholders will retain 7.5% of the post-transaction Company.  It is likely that Antipodes Gold would then be rebranded as Antipodes Phosphate. 

General & Administration Costs and Transaction Costs

The Company’s ongoing minimalist G&A costs and its transaction costs to plan, prepare and carry out these transactions will be funded by AOR and/or parties associated with it.  It is intended that AXG issue fully paid ordinary shares to AOR to discharge the resultant debt.

Antipodes CEO Thomas Rabone commented: “We are pleased to be presenting this deal to our shareholders. Potentially, it allows the company to meet its debts while providing our investors with a new shareholding and a new direction.  As an NZ-listed minerals portfolio company, Aorere will be positioned, as the new holder of our gold projects, to maintain and develop their encouraging potential – and this transfer is designed to provide AOR stock  to our current investors to still participate in that opportunity.

Plus, by undertaking a takeover for Chatham Rock Phosphate, the ongoing holders of AXG stock will gain an additional investment position – in an experienced junior resource company that is evolving to adopt a more diversified strategy.

This proposed transaction allows for the better realization of value from the Company. We consider it to be in the best interests of the shareholders of all three companies, and will be welcoming our own shareholders’ feedback.” 

Disclosures

• Aorere and CRP are arm’s length parties.  Mr Henderson, a director of the Company joined the AOR board of directors in 2014. 
• There is no formal letter or agreement with CRP in respect of the proposed takeover offer. The takeover offer will be made under the New Zealand Takeover Code by the Company directly to the 800+ shareholders of CRP.  CRP is in favour of the takeover.
• An exemption or waiver to the requirement for a Sponsor will be sought from the TSX.
• Completion of the transaction is subject to a number of conditions, including Exchange acceptance and disinterested Shareholder approval.  The transaction cannot close until the required Shareholder approval is obtained.  There can be no assurance that the transactions will be completed as proposed or at all.
•  Investors are cautioned that, except as disclosed in the Management Information Circular or Filing Statement, to be prepared in connection with the transaction, any information released or received with respect to the RTO may not be accurate or complete and should not be relied upon.
• Trading in the securities of Antipodes Gold Limited should be considered highly speculative.

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

About CRP

Chatham Rock Phosphate is an NZ-listed mineral exploration company, focused on the development and exploration of a marine phosphorite deposit offshore New Zealand.  CRP holds a Mining Permit of approximately 820km2 in respect of the Chatham Rise Phosphorite Deposit located in the offshore Exclusive Economic Zone of New Zealand.  CRP has announced a decision to evolve from its single project focus into a more diversified company, focusing on both on- and offshore phosphate projects. For more information, visit www.rockphosphate.co.nz

About AOR

Aorere Resources, which holds approximately 8% of CRP, is an NZ-listed portfolio investment company, focused on selected New Zealand early stage oil, gas and minerals projects.

Aorere is capitalising on the networks developed and experience gained from establishing and managing Chatham Rock Phosphate, to develop a revised investment portfolio that is proposed to now include AXG’s gold permit interests.  For more information, visit aorereresources.co.nz

About AXG

Antipodes Gold has been focused on establishing gold resources in New Zealand’s Hauraki region – host to low-sulphidation epithermal gold-silver deposits including the Newmont-owned Martha gold mine. For more information on the Company’s properties, and to subscribe to further news updates, please visit antipodesgold.co.nz.

 Thomas Rabone

President and Chief Executive Officer

+64 22 649 9690

thomas.rabone@antipodesgold.co.nz

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) nor New Zealand Exchange Limited has reviewed this release and neither accepts responsibility for the adequacy or accuracy of this release.

NZX Announcement: Rights Issue

Dear Chatham Rock Phosphate shareholder or stakeholder,

This announcement has just been filed on NZX.

Shareholders will receive the offer documents shortly after 17 April – no action is required by you before then.  

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

Tuesday, 31 March 2015 

Rights Issue

As previously advised to the market, the Board of Chatham Rock Phosphate (CRP) has decided to offer a rights issue to shareholders of CRP. The offer price will be $0.006 per share, to raise up to approximately $1.38 million in aggregate.

Shareholders recorded on the register as at the record date will receive renounceable rights to one new share for every existing share held. The rights are intended to be quoted on the NZAX Market.

Applicants may also apply for additional shares under an oversubscription facility. The facility will be subject to shortfall availability. The current timetable for the Offer is as follows:

On behalf of the Board, 

Chris Castle

Chief Executive Officer

Email: chris@crpl.co.nz

NZX Announcement: Media Release - CRP considers reapplying for marine consent

Media Release

18 February 2015                                                       

CRP considers reapplying for a marine consent

Chatham Rock Phosphate is considering reapplying for a marine consent to mine phosphate nodules on the Chatham Rise seabed, managing director Chris Castle said today.

We have decided an appeal is a pointless exercise.  Assuming we win on points of law, we would still need to go back before the same decision-making committee (DMC) who collectively overlooked the key merits of our project, appeared to misunderstand important evidence and submissions and selectively ignored CRP’s information to reach a “no” decision. 

Although they accepted the findings of scientific experts which showed negligible effects in areas such as fish, seabirds and mammals, why would we expect them to look at the other issues any differently the second time around?  While the DMC’s views as to the level of information and certainty that was required to satisfy them were wildly unrealistic and at odds with the intent of the EEZ Act, the reality is that they could simply apply that reasoning again to reach a conclusion that they are unlikely to have an open mind about. 

We have not committed to reapplying at this stage as we need to have confidence the process and the law is workable and the decision makers are technically competent.

However, we have no intentions of giving up. 

This project is too important for New Zealand, as well as our shareholders who have already invested $33 million in this project. 

As well as failing to take account of the economic benefits, the decision makers more importantly failed to consider the critical environmental benefits this project brings to New Zealand.

Chatham Rise rock phosphate would reduce pollution in New Zealand waterways from phosphate run-off and would reduce the application of the toxic metal cadmium on New Zealand soils, as our product contains among the lowest concentrations in the world. It would also drastically reduce New Zealand’s carbon footprint caused by transporting fertiliser inputs from the other side of the world.

We would be an ethical producer of farm inputs, and New Zealand would not be exporting our pollution to other countries.

While the EPA decision has decimated CRP’s share price, we believe it will recover.  When we established CRP in its present form five years ago, it had a market value of NZD 2 million, and a granted exploration licence.

Since then we have raised NZD 33 million, achieved a granted mining licence, completed one of the most comprehensive environmental impact assessments ever submitted, and collected vast amounts of data and scientific reports about the Chatham Rise – much of it used for public good science.  We also have a team of directors and executives who remain fully committed to the project, even though they won’t be getting paid for a while. 

The market value of the company early last week was NZD 40 million, now it is now back to NZD 2 million again.  However CRP now has an extended management group that is the envy of other players in the marine mining sector and a recognised place in the phosphate industry.  Accordingly we are in a very strong position and much better equipped to build on that NZD 2 million platform than we were five years ago. 

Corals

One of the key areas we are most concerned about are the findings on stony corals.  The decision said this was a unique, rare and vulnerable ecosystem.  The DMC  ignored unchallenged evidence that this is a common species found throughout the EEZ. 

We acknowledged the corals may not appear in a thicket or community elsewhere. Our proposed mitigation was to avoid those thicket areas by excluding them from our mining plan but that was not accepted.

We produced the best available evidence, and significant data to identify where the relevant communities were, and develop measures which would have addressed the risks posed to those communities.  We committed to ground-truth the modelling work, adjust mining exclusion areas and move the first three years of mining blocks while ground-truthing occurred.

So, the DMC effectively ignored a solution to their major concern and took a zero-risk/avoidance approach, which is not required by the EEZ Act.

Uncertainty

There are numerous instances where the committee found the scientific evidence insufficient and highlighted its “uncertainty”. This also occurred with the Trans-Tasman Resources application.

The DMC appeared to be unwilling or unable to understand the reality of working in New Zealand’s oceans. There will never be complete information and every environmental decision will have to accept some level of uncertainty.  This DMC’s decision has elevated the EEZ Act’s information principles to a level which, for this project, is both unrealistic and unachievable.

Assuming we decide to undertake another application we will need to clarify, for a new decision-maker, the confused thinking of this DMC on issues they identified as having too much uncertainty.  The information is there and there was an appropriate answer provided to every question – the DMC simply didn’t appear to understand it or otherwise believed it was less risky to decline consent.  

CRP deserved a better and more balanced consideration of its application, and a DMC which appropriately put the issues of risk and uncertainty into their proper context.  That didn’t happen.

The committee showed poor understanding of the purpose of modelling or how it works – and that it is extremely conservative, usually overstating effects several fold.  Its insistence on the need for ground-truthing shows a complete lack of understanding of how modelling is used routinely in land-based applications in New Zealand with great confidence and in marine projects around the world.

The DMC seemed to go hunting for a basis to decline, thus the discussion around uncertainty in relation to much of the modelling, ignoring the conservatism that was identified.  It read as if they were looking for a no or very low impact activity and that is all they were comfortable with granting.

The DMC’s interpretation of the purpose of the Benthic Protection Area coinciding with our application area (BPAs are simply no-fishing zones covered by the Fisheries Act), meant in their eyes the project could not proceed anyway. This is even though these BPAs were established without consideration of interested parties other than the fishing industry, do not maximise the conservation values of the EEZ, and will be reviewed and modified as part of the establishment of marine protected areas.

To attain the level of information and “certainty” about effects required by the DMC would require test mining, an activity that itself requires a marine consent.  This would require the expenditure of hundreds of millions of euros for a purpose-built ship and dredging system to carry out test runs on the Chatham Rise, to obtain certainty about effects. 

But the DMC in fact created a dead-end street, in that they would not even contemplate a short-term consent of a limited duration as a “test” because of the possible risk to the stony corals.  No rational applicant or investor would make such an investment in order to achieve the certainty of information this DMC considers is required. 

If there is so much uncertainty about projects such as ours, why has the government allocated rights to the resource under the Crown Minerals Act and allowed such marine consent applications to be considered, when they stand no realistic chance of being consented?

It seems this committee simply found it easier to say no than yes.  This was despite our proposing more than 60 adaptive management measures to comprehensively deal with every potential concern. 

Understanding financials

The other major concern we have with the DMC’s reasoning is their apparent inability to understand economics.  They relied on a World Bank nominal price for fertiliser to assess the economics of the project, a figure with no relevance to the way the phosphate market operates.

Why would we pursue a project that is at best marginally profitable?  We issued an announcement to the NZX only last month advising that based on current exchange rates our profitability before royalties and taxation would be close to $100 million a year. 

There are few New Zealand companies that generate profits of that level, and it is unfathomable to understand how that could be considered modest.

In terms of wider economic benefits CRP would pay port charges of several million dollars a year, and external employment opportunities would be created in the port, in the hospitality sector, on the mining ship, undertaking environmental monitoring, and in the agriculture sector – including many on the Chatham Islands.

The income earned per square kilometre of seabed affected by a single mining pass is NZD 9.7 million, compared with only NZD 9,000 annually from bottom trawl fishing. This income from mining is achieved without any impact on fishing yields or fishing industry profitability, according to joint statements signed by fish scientists and fisheries experts.  

Applying again

Our decision to consider resubmitting will depend on whether the Environmental Protection Authority, charged with interpreting the relevant legislation, can make significant changes to its processes.  We would not expect to re-litigate areas not in contention and we would expect the EPA to sharpen its act in terms of the quality of its processes and decision-makers, and the way it manages costs.

We remain convinced the law needs changing – it is obvious in order to avoid the same sort of outcome with other similarly well-prepared applications.  Even the committee said we had produced hugely detailed information - yet it still fell short of the legal requirement, as the DMC saw it.

Even more farcical, we need a marine consent (which we have been denied) to go out and get the additional information the DMC considered was required – how logical is that?  The EPA has tied the process completely up in knots and created a closed loop. 

The process needs to have better communication between the DMC and the applicant, offering the opportunity to identify concerns and options for solutions.  It needs to embrace the purpose of the Act and become solution oriented, rather than focusing on reasons why the project should not occur.  Otherwise what is the point in having such legislation in place – it simply becomes Clayton’s law.

This is not a victory for conservation – it is actually a tragedy for New Zealand’s countryside. The hypocrisy of our opponents is unbelievable, willing to export our environmental footprint to other countries by continuing to import polluting products. 

96% of New Zealand is under water and it is morally indefensible to not accept that some development and environmental effects will take place there. In addition, conservation costs money. The scientific outcomes and the taxes and royalties from projects like ours will help lay the groundwork and pay for the surveys that will identify areas of the marine estate most deserving of conservation.

The fishing industry is essentially entirely environmentally unregulated and destroys 3000 km2 of new seafloor and re-scrapes 47,000 km2 of already damaged seafloor every year – vastly more than the 30 km2 of seafloor we propose to mine every year.  Yet fishing claims we are a greater environmental threat.

The EPA needs to be neutral, rather than advocating as an environmental protector without due regard for other considerations, and if the Government seriously wants to promote development then it needs to speak up about the potential benefits of the project.

The decision makers must have the right mix of expertise to assess the merits and risks of marine projects. Our DMC didn't. The DMC needs at least one scientist who has the mental firepower to understand all the evidence, and at least one person who understands how risk and uncertainty is managed in the real world.

New Zealand can become a world leader in marine technology and expertise worth billions of dollars. Not a single person in the DMC, the EPA, the NGO's, or any of the opposition see that what is at stake is potentially a lot more to New Zealand than phosphate. And that is without including the significant environmental and economic benefits of our product, including low cadmium, low carbon footprint and low run off into waterways.

Media misinformation

CRP would also like to address some of the more seriously incorrect claims of fact made in the media over the past week, most particularly in the Sunday Star Times.

Firstly CRP is not proposing to dredge a “huge swathe” of the seabed.  It is proposing to mine 30 km2 a year.  This compares with 50,000 km2 the fishing industry bottom trawls every year. That is a “huge swathe”. The total CRP project mining footprint of 450 km2 for 15 years is only one quarter of 1% of the Chatham Rise. 

Secondly it was never “generally agreed” $169 a tonne is required for the project to break even.  CRP has never stated a break even market price. However, as the mining cost is roughly the cost of transporting the product from Morocco, the world price would need to be near zero before we could not compete in the local market.

Thirdly while New Zealanders might not know much about the 4.1 million km2 Exclusive Economic Zone as a whole, the 19,000 km2 of the Chatham Rise is the best studied area of the EEZ. This is largely thanks to the work CRP has undertaken, building on the 63 years of work since phosphate was first discovered on the Rise in 1952.

Despite what environmentalists might wish for, significant amounts of the money spent on scientific research is spent by companies seeking to get a financial return.  While SST writer Rod

Oram’s claim that $5 million a year is spent on marine science is rubbish – NIWA’s vessel Tangaroa costs an estimated $20 million a year to operate - these numbers are insignificant compared with the $100 million spent by CRP and TTR in recent years and the $70 million in present day terms spent by scientists previously in the CRP resource area.

The weirdest claim in the SST was this: “The minerals they want for farming on land are the ones that help make the fishing grounds so fertile.  We need logical choices. Threatening fishing to further farming is not one.”

Firstly, as noted before, the DMC found our proposal does not threaten fishing.

Secondly there is no fishing in the area we are proposing to mine, which is why the fishing industry unilaterally surrendered it as a no-fishing zone.

Thirdly there is absolutely no way phosphate helps make fishing grounds fertile.  The phosphate is bound within the phosphate nodules and cannot enter the water column.

Fourthly, no fish species have ever been observed eating rock phosphate nodules. 

A couple of commentators have picked up the idea of spatial planning, a concept we have advocated all along.  CRP’s marine consent proposals included recommendations on how spatial planning could be used to manage the potential effects on the coral communities.

 Marine spatial planning is a big issue for New Zealand. We believe a critical first step is to review the benthic protection areas enshrined in fisheries regulations as they don’t consider other uses such as minerals.  They could be modified to achieve the same conservation goals while allowing other uses of marine space, and not just areas chosen by the fishing industry because they have no commercial quantities of fish.

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

NZX Announcement: Media Release - CRP marine consent decline means New Zealand is closed for business

Media Release

11 February 2015                                                  

CRP marine consent decline means New Zealand is closed for business 

A decision by the Environmental Protection Authority to decline a marine consent application by Chatham Rock Phosphate is a seriously negative signal for New Zealand business, managing director Chris Castle said.

“It will make it even harder, if not impossible for companies to attract capital for new projects in New Zealand.  As the second application of its kind there have been some improvements in the process and were able to learn a lot  and apply those lessons.  If we can’t succeed having invested $33 million over seven years, then obviously the government is not serious about economic development.”

 “We had a strong level of agreement by scientific and other experts from both sides that the environmental effects were either limited or manageable.” 

“Obviously we need to take a bit of time to digest what the decision means and what our next steps will be, the options being an appeal, resubmitting, or walking away.”

 “To say we are bitterly disappointed is an understatement.  We are aghast.  The entire government process, and the EPA in particular, seems afraid to say yes to any project that involves any kind of environmental impact and that is simply not good enough if we are to provide a future for our country’s young people.”

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

NZX Announcement: CRP Secures Additional Capital

10 February 2015

CRP Secures Additional Capital

As detailed in the recent notice of meeting for the special meeting to be held on 19 February 2015, Chatham Rock Phosphate (CRP) has a continued need to raise new capital. This is particularly given the unforeseen delays with receiving the decision on our marine consent application.

CRP has today entered convertible loan agreements with qualified investors to raise a total of $245,000 in convertible loans. The summary terms of these loans are:

 Instrument:                     Interest Free Mandatory Convertible Loan

 Conversion Condition: Approval of the resolution to ratify placements at the 19 February special meeting of CRP shareholders. If the resolution is not approved, the convertible loans will require repayment on 1 June 2015 and CRP will be required to pay interest on the loans at a rate of 15% per annum.

 Conversion Price:           The Loans will convert to ordinary shares of CRP in March 2015 at a 15% discount to the 20 day volume weighted average price of CRP’s shares on the NZAX market.

As previously announced to the market, the Environmental Protection Authority has advised that its decision on the outcome of CRP’s application for a marine consent over an area of the Chatham Rise in New Zealand territorial waters will be released tomorrow. The CRP Board has decided to hold off on any further capital raising pending the outcome of the decision.

On behalf of the Board,

Chris Castle

Chief Executive Officer

Email: chris@crpl.co.nz

NZX Announcement: Media Release - CRP Assists with Namibian environmental pilot

Chatham Rock Phosphate is sharing its experience of New Zealand’s environmental consenting regime to assist Namibia in designing an environmental assessment process for its seabed phosphate resources.

The Namibian government sought input from interested parties to define the content of an Environmental Impact Assessment (EIA) of phosphate mining off Namibia and on-shore phosphate processing.

 CRP has just concluded a multi-million dollar process seeking a marine consent from New Zealand’s Environmental Protection Authority.  A decision will be announced next week.

CRP has applied through a Namibian subsidiary to explore marine phosphate deposits in Namibian waters. The applications will be considered by the Ministry of Mines and Energy when Namibia’s regional EIA is completed and the moratorium on exploration is lifted.

Managing Director Chris Castle said CRP decided to comment on the Namibia seabed environmental assessment project given the company’s first-hand New Zealand experience.

 “CRP’s environmental research and consultation had to be of the highest quality to comply with the rigorous standards demanded by the EPA process. This was demonstrated by the fact that the conferencing between experts during the marine consent hearing process achieved broad levels of agreement on most of our scientific findings.

 “We were told by Namibian government officials that New Zealand is viewed as developing international best practice standards for marine mining and so we are keen to support efforts for that to be achieved as widely as possible.”

 CRP was awarded a mining permit over the key resource area on the Chatham Rise in December 2013 and submitted its weighty Environmental Impact Assessment in May 2014 as a prelude to the marine consent process.

 “More than $30 million has been spent on the project in the last seven and a half years covering exploration, engineering and environmental studies,” Mr Castle said.  “CRP investigations have contributed to the Chatham Rise being now regarded as one of the best researched and understood marine environments in the New Zealand Exclusive Economic Zone.”

The research undertaken by CRP over the past four years has included analysis of oceanographic conditions, trace elements and toxicology, fish population dynamics, mammal and seabird behaviours, sea floor environmental surveys, plus modelling the interconnections of marine organisms,  sediment plume dynamics, the distribution of benthic communities, and the potential impacts from mining on the marine ecosystem.

 The information provided by CRP to the Namibian government includes electronic links to the EPA website containing the full EIA, transcripts of the hearing, expert evidence, public submissions and associated information presented during the 26-day hearing process.

The response, based on recent experience, includes CRP’s commentary on the tasks required for a robust assessment of the marine environment and the potential impacts of marine mining.  In its response CRP emphasised the importance of identifying and consulting with existing interests, collecting baseline information on oceanographic conditions and environmental linkages and sensitivities, and using numerical models to predict the nature and extent of impacts from marine mining. 

Chris Castle, Managing Director +64 21 558 185 or chris@crpl.co.nz

NZX Announcement: Notice of Special Meeting of Shareholders

Notice is hereby given that a Special Meeting of Shareholders of Chatham Rock Phosphate Limited (the Company) will be held at the offices of Duncan Cotterill Lawyers, Level 2, 50 Customhouse Quay, Wellington on Thursday, 19 February 2015 at 11:00am.

Items of Business

A.           The Chairman’s introduction.

B.           Addresses to Shareholders.

C.           Shareholder discussion.

D.           Resolution.

Ordinary Resolution:

To consider, and if thought fit, to pass the following ordinary resolution: 

Other Business

To consider any other matter that may properly be brought before the Special Meeting.

 Proxies

Any shareholder who is entitled to attend and vote at the Special Meeting may appoint a proxy to attend and vote instead of him or her.  Such proxy need not be a shareholder of the Company.  The Chairman of the Company is prepared to act as proxy.

To appoint a proxy you should complete and sign the enclosed Proxy Form and return it by delivery, mail or fax to the share registrar of the Company:

If you wish to vote by proxy, you must complete the form and produce it to the Company by delivering it to the Company’s Share Registrar, Computershare Investor Services Limited, Level 2, 159 Hurstmere Road, Takapuna, Auckland, New Zealand, or by posting in to The Share Registrar, Chatham Rock Phosphate Limited, C/-Computershare Investor Services Limited, Private Bag 92119, Auckland 1142, New Zealand. Proxies may also be lodged online at www.investorvote.co.nz. In each case, please ensure that your Proxy Form is completed so as to be received at least 48 hours before the time for holding the meeting.

Where the Chairman is appointed discretionary proxy, he presently intends to vote in favour of the resolution before the meeting.

Ordinary Resolution

The resolution set out in this notice of meeting is an ordinary resolution. An ordinary resolution is a resolution passed by a simple majority of votes of those holders of securities of the Company which carry votes, are entitled to vote and are voting on the resolution in person or by proxy.

Voting Entitlements

Voting entitlements of the meeting will be determined with reference to the Company share register as at 5:00pm on Tuesday, 17 February 2015 (Record Date). Accordingly, only those persons who are registered shareholders of the Company on the Record Date will entitled to vote at the meeting and the only voting rights which may be exercised at the meeting by the same registered shareholders are those attaching to shares which are registered as at the Record Date.

Additionally and in accordance with Listing Rule 9.3.1, persons who have been issued or have acquired securities that are the subject of ratification under the resolution and their “Associated Persons” (as that term is defined in the Listing Rules) are disqualified from voting on the resolution. For a full list of those persons who have been issued or have acquired securities that are the subject of ratification under the resolution, please refer to the Explanatory Notes to this notice of meeting.

 The Company will disregard any votes cast on the resolution by such persons. Any discretionary proxies given to persons disqualified from voting under the requirements set out above will not be valid. Proxies that give express voting instructions to such persons will, however, be accepted.

 Listing Rule References

In this notice of meeting, references to the Listing Rules are references to the listing rules of the NZAX market.

 NZX Approval

This notice of meeting has been approved by NZX Limited. NZX Limited does not accept any responsibility for any statement made in this notice of meeting.

EXPLANATORY NOTES

Resolution: Ratification of Placements

Listing Rule 7.3.5

Listing Rule 7.3.5 (the Placement Rule) allows a company to issue equity securities without shareholder approval provided that the number of equity securities issued is not more than 25% of the equity securities of that class already on issue in the company (and calculated over a rolling twelve month period). The Company’s ordinary shares are equity securities under the Listing Rules and are relevant for calculating the limit applying to the Company under the Placement Rule.

Before issuing any securities under the Placement Rule, the Board of a listed issuer must resolve and certify that the relevant issue is for consideration and on terms that are fair and reasonable to the company and to all existing shareholders.

 The key benefit of the Placement Rule is that it allows listed issuers to act quickly to place equity securities if a suitable opportunity arises. Calling a shareholder meeting or undertaking a pre break disclosure to authorise an issue of equity securities can take three to five weeks. Accordingly with the Company being in a growth phase without operating revenues, having maximum flexibility to utilise the Placement Rule and raise new capital is necessary to fund the Company’s operations.

Why Ratification is Sought

At the date of this notice of meeting the Company has very limited residual capacity to issue equity securities under the Placement Rule. If the resolution is passed, the Company will then have the capacity to issue approximately 88,612,806 equity securities under the Placement Rule.

At the date of this Notice of Meeting the Company is still awaiting the decision as to the grant of a marine consent for the Company’s offshore rock phosphate project. The Company requires additional capital to fund its ongoing business irrespective of the decision outcome. There are three likely outcomes from the decision:

•  The Marine Consent is granted to the Company. The Company will then proceed to developing its offshore rock phosphate project to production. This will include completing some final aspects of the mining vessel design with Boskalis Offshore B.V., negotiating and entering a long term mining contract for the project with a specialist operator, securing a mining vessel and adaption of that vessel. In addition the Company intends to continue funding studies on optimising use of the rock phosphate (particularly as a direct application fertiliser). Emphasis will also be placed on securing purchasers of the rock phosphate both domestically and overseas.
• The Marine Consent is granted to the Company but the grant is then appealed to the High Court. In these circumstances the Company will continue to pursue the matters above however on a decelerated basis while also responding to such an appeal.
• The Marine Consent is not granted. The Company will then consider the detail of the decision and weigh the relative merits of a new application, an appeal of the decision or the possible abandonment of the project.

Accordingly each of these three courses of action requires funding and the quantum required, likely pricing and then application of proceeds

Dilution Effect on Shareholders through Issues made under the Placement Rule

A resulting effect on each shareholder from issues made by the Company under the Placement Rule may be a dilution in their percentage shareholding in the Company. This dilution occurs immediately when shares are issued (or other forms of equity securities are converted into shares). However, such dilution does not take into account the increased prospects of the Company by having further capital. The availability of capital to the Company, in light of the growth and development stage that the Company is in, is critical.

Placements made under the Placement Rule

The persons listed in the table below have received placements under the Placement Rule which are subject to ratification under the Resolution (Placement Securities). The Placement Shares (and Shares to be issued on conversion of the Options) rank pari passu with all existing ordinary shares of the Company.  In respect of the subscribers listed below: Robyn Margaret Hamilton and Aorere Resources Limited constitute “Associated Persons” of the Company for the purposes of the Listing Rules, whilst Christopher David Castle is the Company’s Managing Director.  With the exception of the issue of Placement Securities to Wimmer Financial LLP (constituting payment in scrip for services rendered), the Company received cash for the Placement Securities. Such cash was raised by the Company, for the purposes of ensuring the availability of sufficient working capital, pending the outcome of its Marine Consent application.

NZX Announcement: Media Release - Forecast CRP project financials benefit significantly from exchange rate changes

Media Release

Forecast CRP project financials benefit significantly from exchange rate changes 

27 January 2015 

 Chatham Rock Phosphate today released updated key figures related to the financial forecasts for its project following the recent strengthening of the United States dollar, relative to both the Euro and New Zealand dollar.

A core assumption to the company’s project revenues are that they priced in US dollars and that most operating costs are denominated in Euros. A result of the recent foreign exchange movements is that all key revenue and profit numbers are therefore significantly higher, particularly in New Zealand dollar terms. This is compared to the forecasts included in our market announcement of 23 October when CRP provided a range of financial estimates during its marine consent application hearing to the Environmental Protection Authority.  The figures were provided then to clarify some uninformed comments that arose during the hearing and to ensure there was a properly informed market for the company’s shares.  A decision on the marine consent is due by 10 February 

In the light of the significant changes to the exchange rates, CRP believes it is timely to update those key numbers relating to indicative project economics and cost structures. Shareholders are cautioned that while this demonstrates the positive effect that a high US dollar and low Euro can have on the economics of our project, adverse movements in these currencies can of course have adverse effects on these economics.

Based on existing revenue and cost assumptions, the projected annual profit before royalties is now estimated to be USD69 million (NZD93 million), up from USD54 million (NZD 68 million) announced in October.  Expressed in New Zealand dollar terms this is a 36.8% increase in the projected trading result before royalties and taxes. This figure is calculated after deducting estimated contract dredging costs, incoming port charges, environmental monitoring costs, community contributions, biodiversity offset costs and business overheads.

From this estimated profit Chatham now expects to annually pay royalties of USD6.9 million (NZD9.3 million) up from the previous estimate of USD5.4 million or NZD6.8 million, and USD17.4 million or NZD23.5 million in income tax (previously USD13.6 million or NZD17.2m).

Over an expected project life of 15 years CRP now expects to earn tax paid profits of USD673 million or NZD905 million, up from October estimates of US525 million or NZD663 million. Based on the updated exchange rates, total royalties would be USD104 million or NZD140 million, up from USD81 million or NZD102 million, and income tax would be USD262 million or NZD352 million (previously USD 204 million or NZD 258 million) during the 15 year period.

Valuing CRP on an EBIT (earnings before income and tax) multiple of 6 (which could be considered reasonable for international fertiliser companies) places a value for the company of NZD503 million when the company is in production (expected in 2017/18), compared with a current market capitalisation of NZD42 million.

Stakeholders are encouraged to review our announcement of 23 October when considering this announcement as it included additional assumptions relevant to these forecasts. 

Chris Castle, Managing Director +64 21 55 81 85 or chris@crpl.co.nz

Warning - Forward Looking Statements 

This release contains forward looking statements.  Forward-looking statements and information are not historical facts, are made as of the date of this release, and include, but are not limited to, statements regarding discussions of future plans, guidance, projections, objectives, estimates and forecasts and statements as to CRP's expectations with respect to, among other things, mineral properties and the matters described in this release.

 These forward looking statements involve numerous risks and uncertainties and actual results may vary. Important factors that may cause actual results to vary include without limitation, the timing and receipt of certain approvals, changes in commodity prices, changes in interest and currency exchange rates, risks inherent in exploration results, timing and success, inaccurate geological and metallurgical assumptions (including with respect to the size, grade and recoverability of mineral reserves and resources), changes in development or mining plans due to changes in logistical, technical or other factors, unanticipated operational difficulties (including failure of plant, equipment or processes to operate in accordance with specifications, cost escalation, unavailability of materials, equipment and third party contractors, delays in the receipt of government approvals, industrial disturbances or other job action, and unanticipated events related to health, safety and environmental matters), political risk, social unrest, and changes in general economic conditions or conditions in the financial markets.

NZX Announcement: Allotment of new ordinary shares

Chatham Rock Phosphate advises that it has issued 238,095 fully paid ordinary shares in aggregate to three contractors of the Company (CRP-OCS Consulting Limited, Robin Falconer Associates Limited and LJ Sanders Consulting Limited), in accordance with their respective contracts for services and at an issue price of $0.189 (Payment Shares). These Payment Shares represent partial payment for services and the issue price reflects the 20 day volume weighted average price of a share in CRP on the NZAX market to 31 December 2014.

Full particulars of the allotments are set out below.

 Chris Castle

Chief Executive

Email: chris@crpl.co.nz

NZX Announcement: Media Release - Chatham Rock Phosphate to receive Callaghan R&D grant

Media Release

10 December 2014

Chatham Rock Phosphate to receive Callaghan R&D grant

Chatham Rock Phosphate (CRP) is delighted to announce it will receive a Callaghan Innovation Research and Development (R&D) Growth Grant.

Callaghan provides R&D Growth Grants to increase R&D investment in businesses.  These on-demand, three-year grants provide 20 per cent public co-funding for qualifying firms’ eligible R&D expenditure, capped at $5m per annum. After two years of funding, businesses can be granted a two-year extension of funding.

“We are honoured our project has been recognised.  We consider the grant to be a strong endorsement of the innovation CRP has demonstrated since 2010 in developing a pioneering project in the marine mining industry with strong ties to New Zealand’s most important export earner, agriculture,” managing director Chris Castle said.

Chatham Rise-based rock phosphate will offer the opportunity for New Zealand’s farming industry to derive new environmental benefits from the use of a low cadmium, low carbon footprint, low run-off organic product.

“The grant will enable CRP to increase its expenditure in innovative parts of our business, supporting and growing New Zealand’s scientific and engineering capability.

“Once production starts, CRP expects to be a $200 million dollar a year business with significant on-going investment in R&D.”

Over the past four years CRP has raised more than $33 million, much of which has been invested in scientific research to prepare the information required for a marine consent and mining permit.  CRP is currently in the final stages of its marine consent process, awaiting a decision on its application.  It was granted a mining permit in late 2013.

One of the first priorities of CRP’s research plan is to demonstrate the agronomic effectiveness of direct application of CRP’s phosphorite rock and to develop a strategy for growing the domestic and international market for this phosphorus source. Scientists from AgResearch and Lincoln University will supervise field trials of 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.

Similar trials in the 1980s demonstrated the potential value of the resource as a direct application fertiliser, and these will be updated to demonstrate the applicability of the product to modern farming practices. The emphasis will be on New Zealand farming conditions but the results are expected to be applicable to global markets.

Benefits of direct application of CRP’s product include reduced cadmium build-up in the soil, lower phosphate runoff in waterways, and reduced need for fertiliser application in the medium to long term.

Other research priorities include:

Collecting environmental data from the Chatham Rise to better understand the natural spatial and temporal variability of oceanographic conditions and sea floor habitats

Triialling the placement of hard material on the sea floor to encourage re-establishment of sensitive benthic habitats

Testing components of the mining system at 400 m on the Chatham Rise

Developing novel techniques to monitor the dynamic sediment plume generated by the mining operations.

CRP has already started discussions with New Zealand and international research organisations about some of these projects.

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