Edison research says risks for Chatham Rock Phosphate continue to reduce
/22 August 2012
Independent research on Chatham Rock Phosphate (CRP) prepared by Edison Investment Research (Edison) says the most significant risks relating to the project are easing.
“CRP is moving closer to demonstrating a commercially and technically viable undersea mining project, risks still remain but the most significant are easing.”
“Doubts over the technical viability of undersea seabed mining at the depths CRP is contemplating have reduced substantially, with global dredging major Boskalis taking an equity stake in CRP.
“The other main risk, mining and environmental approvals, will be CRP’s major focus over the coming 12 months.”
CRP commissioned Edison to produce independent research because share-broker analysts do not research the company.
CRP managing director Chris Castle said a summary report is included in Edison’s Asia Pacific quarterly report issued this week. A full report on CRP will be available early next month.
He said he valued Edison’s independent assessment and believed CRP has a strong story to tell. It would inform investors both in New Zealand and internationally and CRP could be measured against a range of international companies.
Edison is a leading international equity research company providing independent research on small and medium sized listed companies for institutions and investment advisers. New Zealand has more than 200 companies listed on the NZX, NZAX and Unlisted exchanges but analysts generally only research the top 50.
Edison is one of the largest independent investment research companies worldwide with more than 350 corporate clients, including a big focus on mining research with nine dedicated mining analysts and coverage of 75 mining companies on major exchanges.
Edison sends its research directly to a relevant international investor audience and provides readership data to its corporate clients. The research reports are distributed to a global database of professional investors, advisors and analysts in major financial centres world wide, plus organisations like Bloomberg, Reuters, Factset and Yahoo Finance.
To read the report go to http://rockphosphate.co.nz/reports/archives/2012/08/22/edison-research-crp-de-risking-continues/
Chris Castle - Managing Director CRP
+64 21 55 81 85 or chris@widespread.co.nz
Boskalis takes 20% shareholding in Chatham Rock Phosphate
/27 July 2012
Royal Boskalis Westminster N.V. (Boskalis) will take a 20 percent shareholding in Chatham Rock Phosphate and assume a seat on the board, in a world-first for the undersea mining industry.
It is the first time a major dredging company has taken a substantial equity position in an undersea mining project.
Boskalis has today been issued shares at an issue price of $0.22 to give it a 15% shareholding in CRP. Subject to shareholder approval, which is intended to be sought in early September, Boskalis will be issued additional shares to move to a 19.99% shareholding. The Board of CRP expects to appoint a nominee of Boskalis as a director of CRP in a few weeks time.
CRP holds a prospecting permit to develop an undersea rock phosphate resource, 400m below the surface, on the Chatham Rise east of New Zealand.
Peter Berdowski, CEO Boskalis, said CRP offers a unique opportunity for Boskalis to get involved in the fledgling deep-sea mining industry.
“This is a very interesting growth opportunity allowing us to draw on our wealth of expertise and to contribute this to the successful development of this unique project, together with our partner Chatham."
CRP Managing Director Chris Castle said he was honoured Boskalis, the industry’s global leader, had chosen to support this innovative New Zealand project.
“Boskalis is a great partner and works very collegially with CRP, despite the difference in size and scope of the companies. It has amassed centuries of knowledge of the marine industry and can call on the best resources globally.”
The agreement allows for Boskalis to subscribe for up to 20 percent of CRP’s issued capital, and to appoint a nominee to the CRP board. The key terms of the agreement are summarised below.
It follows meetings at the Boskalis headquarters in Papendrecht, the Netherlands, in late June to review the past year of activities since Boskalis was appointed as the project’s technical partner to design a process to extract phosphate nodules from the seabed.
The next stage of the project for the remainder of 2012 will involve Boskalis refining its system for recovering and separating the phosphate nodules, applying adapted and proven technologies. The key considerations include capital and operating costs and minimising possible environmental effects.
CRP holds an offshore prospecting permit covering an area of 4726 km2 on the central Chatham Rise. The permit area, in New Zealand territorial waters, is located 450 km east of Christchurch and includes significant shallow seabed deposits of rock phosphate. The initial term of the permit is two years with rights to either extend the prospecting permit or apply for a mining licence.
Establishment of a rock phosphate industry in New Zealand territorial waters has a significant number of economic, environmental and market benefits.
Royal Boskalis Westminster N.V. is a leading global services provider operating in the dredging, maritime infrastructure and maritime services sectors. Boskalis provides creative and innovative solutions to infrastructural challenges in the maritime, coastal and delta regions of the world including the construction and maintenance of ports and waterways, land reclamation, coastal defense and riverbank protection. It offers a wide variety of marine services through SMIT and has other strategic partnerships in the Middle East (Archirodon) and in offshore services (Lamnalco).
The company holds important home market positions in and outside of Europe. Boskalis has a versatile fleet of over 1,100 units and operates in over 75 countries across six continents. Including its share in partnerships, Boskalis has approximately 14,000 employees.
Key terms of Arrangement
CRP and Boskalis have today entered two agreements – a contract for services and an investment agreement.
The contract for services provides for Boskalis to undertake a range of services to CRP in three phases:
- The first phase of services has already been provided and consisted of initial design work on a rock phosphate extraction and recovery system and providing support to CRP on the survey cruises undertaken earlier this year with Odyssey Marin Exploration. The cost of these services to CRP is €500,000.
- The next phase of work will occur over the next six months and will include the provision of geotechnical reports, the conceptual design of recovery and separation systems, environmental impact assessments and transportation options for rock phosphate recovery. The cost of these services to CRP will be approximately €630,000.
- The final phase will occur in the first half of next year and will consist of the final detailed design of the rock phosphate recovery and separation system. The cost of this phase is estimated to be €4 million with the parties splitting those costs equally.
The contract for services then provides that payment for the above work will be met under the terms of an investment agreement between the parties. The investment agreement provides that:
- 14,759,628 fully paid ordinary shares in CRP (representing a 15% shareholding) are issued to Boskalis at an issue price of $0.22 per share.
- The costs incurred for the phase one work detailed above are applied against the issue price due for the shares.
- Subject to shareholder approval, further shares are to be issued to Boskalis so that it has a 19.99% shareholding in CRP.
- Boskalis may provide the balance of the issue price for the shares to CRP either in cash or in satisfaction of the costs payable by CRP for the services provided under the second and third phases of the contract for services.
- If the issue price is not paid in full within 12 months, then all shares that have not been paid for will be transferred back to CRP for cancellation.
Subsea Partial Conversion
In addition to the share issue to Boskalis, CRP has also today issued 3,962,376 ordinary shares to Subsea Investments II, LLC (Subsea) at an issue price of $0.20 per share.
This allotment arises from a partial conversion of the convertible loan advanced by Subsea as approved by shareholders in April this year. This partial conversion reduces the amount owed by CRP under the loan by approximately $800,000 to approximately $2.55 million. Subsea’s percentage shareholding in CRP is maintained at 19.99% as a result of this allotment.
As previously advised to shareholders, it is intended to seek shareholder approval under the Takeovers Code to permit full conversion of the loan and for Subsea to increase its shareholding percentage above 20%. This approval is intended to be sought at the same time as the approval for the further issue of shares to Boskalis.
Chris Castle - Managing Director CRP
+64 21 55 81 85 or chris@widespread.co.nz
Martijn Schuttevaer – Director Investor Relations & Corporate Communications Boskalis
Martijn.schuttevaer@boskalis.com
Class of security: Ordinary Shares
ISIN: NZWENE0003S0
Number issued: 18,722,004 ordinary shares
Issue price: $0.20 per ordinary share for 3,962,376 shares, $0.22 per ordinary share for 14,759,628 shares
Payment in cash: Yes for 3,962,376 shares
Fully paid: Yes
Percentage of class: 23.50%
Purpose of the issue: Partial conversion of the convertible loan advanced by Subsea and equity investment by Boskalis
Authority for the issue: Board resolutions
Date of issue: 27 July 2012
Total number of securities on issue following allotments: 98,397,522 ordinary shares
Chatham Rock Phosphate well advanced with TSX.V dual listing plans
/16 July 2012
Chatham Rock Phosphate is planning to seek a dual listing of CRP shares on the Toronto Stock Exchange secondary (venture) board (the TSX.V).
Directors have resolved to adopt this approach, which effectively separates the listing process from the normally associated financing, usually described as an Initial Public Offer or IPO.
CRP has sufficient shareholders required to dual-list on a number of overseas exchanges without undertaking an IPO.
“Adverse market conditions still prevailing in overseas markets continue to delay the company’s earlier decision to undertake an IPO,” Managing Director Chris Castle said. “However the directors remain determined to provide a more efficient market for the company’s shares.”
Mr Castle said the Canadian market is the most logical market to join, given the number of fertiliser companies already listed there.
“It will provide access to an investor market familiar with our industry and provide investors with a basis for comparison.”
The process to dual list requires the filing of an application, the preparation of both an information memorandum similar to a prospectus and a technical report. As these reports were already being prepared in mid 2011 in anticipation of the IPO, they simply require updating, and this process is now well underway.
“We are also discussing, with a number of parties, the appointment of a broker sponsor who will also need to prepare a report.
“The dual listing should make it easier to continue to source funding by means of private placements in the short term. We still intend to undertake an IPO when market conditions improve,” Mr Castle said.
A number of other New Zealand companies are listed or intend to list on the TSX.V.
Chris Castle
Managing Director CRP
+64 21 55 81 85 or chris@widespread.co.nz
Allotment of Shares to Qualifying Investors
/6 July 2012
Chatham Rock Phosphate Limited (NZX: CRP) advises that it has today issued 1,099,783 ordinary shares at an issue price $0.23 per share to two qualified investors. This has resulted in CRP raising approximately $250,000 in new capital.
Chris Castle
Managing Director
Email: chris@crpl.co.nz
Class of security: Ordinary Shares
ISIN: NZWENE0003S0
Number issued: 1,099,783 ordinary shares
Issue price: $0.23 per ordinary share
Payment in cash: Yes
Fully paid: Yes
Percentage of class: 1.40%
Purpose of the issue: For working capital purposes
Authority for the issue: Board resolutions
Date of issue: 6 July 2012
Total number of securities on issue following allotments: 79,675,518 ordinary shares
Boskalis and Chatham agree on next stage of CRP project
/8 July 2012
Royal Boskalis Westminster N.V. (Boskalis) is now working on the next stage of Chatham Rock Phosphate’s undersea project, following successful meetings in the Netherlands.
Representatives from the two companies have just concluded a number of meetings in Papendrecht, the Netherlands with Boskalis making it clear it wishes to proceed to the next stage of development.
CRP and Boskalis are now entering detailed discussions on agreements detailing the way forward.
The two companies have been working together for the past year since Boskalis was appointed as the project’s technical partner to design a process to extract phosphate nodules from the seabed. CRP appointed Boskalis in June 2011 as a result of a selection process involving three of the four industry leaders.
“We have developed a great working partnership with Boskalis and a wide range of their senior managers, engineers and technical advisers,” Managing Director Chris Castle said. “Boskalis people are very focused on the success of this project and we are working well together.
CRP holds an offshore prospecting permit covering an area of 4726 km2 on the central Chatham Rise. The permit area, in New Zealand territorial waters, is located 450 km east of Christchurch and includes significant shallow seabed deposits of rock phosphate. The initial term of the permit is two years with rights to either extend the prospecting permit or apply for a mining licence.
Establishment of a rock phosphate industry in New Zealand territorial waters has a significant number of economic, environmental and market benefits.
The meetings considered a detailed report from Boskalis on a proposed extraction method for the rock phosphate resource. The report had previously been analysed by four international experts advising CRP who also attended the meetings.
Also discussed were initial findings from the wealth of environmental, geotechnical and engineering data collected during four cruises on the Chatham Rise over 48 days during the 2011-12 summer.
The next stage of the project for the remainder of 2012 will involve Boskalis refining its methodology for recovering and separating the phosphate nodules, applying adapted and proven technologies. The key considerations include capital and operating costs, minimisation of possible environmental effects and the optimisation of operating efficiencies.
Boskalis is also closely involved in associated environmental impact studies presently underway.
Mr Castle said the continuing enthusiasm shown by Boskalis was an extremely significant vote of confidence by such a major world player.
“We have established a great partnership and the breadth of skills and experience that Boskalis can draw on internationally is something we could never hope to tap into by ourselves.”
Peter Berdowski, CEO of Boskalis: “We see the fledgling deep-sea mining industry as an interesting growth opportunity that fits perfectly with our position as the leading dredging and marine experts. The Chatham Rise project allows us to draw on our wealth of expertise to contribute to the successful development of this unique project together with our partner Chatham.”
Royal Boskalis Westminster N.V. is a leading global services provider operating in the dredging, maritime infrastructure and maritime services sectors. Boskalis provides creative and innovative solutions to infrastructural challenges in the maritime, coastal and delta regions of the world including the construction and maintenance of ports and waterways, land reclamation, coastal defense and riverbank protection. It offers a wide variety of marine services through SMIT and has other strategic partnerships in the Middle East (Archirodon) and in offshore services (Lamnalco).
The company holds important home market positions in and outside of Europe. Boskalis has a versatile fleet of over 1,100 units and operates in over 75 countries across six continents. Including its share in partnerships, Boskalis has approximately 14,000 employees.
Chris Castle
Managing Director CRP
+64 21 55 81 85 or chris@widespread.co.nz
View or download the "Boskalis and Chatham agree on next stage of CRP project" PDF
Allotment of Shares to Subsea Investments
/20 June 2012
Chatham Rock Phosphate Limited (NZX: CRP) advises that it has today issued 2,411,219 ordinary shares to Subsea Investments II, LLC (Subsea) at an issue price of $0.20 per share.
This allotment arises from a partial conversion of the convertible loan advanced by Subsea as approved by shareholders in April this year. This partial conversion reduces the amount owed by CRP under the loan by approximately $500,000 to approximately $3.35 million. Subsea’s percentage shareholding in CRP increases to 19.99% as a result of this allotment.
As previously advised to shareholders, it is intended to seek shareholder approval under the Takeovers Code to permit full conversion of the loan and for Subsea to increase its shareholding percentage above 20%. Under the convertible loan agreement CRP has until mid-October 2012 to seek this approval from shareholders.
Chris Castle
Managing Director
Email: chris@crpl.co.nz
Class of security: Ordinary Shares
ISIN: NZWENE0003S0
Number issued: 2,411,219 ordinary shares
Issue price: $0.20 per ordinary share
Payment in cash: Yes
Fully paid: Yes
Percentage of class: 3.17%
Purpose of the issue: Partial conversion of the convertible loan advanced by Subsea
Authority for the issue: Board resolutions
Date of issue: 20 June 2012
Total number of securities on issue following allotments: 78,575,735 ordinary shares
Allotment of Shares to Odyssey Marine Exploration, Inc.
/18 June 2012
Further to the announcement of 17 May, Chatham Rock Phosphate Limited (NZX: CRP) advises that it has today issued 9,320,348 ordinary shares at an issue price $0.23 per share to Odyssey Marine Exploration, Inc. (Odyssey) in satisfaction of payment for services under a charter agreement.
Cruise costs incurred under the charter agreement total approximately USD$5.68 million. US$4 million of the total costs have been paid by CRP in cash.
In accordance with the terms and conditions of the charter agreement, CRP has elected to pay the remaining fees by issuing Odyssey shares in CRP.
This is a positive development for CRP as it allows us to maintain working capital in order to fulfil our work programme. We welcome Odyssey as a Substantial Shareholder in CRP.
Chris Castle
Managing Director
chris@widespread.co.nz
Class of security: Ordinary Shares
ISIN: NZWENE0003S0
Number issued: 9,320,348 ordinary shares
Issue price: $0.23 per ordinary share
Payment in cash: No
Fully paid: Yes
Percentage of class: 12.237%
Purpose of the issue: Payment of fees invoiced to CRP under charter agreement with Odyssey Marine Exploration, Inc
Authority for the issue: Board resolutions
Date of issue: 18 June 2012
Total number of securities on issue following allotments: 76,164,516 ordinary shares
Chatham Rock Phosphate pegs Namibian phosphate ground
/Chatham Rock Phosphate today announced it has applied for five prospecting licences offshore Namibia covering about 45 square kilometres.
The licences, to prospect for undersea phosphate are at water depths similar to the licence area CRP holds on the Chatham Rise, offshore New Zealand.
Managing director Chris Castle said the company’s strategy is to extend the use of the mining capability it has developed to extract undersea phosphate.
“If the project proves successful it will significantly increase the marine rock phosphate resources under our control.
“We think it makes good sense to use the applied technology we are developing in New Zealand elsewhere and Namibia is the most advanced in the development of offshore phosphate reserves.”
Australian company Minemakers Ltd’s Sandpiper phosphate sands project is located about 60 km off the coast of Namibia and has an estimated resource of 60 million tonnes.
“We’re buying into an area that is very prospective, with several other companies undertaking exploration in well proven areas. The conditions are similar to what we already know. Based on the extensive work already completed by Sandpiper we believe the extraction costs appear attractive.”
CRP has also contracted a local agent, formed a local subsidiary company and met with local officials. “The people in the Ministry of Mines & Energy and in the Geological Survey were particularly helpful and we made significant progress in the short time we were there.
Mr Castle said he understood the processing of the licence applications could take a few months.
Chris Castle
Managing Director, Chatham Rock Phosphate Limited
021 55 81 85 or chris@widespread.co.nz
Namibian continental shelf application areas:
+64 21 5581985
chris@crpl.co.nz
PhosphateKing