Radio NZ business news interview with Chris Castle on the Edison research due out shortly
/Radio NZ business news interview with Chris Castle on the Edison
research due out shortly. The item is about 8 minutes 30 seconds into
the bulletin.
Chatham Rock Phosphate shareholders unanimously approve share issues
/Special Meeting Result
Chatham Rock Phosphate Limited (NZX: CRP) advises that all resolutions before the Special Meeting today have been passed and it has issued new ordinary shares to Subsea Investments II, LLC (Subsea), Boskalis Offshore B.V. (Boskalis), and the Directors of CRP in lieu of directors’ fees.
Issue of shares to Subsea
CRP has today issued 16,867,592 shares to Subsea at an issue price of $0.20 per share.
In April 2012, the Company entered into a convertible loan agreement (CLA) with Subsea. Under the CLA, Subsea had advanced and was owed NZ$3,373,518.37 (Balance).
At the special meeting held today, the Board of CRP sought and obtained shareholder approval in accordance with Rule 7(d) of the Takeovers Code to convert the Balance to ordinary shares. Accordingly, in satisfaction of the Balance, CRP has issued 16,867,592 shares to Subsea at a conversion price of $0.20 per share.
This issue increased Subsea’s shareholding in the Company to 28.8%.
Issue of shares to Boskalis
CRP has today issued 10,595,638 shares to Boskalis at an issue price of $0...22 per share.
In July 2012, CRP entered into an investment agreement with Boskalis Offshore B.V. (Boskalis). Where, subject to shareholder approval, shares are to be issued to Boskalis so that it has a 19.99% shareholding in the Company.
At the special meeting held today shareholder approval was obtained. Accordingly, CRP has issued 10,595,638 shares to Boskalis at an issue price of $0.22 per share.
This issue increased Boskalis’ shareholding in the Company to 19.99%...
Issue of Shares to Directors in lieu of Fees
CRP also advises that it has today issued 120,688 ordinary shares under NZAX Listing Rule 7.3.7 to its directors at an issue price of $0.232 per share in satisfaction of directors’ fees owing to 30 September 2012.
Full particulars of today's share allotments follows below.
Chris Castle
Managing Director
Email: chris@crpl.co.nz
Class of security: Ordinary shares
ISIN: NZWENE0003S0
Number issued: 27,583,918 ordinary shares
Issue price: 16,867,592 ordinary shares at $0.20
per ordinary share 10,595,638 ordinary shares at $0.22 per ordinary
share 120,688 ordinary shares at $0.232 per ordinary share
Payment in cash: Yes
Fully paid: Yes
Percentage of class: 27.75%
Purpose of the issue: For working capital purposes, in payment of fees under a contract for services, and in lieu of payment of directors’ fees
Authority for the issue: Board resolutions and shareholder resolutions
Date of issue: 24 September 2012
Total number of securities on issue following allotments: 126,960,444 ordinary shares
Major economic benefit for NZ from Chatham Rock Phosphate project
/5 September 2012
New Zealanders will be $1.3 billion better off as a result of developing the Chatham Rock Phosphate resource, a study by the New Zealand Institute of Economic Research says.
The highly respected economic research agency was commissioned by CRP to study the economic impacts of its project to develop a seabed phosphate resource on the Chatham Rise. The report is supporting the company’s mining licence application to New Zealand Petroleum and Minerals. An environmental analysis by NZIER is underway.
“Implementing the mining project over 16 years is equivalent to the country becoming $1.3 billion richer today,” the report said. “At least $800 million of that welfare will accrue to people with no ownership in CRP.” On an annual basis it represents a wealth injection of $180 million a year, of which $115 million benefits non-owners of CRP.
The company will be applying for a mining licence within a few weeks to develop a 25 million tonnes rock phosphate resource located at a depth of 400 m on the Chatham Rise, 450 km from New Zealand and 150 km from the Chatham Islands. A marine consent, covering environmental issues, will be sought once the regulations are completed for the newly enacted EEZ legislation.
CRP expects the project to increase New Zealand’s exports of rock phosphate by $230 million a year and substitute for $110 million of domestic imports annually. CRP’s injection of wealth creates flow on effects that generate another $80 million in other non-phosphate exports. “The increase in household incomes generated by the extra wealth allows imports to rise by $170 million over and above the direct impact of CRP.”
The project will generate $300 million of export revenue for each of the 16 years of production, boosting GDP by $380 million. It will also remove New Zealand’s dependence on imported rock phosphate, of which New Zealand imports at least $185 million annually.
“The economic cost of the operation is primarily in the penalty our exporters pay from an appreciation in the dollar. However that penalty is small and the appreciation allows New Zealanders to obtain cheaper goods from overseas.”
The report notes the benefits are sensitive to world demand for rock phosphate. The scenario does not include the investment or environmental costs of the project (which is being assessed separately) and assumes that the increase in domestic production does not reduce the price of rock phosphate.
CRP managing director Chris Castle said the economic benefits of the project speak for themselves:“The project will reduce imports and increase exports of rock phosphate. It will also mean we reduce commodity price risk, foreign exchange fluctuations and security of supply from politically unstable countries and promote a new industry for New Zealand with skilled technical and support roles.
“While our shareholders will benefit, other New Zealanders benefit even more. Not only are there significant economic benefits, there are also strong environmental advantages.”
The NZIER report looks at the direct and flow-on effects of the project including $105 million in profits for CRP, $32 million in tax and royalties, $38 million in transport and $190 million in costs, as well as downstream spending by households.
(To read subject report click here)
Chris Castle, managing director Chatham Rock Phosphate
021 558 185, chris@widespread.co.nz, www.rockphosphate.co.nz
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
+64 21 5581985
chris@crpl.co.nz
PhosphateKing