Chatham Rock Phosphate share price soars on key milestones

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9 October 2012  

Chatham Rock Phosphate’s shares today reached a new high price of 46c – double that of two weeks ago – on the back of several key milestones.
 
The company’s market capitalisation at that price is nearly $59 million, compared with $22 million before the issue of about 30 million shares on 24 September to Boskalis and Subsea Investments.  
 
Since then the company has:

  • applied for a mining licence with New Zealand Petroleum and Minerals
  • received a favourable report by Edison Investment Research stating the shares were worth $1.87 on an un-risked basis, and
  • spent several days on Chatham Island widely consulting with a range of community and industry groups
  • updated senior government Ministers on progress.

 
“It’s been a pretty amazing couple of weeks,” according to Managing Director Chris Castle.  “It’s gratifying to see the market is recognising the potential of this unique project that could have such significant economic, environmental and market benefits for New Zealand.
 
“It will be a great story to tell when we present to the Underwater Mining Institute conference in Shanghai next week.  It will be the third year CRP has updated the marine mining industry on the project’s progress.  CRP is one of the most advanced marine mining projects in the world.
 
“Our visit to the Chatham Islands last week was a great opportunity to provide the community with information on our plans and to listen to their ideas.  We were also able to address any concerns they had and provide information on a wide range of issues.
 
“We received a fantastic welcome and were able to look at potential ways the project could assist the Chatham Islands community.
 
CRP was granted a prospecting licence in February 2010 and plans to apply for a marine consent in the second quarter of 2013, as soon as the regulations for the EEZ legislation are complete.  
 
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. Establishment of a rock phosphate industry in New Zealand territorial waters has a significant number of economic, environmental and market benefits.
 
Other achievements over recent months include:

  • September: An assessment by the Institute of Economic Research valuing the project’s economic value to New Zealand at $1.3 billion
  • July: Boskalis taking up to 20% shareholding  and right to a board seat in a world first for the underworld mining industry
  • June: International phosphate industry identity Najib Moutia assuming a key strategy and marketing role within CRP
  • June: CRP pegging ground offshore Namibia to develop rock phosphate deposits
  • December-April: A four-leg $7 million summer research cruise programme collecting a wealth of data
  • March: American equity fund Subsea taking a cornerstone shareholding.

 


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

 

 

Chatham Rock Phosphate files mining licence application

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28 September 2012 

Chatham Rock Phosphate today achieved another major milestone on the pathway to developing its subsea resource on the Chatham Rise by filing its mining licence application with New Zealand Petroleum and Minerals.

The application is the culmination of two and a half years work since the company was granted a prospecting licence in February 2010.

“The application is a comprehensive summary of the scientific work we have completed and our plan on how we intend to extract the rock phosphate resource,” Chief Executive Chris Castle said today. “It’s a very significant achievement reflecting a huge effort by a very skilled scientific and management team.”

Establishment of a rock phosphate industry in New Zealand territorial waters will have significant economic, environmental and market benefits.

Mr Castle said the mining licence would be assessed by NZPM over the coming months.  CRP plans to file its marine consent application, whose centrepiece will be a comprehensive environmental impact assessment report, in the first half of next year.

“We plan to issue the marine consent application as soon as the regulations for the EEZ legislation are complete.  The current timing for this is April or May 2013, but if the regulations take longer to finalise, we will consider filing the application under the transitional provisions of the existing Continental Shelf Act.

“We need to keep the project timeline aligned with the major capital investment that will be made to develop the required mining technology.”

The mining licence application includes information on the rationale for the application; technical data on the location, physiography, climate, local resources and infrastructure, geology and understanding of the resource; CRP’s proposed work programme; its approach to environmental planning (full information will be included in the marine consent application); the company’s ability to manage the project and an independent economic assessment.

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. Establishment of a rock phosphate industry in New Zealand territorial waters has a significant number of economic, environmental and market benefits.

Today’s milestone is the latest in a list of achievements over recent months including:

  • An assessment by the Institute of Economic Research valuing the project’s economic value to New Zealand at $1.3 billion
  • Independent research house Edison Research saying the project is worth $381 million on an un-risked basis
  • Dredging giant Boskalis taking up a 20% shareholding and board seat in a world first for the underwater mining industry
  • American private equity fund Subsea investing in a cornerstone shareholding
  • International phosphate industry identity Najib Moutia joining CRP as Vice President strategy and marketing
  • CRP pegging ground offshore Namibia to develop further rock phosphate deposits
  • A four-leg $7 million summer research cruise programme collecting a wealth of data.

“We continue to make excellent progress in achieving milestones with our aim of being in production in early 2015.  Everyone involved in the project is focused on ensuring our planning is comprehensive and that we stay on track towards that goal.”

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

 

Edison report values Chatham Rock Phosphate at unrisked $1.87 a share.

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27 September 2012

Edison Investment Research values Chatham Rock Phosphate shares on a success case at $1.87 a share in its first independent report on the company, issued today.

 Wellington based analyst John Kidd said CRP is moving closer to demonstrating a technically and commercially viable undersea mining project.  

He says the equity stake taken by Boskalis significantly reduces doubts over the project’s technical viability.  

He notes CRP’s main focus over the next year will be managing the other main area of risk – mining and environmental approvals.

“In our view Boskalis deciding to join the project at an equity level after completing extensive hands-on due diligence over 18 months is a very material endorsement of the project and of the confidence it has in the technical viability of its mining concept.”

 Mr Kidd says on most scenarios there is substantial upside to the current share price.
 
The report notes that while recovering phosphate from 400m depths would be a world first, three dredging companies were confident it was viable.  
 
The unrisked $1.87 valuation is based on a US$10 million capital raising in 2012 prior to a listing on the TSX-V and assumes full dilution of shares and options. The unrisked valuation on an undiluted basis (assuming existing options are not converted) is around $2.29. Last sale price for the shares is 23 cents.
 
Mr Kidd says the main value drivers are the rock price, foreign exchange movements and mining costs.

The link to the full report is here

Edison Research website : www.edisonresearch.com

Chris Castle - Managing Director CRP - +64 21 55 81 85 or chris@widespread.co.nz

 

Radio NZ business news interview with Chris Castle on the Edison research due out shortly

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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.

http://www.radionz.co.nz/national/programmes/morningreport/audio/2533688/morning-business-for-26-september-2012.asx

 

Chatham Rock Phosphate shareholders unanimously approve share issues

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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