Likely low cadmium rock phosphate source available in NZ

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Cadmium levels in Chatham Rise rock phosphate are among the lowest in the world, according to Chatham Rock Phosphate Ltd managing director Chris Castle.

Mr Castle said the rock, located on the Chatham Rise seabed showed an average of 2.2 parts per million (expressed as mg/kg of P) from a range of samples gathered by CRP in 2012 from 11 separate locations. The lowest value was 1.3 parts per million with a high of 5.3 parts per million.

This compares with the voluntary limit of 280 parts per million that New Zealand fertiliser companies observe at present for manufactured superphosphate, a limit that is often approached by rock imported from overseas

“The tests we have conducted show our rock phosphate has among the lowest cadmium levels known.  This will be good news for farmers who choose to use our product (either as superphosphate or as direct application rock) when we start production in 2015 and ultimately it will be good for New Zealand food consumers.”

Cadmium is a naturally occurring heavy metal found in New Zealand soils. Excessive levels of cadmium in food can have implications for human health and excessive levels of cadmium in soils can restrict land-use.

The Ministry for Primary Industries is managing the gradual build up of cadmium in New Zealand soils through the cadmium contained in imported phosphate. The cadmium control programme follows research that shows cadmium levels have gradually increased over decades.

The programme recommends farmers and growers work closely with their advisers to determine the most cost effective, efficient and appropriate fertiliser application and land management options.  Since the mid-1990s New Zealand fertiliser manufacturers have blended their high-cadmium phosphate rock with sources lower in cadmium.

Mr Castle said low cadmium levels are one of the environmental benefits of developing a local phosphate resource.  Providing CRP rock phosphate for New Zealand would also reduce New Zealand’s carbon footprint through lower transport costs, and benefit the country’s balance of payments and foreign exchange exposure.  When used as a direct application source of fertiliser, rock phosphate also dramatically reduces soil leaching into waterways.

Cadmium can cause kidney failure and has been statistically associated with an increased risk of cancer and can also cause bone damage. Food is the dominant source of human exposure in the non-smoking population.

A Stuff website report says the build-up of cadmium levels in sheep made MPI ban the export of some offal from animals older than 2-1/2 years.  Testing showed up to 28 percent of sheep kidneys and 20 percent of cattle kidneys sampled between 1989 and 1991 exceeded the maximum residue levels allowed in New Zealand meat of 1 mg per kg.

Health guidelines for soil contamination at the time had a maximum level of 3mg/kg of soil. The natural average level of cadmium in NZ soils is 0.16mg/kg, but when farmland is taken into account, the average is more than double that, 0.35mg/kg, and soils on farms which have had a lot of super phosphate, such as dairy farms, can have as much as 2.52mg/kg.

Dairying areas with high fertiliser use tend to have the highest average contamination, including Taranaki (0.66mg/kg), Waikato (0.60mg/kg) and the Bay of Plenty (0.52mg/kg).

For more information contact Chris Castle on 021 55 82 85 or chris@widespread.co.nz or check out www.rockphosphate.co.nz

 

Allotment of Shares

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7th January 2013

Allotment of Shares

Chatham Rock Phosphate Limited (NZX: CRP) advises that it has today issued 350,455 ordinary shares at an issue price $0.33 per share to qualified investors. This has resulted in CRP raising approximately $115,000 in new capital.

In addition two contractors of the Company (Widespread Portfolios Ltd and Robin Falconer Associates Ltd) have received 94,538 shares, in aggregate, under their respective Contracts for Service at NZD$0.357 per share. These shares represent partial payment for services during the October to December quarter. Pursuant to those contracts for service the issue price of NZ$0.357 per share reflects the 20 day volume weighted average price of a share on the NZAX market to 1 January 2013.

Chris Castle

Managing Director

Class of security:                      Ordinary shares

ISIN:                                         NZWENE0003S0

Number issued:                        444,993 ordinary shares

Issue price:                               $0.33 per ordinary share for 350,455 shares

             $0.357 per ordinary share for 94,538 shares

Payment in cash:                      Yes

Fully paid:                                 Yes

Percentage of class:                  0.344%

Purpose of the issue:                 For working capital purposes and for payment of fees

Authority for the issue:              Board resolutions

Date of issue:                             7 January 2013

Total number of securities        129,960,095 ordinary shares

on issue following allotments: 

 

 

Chatham Rock Phosphate acheives key milestone with Boskalis

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19 December 2012

CRP is pleased to advise that it has agreed with Boskalis to proceed to phase two of its services contract. This phase involves the final detailed design of a system for extracting rock phosphate nodules. This phase is a commitment that is estimated to cost around €4 million and is scheduled to be completed by 30 June 2013.
 
Boskalis is CRP’s technical partner in its Chatham Rise rock phosphate project and is a leading global services provider operating in the dredging, maritime infrastructure and maritime services sectors. In July this year, CRP entered a contract for services with Boskalis Offshore B.V. and Boskalis took a 20% shareholding in CRP. This shareholding was, to a large extent, a prepayment for services that Boskalis was to provide, including for this new phase. It is anticipated that this new phase of the contract would involve only a modest future cash cost, if any, to CRP.
 
To date under the contract CRP and Boskalis have done extensive work refining the extraction system for recovering and separating phosphate nodules applying adapted and proven technologies. Key considerations have included capital and operating costs and minimising possible environmental effects.
 
The Chief Executive Officer of CRP, Chris Castle stated “We are very pleased with the results to date under our contract with Boskalis. The outcomes achieved so far all support the feasibility of taking our project through to production. We have enjoyed a very productive and positive working relationship with Boskalis and are thrilled at this further commitment to our project by Boskalis”. 
 
Chris Castle – Chief Executive Officer CRP - +64 21 55 81 85 or chris@widespread.co.nz

 

Chatham rock phosphate use would drastically reduce farm run-off, says CRP

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18 December 2012  

The solution to run-off of phosphate into waterways lies in more use of direct application rock phosphate fertiliser, according to Chatham Rock Phosphate chief executive Chris Castle.
 
Mr Castle said a range of scientific studies over many years has shown direct application rock phosphate offers strong environmental benefits.
 
CRP has evaluated some of the studies undertaken which compare the use of rock phosphate and super phosphate on New Zealand and international farmland.
 
They show that when applied directly reactive rock phosphate (RPR) is both a very effective sustained release fertiliser and resistant to leaching.

The findings of the studies – some of which go back several years – are supported by Dr Bert Quin, probably New Zealand’s pre-eminent expert on the use of rock phosphate as a fertiliser, who first conducted extensive field trials while working as a scientist for government agencies during the 1980s.

Dr Quin believes nutrients continue to enter waterways from agricultural land, simply because of the type of fertilisers we use. He says the traditional fertilisers used in New Zealand have been single superphosphate (‘super’), which supplies phosphorus (P) and sulphur (S), and urea for nitrogen (N).He says their biggest problems are that they are ‘leaky’ fertilisers.

“Super is prone to run-off of applied phosphorus into waterways in the weeks after application, leaching into shallow sub-surface drains and water bodies on dairy farms, and being leached right through soils with low phosphorus retention such as those in Northland and the West Coast. Urea is prone to volatilisation (evaporation) losses as ammonia gas to the atmosphere, nitrate leaching and nitrous oxide GHG emission.

“By far the most cost-effective option for phosphorus is reactive phosphate rock or ‘RPR’. This is a natural mineral, formed on the sea floor originally, which is a very effective source of sustained-release phosphorus, ideal for maintaining high-producing pasture and extremely resistant to leaching.

Dr Quin estimates switching from super phosphate to RPR and RPR/DAP (diamonium phosphate) blends would reduce average run-off losses of P into waterways by 80-90%.

“This would take P losses below the trigger levels necessary to keep our lakes in a eutrophied state. In 5-10 years, water quality in the Rotorua lakes, for example, would be massively improved.

“Sulphur requirements are easily met by adding in elemental S. Like RPR, this is a sustained release fertiliser. The water-soluble sulphate form of S in super is very easily leached from many soils. As this happens, it takes valuable cations such as calcium and magnesium with it.”

Dr Quin says the time is right for people with the political will and determination to save New Zealand’s environment to stand up and be counted, and force change.

“If we do not, we will come to be viewed as the ‘gutless generation’ by our children and grandchildren.”

He also says anecdotal evidence over the 25 years-plus that some farmers have been using RPR shows eventually, maintenance requirements for phosphorus start to drop significantly because of reduced run-off and reduced fixation onto soil clay particles.
 
He believes there is a need for specific advice for farmers regarding managing or minimising any lag in production following a switch to RPR.
 
 
Other New Zealand and international research

The other research into waterway leaching by New Zealand and international scientists considered by CRP:
 
1. RPR revisited (1): Research, recommendations, promotion and use in New Zealand by BF Quin and M Zaman.
 
2. RPR revisited (2): Long-term farmer experience helps define the role of RPR in grazed pastures by M Zaman and BF Quin.
 
3. Phosphorus fertiliser form affects phosphorus loss to waterways: a paired catchment study by R. W. McDowell, R. P. Littlejohn and J. D.. Blennerhassett.
 
4. Evaluation of two management options to improve the water quality of Lake Brunner, New Zealand by RW McDowell.

5. Potential phosphorus losses in overland flow from pastoral soils receiving long-term applications of either superphosphate orreactive phosphate rock by RW McDowell, RM Monaghan and PL Carey.
 
6. Rainfall intensity and phosphorus source effects on phosphorus transport in surface runoff from soil trays by Francirose Shigaki, Andrew Sharpley and Luis Ignacio Prochnow.

7. Phosphorus Leaching in an Acid Tropical and Triple Superphosphate by E Gikonyo, AR Zaharah, MM Hanafi, and R Anuar.
 
8. Effectiveness of rock phosphate, coastal superphosphate and single superphosphate for pasture on deep sandy soils by MDA Bolland, MF Clarke, and JS Yeates.


Contact Chris Castle on 021 55 82 85 or chris@widespread.co.nz

 

Allotment of Shares

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14 December 2012

Chatham Rock Phosphate Limited (NZX: CRP) advises that it has today issued 363,636 ordinary shares at an issue price $0.33 per share to two qualified investors. This has resulted in CRP raising approximately $119,999 in new capital.

Chris Castle

Managing Director

Email: chris@crpl.co.nz 

Class of security:                                            Ordinary shares

ISIN:                                                               NZWENE0003S0

Number issued:                                              363,636 ordinary shares

Issue price:                                                     $0.33 per ordinary share

Payment in cash:                                            Yes

Fully paid:                                                      Yes

Percentage of class:                                       0.281%

Purpose of the issue:                                      For working capital purposes

Authority for the issue:                                   Board resolutions

Date of issue:                                                 12 December 2012

Total number of securities on issue               129,515,102 ordinary shares

following allotments:                              

 

Share Purchase Plan Documentation and Record Date

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 14 December 2012

Further to the announcement of 30 November, CRP is offering a further share purchase plan to shareholders. The record date for the plan is 5pm today. The plan offers shareholders (as at 5pm today) the opportunity to subscribe for up to $15,000 of new shares at an issue price of $0.33 per share.

A copy of the share purchase plan booklet and top-up offer documentation accompanies this announcement (click here to view). These will be posted to shareholders on Monday.

The issue price of $0.33 per share represents a 17.5% discount to the market price at the close of trading on Friday, 30 November 2012 of $0.40 per Share when this issue price was set and announced to the market.  It also represents the price at which CRP has last completed private placements.

Capital raised will be applied:

  • To refine our mining system design so we can start detailed designs early in 2013.
  • To complete our environmental consent application to submit as soon as the Exclusive Economic Zone Regulations are completed.
  • To further work on and receive our mining licence and marine consent.
  • To undertake further feasibility studies on beneficiation of our rock phosphate
  • If required, to undertake further research work at sea
  • To undertake the required work programmes for the Namibian exploration licences applied for earlier this year.

On behalf of the Board,

Chris Castle

Managing Director

Email: chris@widespread.co.nz

 

Share Purchase Plan

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30 November 2012

Share Purchase Plan

Chatham Rock Phosphate has decided to offer a further share purchase plan offer to Shareholders. The company has achieved several key milestones in the year since its last share purchase plan offer and in order to maintain operational momentum further capital is required. 

The SPP will offer existing shareholders the opportunity to subscribe for up to $15,000 of new shares at an issue price of $0.33 per share. The record date for the plan is 14 December 2012.

The issue price of $0.33 per share represents a 17.5% discount to the market price at the close of trading today and also represents the last price at which Chatham Rock Phosphate completed private placements.

“Eligible persons” (as defined in the Securities Act 1978) are also entitled to apply for any shortfall from the SPP at the issue price. The shortfall shares will be of a number equal to the maximum number of shares offered under the SPP less all the shares allotted under the SPP.

Capital raised will be applied:

  • To refine our mining system design so we can start detailed designs early in 2013.
  • To complete our environmental consent application to submit as soon as the Exclusive Economic Zone Regulations are completed.
  • To further work on and receive our mining licence and marine consent.
  • To undertake further feasibility studies on beneficiation of our rock phosphate
  • If required, to undertake further research work at sea
  • To undertake the required work programmes for the Namibian exploration licences applied for earlier this year.

The Company has generated a lot of momentum for its rock phosphate project and we believe we remain on track to achieve our ultimate goal of going into production on or before New Year 2015. The capital to be raised by this SPP will play a vital role in ensuring the project maintains momentum and reaches production stage in accordance with the current projected timeframes.  

On behalf of the Board,

Chris Castle

Managing Director

Email: chris@widespread.co.nz

 

Chris Lee - Taking Stock - Chatham Rock Phosphate

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Taking Stock 15 November 2012

Note this excerpt was reposted with permission from Chris Lee. To see the article in its original form please go to www.chrislee.co.nz

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One of the most exciting mining ventures on the horizon is that proposed by the tiny listed company Chatham Rock Phosphate (CRP), previously called Widespread Energy Ltd.

CRP, headed by the patient, ex-Brierley (of the 1980s) analyst Chris Castle, has spent many years looking for affordable projects and may hit pay dirt with its exciting proposal to mine some sea bed for rock phosphate shingle.

CRP has spent millions, and attracted international attention, proving that some seabed between Christchurch and the Chatham Islands contains a source of phosphates that can be mined profitably, yet sensitively, in terms of the environment.

The venture believes it will raise minimal environmental issues, that its Dutch partners have the technology to suck up billions of dollars of the tiny phosphate-filled shingle, and that the phosphate will be better for pasture soils than is available from the Moroccan-exported fertilizer that dominates world sales.

Chris Castle will be wise enough to emphasize the additional benefits to New Zealand that his project will provide.

It will have a significant effect on the Chatham Islands, a part of New Zealand that needs a lift.

The Chatham Islands have an estimated 50,000 hectares of pasture that is in need of fertilizing.

It costs the C.I. farmers $800 a tonne to import phosphate, an unaffordable price, so the land there supports a low level of stock units, suffering from poor pasture growth.

The CRP phosphate could reach the Chathams for a price nearer $100 a tonne, and lift pasture growth sufficiently to allow stock units to increase by nearly 10 times per hectare, creating more stock, support the re-opening of the local meatworks, and several hundred jobs, in an area where jobs are hard to find. The world needs food. The Chatham Islands need jobs.

More importantly CRP would need a base and a port.

The CRP project has sufficient value to make a deep water port viable (if it can be built in time), benefiting the CI fishing industry.

Local farming experts believe the project would allow the Chatham Islands to increase stock units from 65,000 to 700,000, and farming income from $4 million to around $50 million, creating 350 real jobs.

These are very large increases.

The rock phosphate itself would reduce New Zealand’s need to import fertilizer from Morocco, effectively turning a nett importing industry into a nett exporting industry.

The project is still not certain to happen.

It has raised money from American investors, it has found the skilled technology partner in Holland (also a project investor), it has raised money via private placements, yet it will still need to raise another $10 – 12 million before the project is properly funded.

Its ultimate benefit to New Zealand is estimated by an Institute of Economic Research analyst as being potentially $1.3 billion.  

The NZ government alone stands to benefit by tens of millions, in tax and royalties.

If Castle can raise the last of the capital required, if the Crown gives the project the green light, if phosphate prices remain at current levels (about one third of the historic highs) and if our currency remains at its current level, then this project would be rewarding for NZ, for the Chathams, for Castle, and for the shareholders in CRP and its associated company, Widespread Portfolio Ltd. (WID)

Castle listed WID many years ago.

Its shares would increase by 500% in value if CRP achieved the results that are anticipated.

Such a result would be a nice reward for Castle, who has been extraordinarily patient and resilient, as he has pursued this and other projects.

Disclosure: My family owns a modest value of shares in WID and CRP.

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Chatham Rock Phosphate water turbidity model shows encouraging results

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12 November 2012

Highly sophisticated computer models of the turbidity from material disturbed during extraction of rock phosphate nodules by Chatham Rock Phosphate have shown encouraging results.
 
The modelling work is being undertaken by Dutch applied research organisation Deltares using complex modelling techniques developed at their Delft headquarters.  Deltares was asked to look at the dispersion behaviour of sediments released during the proposed extraction process.
 
The modelling results will now be independently evaluated.
 
CRP is planning to take rock phosphate nodules from the seabed on the Chatham Rise using a trailing suction dredge.  This will involve jetting to loosen the sediment, sucking the material up a pipe to the ship, separating the nodules and re-depositing the remaining material onto the seafloor.  
 
The Deltares models are designed to predict the turbidity effects and sedimentation patterns of  the material returned to the seafloor, taking into account seasons, currents, temperatures, salinity, velocity, location, method of deposition, etc.  The models are based on the proposed mining plan that involves extraction in identified areas for four days out of 10 to 12, with the rest of the time dedicated to transit to and from port and for unloading.
 
The model parameters are derived from analyses of sand and silt samples recovered during research voyages earlier this year. The modelling is being carried out to identify potential impacts on water column or seabed marine life and to help design a mining system that minimises these effects.
 
The initial findings predict that most of the sediment (10 – 20 cm per cycle) is returned to the seabed parallel to the mining track, near its point of origin.  The thickness of sediments deposited outside the mining area is in the order of a few mm per cycle, and small amounts are transported through the water.
 
The modelling predicts “high sediment concentrations are only observed during the mining activities.  During the transitional period (in between mining cycles) sediment concentrations reduce rapidly.
 
“Sediment concentrations outside the mining area are generally low (less than 1 milligram per litre).  Due to direct placement on the seabed, the average vertical dispersion is limited; sediment concentrations decay rapidly in the lower 10m of the water column.  
 
“Once mining activities are interrupted, maximum sediment concentration values reduce below 0.02 milligrams per litre for the clay fraction (within 72 hours) and below 0.01 milligrams per litre for the silt fraction (within 24 hours).”
 
CRP chief executive Chris Castle said these initial results, which are now to be subjected to further independent review, were encouraging.
 
“The environmental effects have been a key focus in the design of the mining system because we want to minimise the amount of material dispersed in the water column and across the seafloor.
 
“With the current mining plan we expect that about 30 square kilometres will be disturbed each year. Over the entire project life of 15 years that’s just 0.1 per cent of the Chatham Rise.
 
“We’re encouraged by the potentially low environmental impacts predicted by the models.   When added to the low cadmium of the product, its low carbon footprint (compared to imported alternatives) and low run-off features when directly applied to pastures, this potentially provides another significant environmental plus.”
 
Mr Castle said more modelling is being done and will be evaluated, and the results will form part of the information being compiled for the marine consent application to the Environmental Protection Authority next year.
 
Chris Castle – +64 21 558 185 or chris@widespread.co.nz