Allotment of Shares and Options

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9 September 2013

Chatham Rock Phosphate Limited (NZX: CRP) advises that it has today undertaken placements at $0.30 per share and issued further CRPOB options.

CRP is presently undertaking a private capital raising offer to qualified investors which has the following key features:

  • CRP agrees an amount of shares to be subscribed for by an investor in aggregate.
  • Half of the shares are subscribed for at an issue price of $0.30 per share (Tranche One).
  • The investor commits to subscribing for the balance of the shares at $0.35 per share within 2 weeks of the Company being granted a mining licence in respect of its Chatham Rise phosphorites project (Tranche Two).
  • For every two shares subscribed for under Tranche One and Tranche Two, one option (CRPOB) is also allotted to the investor.

CRP is pleased to advise that it has entered investment agreements with qualified investors whereby a total of approximately $900,000 in new capital has been committed under this offering structure. As a result CRP is today allotting the Tranche One component of this amount representing approximately $400,000 in new capital.

Chris Castle

Chief Executive Officer

Email: chris@crpl.co.nz

   

Class of security:                           Ordinary shares

 

                                                      Options (CRPOB)

     

ISIN:                                               NZWENE0003S0

 

                                                      NZCRPE0001S3

     

Number issued:                              1,364,008 ordinary shares

 

                                                       682,004 options

     

Issue price:                                     $0.30 per ordinary share

     

Payment in cash:                            Yes

     

Fully paid:                                        Yes

     

Percentage of class:                        0.97% of shares

 

                                                        45.44% of options

     

Purpose of the issue:                       For working capital purposes towards   permitting of                                                         the Chatham Rise phosphorites project

     

Authority for the issue:                     Board resolutions

     

Date of issue:                                   9 September 2013

     

Total number of securities on issue

  following allotments:                        141,633,184 ordinary shares

 

                                                         2,182,938 options

 

 

Media Release: Low impact and high value; seabed rock phosphate is of national significance

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3 September 2013 

Chatham Rock Phosphate today refuted the misinformation media campaign being run by the Deep Water Group and questioned fish trawling’s environmental record.

In media articles George Clement of the Deep Water Group has described Chatham’s proposal to extract rock phosphate as a potential environmental “catastrophe”.

“Such descriptions could be applied to fishing, when you think about the vast area of sea floor trawling disturbs,” Managing Director Chris Castle said.

"Chatham's planned 15-year extraction project will touch a total of 450 km2, far less than 1% of the Chatham Rise. Mr Clement estimates that's about sevent times the size of Wellington harbour.

“In contrast, over the same period fishing will bottom trawl 750,000 km2, about three times the size of New Zealand. Year after year, weighted nets scrape 50,000 km2 of seabed, with bottom-dwelling animals disturbed or destroyed.  Up to 3000 km2 of new territory is disturbed annually - an environmental impact 100 times greater than predicted for phosphate extraction.”

Mr Castle said Chatham has talked to the DWG for three years. 

“We’ve given them huge amounts of information, scientific reports and models showing temporary and very localised impacts on adjacent sea floor and water column. At their request we paid for an independent review of the modelling.  They expressed cautious support for our project for most of that period. Recently the attitude of some members has changed, with no willingness to discuss their concerns.

“We wouldn’t consider extracting phosphate nodules from the Chatham Rise if it caused more than very minor environmental impacts.”

He said Chatham’s operations simply lift the top 30cm of sandy silt and redeposit 85% of it carefully on the same seabed after extracting the nodules – the net effect is selected areas of seabed are lowered about 5cm. Modelling indicates the material returned will not be widely dispersed, and the sediment that doesn’t immediately settle will rapidly dilute to insignificant levels.

“Our draft environmental impact assessment (EIA), supported by 30-plus expert reports, has identified no long-term impacts on key spawning, juvenile and young fish habitat. Any potential impacts are confined to our limited extraction areas, and are short-term, reversible, and of low environmental risk. “

He also notes the fundamentals of Chatham’s proposed method are routinely used in dredging around the world.  The only new aspect is undertaking this work at 400m. The operations will be intermittent (3 days in every 10 day cycle) and spread among geographically separate locations within the licence area.

“But while bottom trawling – ploughing vast tracts of the EEZ seabed decade after decade - requires no environmental consents, our project needs a mining licence and a marine consent. These cost millions of dollars, require years of research, consultation and official process, and involve full public scrutiny.

“The annual fish trawl footprint on just the Chatham Rise during the 2009-10 fishing year was 19,051 km2.  As hoki spawning and growth occurs over the entire 189,000 km2  Rise, DWG already know they can continually bottom-trawl 10% of the area without harming juvenile fish stocks, so Chatham’s extra annual 30 km2  is of little significance.”

Mr Castle said New Zealand is predicted to be $900 million richer as a result of the new phosphate industry and Chatham will be generating annual exports or import substitution of $300 million, plus supporting farming, our biggest earner.

By area, the economic value of the phosphate resource is 500 times greater than fishing; expected to yield $9.1 million per km2. Bottom trawling yields less than $20,000 per km2.

“The benthic protection areas, of which the fishing industry is so proud, were established to preserve areas of sea floor not already affected by bottom trawling. They were determined without considering the economic importance of resources such as rock phosphate.

“Thanks partly to Chatham’s $20 million investment, the Rise benthic environment is now one of the best known parts of our marine territory, and can now inform resource and environmental management decisions, possibly including modifying those benthic areas.

“We’ve spent three years collecting data on oceanographic conditions (tides, currents, turbidity), benthic life, and analysing the impacts of disturbances on the seafloor and in the water column so we can minimise impacts and protect areas of benthic habitat.”  

Mr Castle said this project is important to provide fertiliser security for farming.  Most rock phosphate used to make fertiliser now is imported from Morocco. It’s high in cadmium, involves high transport costs and has a significant carbon footprint.

Chatham Rise rock phosphate, as an ultra-low cadmium direct-application fertiliser, has proven to be as effective as processed fertilisers while reducing run-off effects on New Zealand waterways by up to 80%. 

Rather than being an “environmental catastrophe”, it’s a project of national significance offering significant economic and environmental benefits.

For further information contact Chris Castle on 021 55 81 85 or email chris@crpl.co.nz

 

Statement to TV3

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1 September 2013  

Chatham Rock Phosphate will not be entering into a public  debate with third parties concerning its proposal to recover rock phosphate nodules from the Chatham Rise.

The appropriate forum to consider our proposal is the Environmental Protection Authority under the auspices of the EEZ and Environmental Effects Act.

This forum will involve people with the expertise to evaluate our application and the dozens of scientific reports we will be submitting in support of that application.

Any party is entitled to make their own submission as part of that process.

Recent comments made by the Deep Water Group and Sanford Limited have been largely incomprehensible and reflect that either they have not read our plans and modus operandi, or do not understand what we propose.

In either scenario it’s pointless attempting to debate the matter through the media.

Chris Castle

Managing Director

 

Media Release: Edison maintains unrisked valuation above $2, assesses fundraising efforts

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Media Release

Edison Group has kept a unrisked valuation above $2 for Chatham Rock Phosphate in its latest update in which it examines the company’s ongoing efforts to raise the last of the capital it needs to start producing rock phosphate from the seabed on the Chatham Rise.

The unrisked $2.04 valuation is not much changed from that earlier in the year, but Edison has raised its risk assessment on the basis of a slowing in regulatory approvals and Chatham raising only part of the capital it still needs, in the recent Initial Public Offering.

Edison notes that “explicit positive sentiment received by CRP from government authorities in April, informing that its mining permit application would be treated with priority, has yet to bear fruit”.

“Uncertainty has weighed on investor confidence, which was an undertone to a weak result from a recently completed public capital raising.”

Edison estimates Chatham needs $7 million to fund its pre-development work, of which half are costs associated with the environmental consenting process.

“CRP has launched a further offer to professional investors that, if successful, and combined with an assumed early part-exercise of a significant tranche of success-related share options by an existing cornerstone investor, should serve to meet its remaining pre-commissioning capital needs.”

The non-retail linked offer is for up to 5 million shares at 32c to raise $1.6 million followed by a further 5 million shares at 35c to close two weeks after the grant of a mining licence to raise a further $1.75 million. The new shares will have a 2-for-1 70c option exercisable within three months of the marine consent being granted.

Edison says the extended approval processes have added a delay of six months to the timelines the company was targeting until a couple of months ago.

“We now consider it more likely that a distinct two-stage investment decision will unfold, with the stages reflecting the sequenced granting of a mining permit and marine consents.

The first stage would likely see contract miner Boskalis commit to an initial capex programme involving low-risk, transferable equipment that could be redeployed in the event of further delay or worse. The main commitment would come following the project receiving marine consents, probably in mid 2014, which would act as a trigger for Boskalis to commit the substantial spend to procure and fit out the mining vessel.

To see the report go to www.rockphosphate.co.nz/investors

For further information please contact Chris Castle on 021 55 81 85