CRP Limited Market Announcement: Chatham Slams EPA Precipitate Action

/

3 December 2015

Chatham slams EPA precipitate action

Chatham Rock Phosphate advises it intends to oppose an application for summary judgment for costs relating to the marine consent hearing process, surprisingly received last night from the Environmental Protection Authority. The EPA is seeking payment of just under $800,000 of invoiced but unpaid costs.

CRP is considering its legal position but, as a consequence of the EPA’s action, is likely to seek a judicial review of all costs incurred by the EPA and invoiced to CRP during the environmental consenting process, which the company disputes.

Managing Director Chris Castle said CRP has been clear throughout the process that it disputes that the charges are both actual and reasonable as required by regulations, and is astonished the EPA would seek summary judgment when the company has detailed its concerns on several occasions that a large proportion of its costs are neither appropriately or lawfully invoiced to CRP. Our detailed forensic examination of their invoices has revealed, inter alia, that we have been charged for costs unrelated to our application, overcharged in respect of numerous matters, and invoiced for costs where no satisfactory information justifying them has been made available.

“We have strong grounds for a judicial review of all of the EPA’s invoiced costs on the basis the charges are unreasonable and unlawful, and in light of the EPA’s ill- advised actions it appears necessary for this to be laid bare”.

Mr Castle said the company had been working with the EPA throughout 2015 to try and sensibly resolve the situation, and considers it unfortunate for the EPA to resort to the courts when such significant concerns had been raised by CRP and had still not been appropriately dealt with by the EPA.

The total quantum of costs invoiced by the EPA is $2.66 million, of which CRP has paid $1.86 million.

The concerns CRP has relate to several hundred separate cost items that it believes have been significantly overcharged, are not appropriately attributable to CRP’s consent process, or have never been clearly explained or justified. In many instances further information requested to resolve these concerns has not been released.

In addition, the EPA significantly exceeded its forecast budget on the project, and simply continued to incur excessive and unjustified costs which it passed on to CRP without any apparent consideration of whether the charges were appropriate under the regulations.

There are many examples of the EPA charging staff time well above the cost recovery of their salaries and there is a total lack of transparency and accountability about charging value for money or about charges to CRP where there is no evidence of any benefit to the consent process.

“The costs queried include everything from insufficient documentation, to incorrect amounts from expense claims, hotel charges for contractors that include alcohol, and costs those that do not appear be reasonable or justifiable – such as using out of town contractors for roles that should have been carried out in house or at least with local contractors. The EPA rented hotel rooms for meetings of the decision making committee rather than using its own meeting rooms. Exorbitant taxi use by Wellington-based EPA staff for travel within the central city was also passed on to CRP without any further consideration.

“CRP is disputing the full quantum of costs and is not paying the amount claimed until it is satisfied about the validity of the money invoiced.

“We have a duty of care to our shareholders regarding money spent.”

“These costs have not been reviewed independently and we have serious concerns about the transparency and accountability of EPA processes. We note these have also been raised in the proposed amendments to the EEZ Act. The Bill also seeks to address issues of cost recovery that have been raised by ourselves and other applicants.”

CRP is also reserving its position as to whether it pursues a damages claim against the EPA relating to the release of a staff report during the consent process in 2014, which seriously damaged the company’s market value, derailed a London AIM market listing and an associated capital raising.

Download in PDF Form Here

Low cadmium rock phosphate source available in NZ

/

27 November 2015

Chatham Rock Phosphate notes with considerable interest the current news focus on high cadmium levels in New Zealand soils and offers the solution.

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 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,

·       when used as a direct application source of fertiliser, rock phosphate also dramatically reduces by up to 90% phosphate leaching into waterways,

·       benefit the country’s balance of payments and foreign exchange exposure,

·       provide a secure local source of supply.

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.

The build-up of cadmium levels in sheep has caused the Ministry of Primary Industries to 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

 

Media Release: CRP seeks more capital to ensure overseas listing

/

Chatham Rock Phosphate is embarking on a new round of capital-raising in order to hold 12 months forward working capital.

As signalled in our announcement of 21 October this capital is required so Chatham, after its merger with Antipodes Gold, remains listed on the Toronto Stock Exchange. The Toronto listing is being pursued to provide a more sophisticated trading platform for Chatham shares and is expected to be welcomed by our overseas shareholders, many of whom are based in the USA.

“We believe it will facilitate fundraising in Canada, the largest mineral-resources focused marketplace,” according to Managing Director Chris Castle.

“Chatham is seeking to raise $1 million. The shares are being marketed among eligible existing shareholders, new wholesale investors and we will also be continuing to target the farming community”

 

The offer is priced at $NZ0.6c, a 14% discount to recent sales and is open until 30 November or until it is filled, whichever occurs first. 

“This is an opportunity to invest in a company building a wider base focusing on sourcing and trading rock phosphate from several green phosphate sources. We are moving quickly away from being a single project company waiting for an environmental consent and taking more control of our destiny.” 

Following the latest capital-raising among existing shareholders, interests associated with the directors and management are now Chatham’s largest shareholders, with New Zealand farmers and hundreds of other Kiwis owning more than half the company. 

 

Mr Castle said the offer is being marketed as an opportunity to own, via Chatham,  a growing global network of independent sources of low cadmium, low carbon footprint, reactive rock phosphate.

Individuals wishing to take advantage of this offer should contact Mr Castle by email at chris@crpl.co.nz or mobile (021 558 185) in order to receive an application form. Application forms can also be downloaded from the home page atwww.rockphosphate.co.nz

 

About Chatham Rock Phosphate

 

Chatham Rock Phosphate has redefined its goals and objectives. Chatham aims to be the premier supplier of direct application phosphate to the New Zealand and global agricultural sector.  We are passionate about the benefit of direct application fertiliser to sustainable farming and agricultural practices.  Our objectives are to:

·       Achieve consent of the Chatham Rise project and develop the asset

·       Diversify our product mix to include other onshore phosphate resources

·       Maintain our involvement at the forefront of the marine minerals sector to leverage our expertise as a project pioneer

·       Develop a pathway for CRP products for the agricultural and retail sectors.

 

Chris Castle

chris@crpl.co.nz

Mobile: +64 (21) 558 185

 

Media Coverage: Inside Resources - Chatham Rock looking at overseas phosphate

/

See below for coverage from Inside Resources:

Chatham Rock looking at overseas phosphate while it waits to consent Chatham Rise

Eamon Rood - Wed, 21 Oct 2015

Chatham Rock Phosphate (CRP) is looking at overseas phosphate ventures while its Chatham Rise project remains on hold.

CRP’s focus is to supply direct application phosphate to agricultural users in local and overseas markets. It says this is proven to be significantly more environmentally friendly and sells at a premium in some markets despite lower production costs.

It says that getting the Chatham Rise project fully consented remains its main objective.

Chief executive Chris Castle says the company “is still very keen on the project.” However a decision has not been made whether to re-apply to the Environmental Projection Authority (EPA) for a marine consent to mine the Chatham Rise.

CRP is currently reviewing its previous application to the EPA. It has commissioned “a 360 degree review” from key players involved in the last application.

Castle says the company is watching closely how Trans-Tasman Resources does with its re-application bid in the Taranaki Bight.

A decision is expected to be made by March next year. If a re-application does go ahead, the company hopes to lodge the application the following June, with a view to commencing trial mining in September 2019.

Resolving disputes over costs with the EPA, and royalties with New Zealand Petroleum & Minerals, also remains an objective for the company.

Offshore resources

In the interim CRP is looking to diversify to include onshore phosphate resources overseas.

The company is not disclosing where these resources are located or exactly how many are being looked at as negotiations are ongoing. Castle told Inside Resources there are a number located in three different countries.

He says the company is working to lessen its dependence on the Chatham Rise project and “broaden our portfolio to make it more attractive to investors.”

The company describes the deposits as small, well located, low capital cost, “boutique” phosphate resources that it may take an ownership stake in.

If successful, developing the onshore resources can be achieved at lower capital costs and in a shorter timeframe, the company says. Target markets for the deposits are localised, making freight costs less of an issue. CRP may potentially take an ownership stake in the resources.

Capital raising

The company is pursuing capital raisings in New Zealand, Canada and Europe and aiming to complete its backdoor listing on the Toronto Stock Exchange (TSX). It estimates the funding required to list on the TSX -  “while maintaining prudent yet sustainable forward momentum”  - to be about NZD$1 million - about $1000 for each existing shareholder.

Listing on the TSX is contingent on the company completing a merger with Antipodes Gold, which is already listed. CRP expects this to be approved by a meeting of Antipodes shareholders to be held in November. 

UPDATE: Chatham progresses Canadian listing and advances onshore phosphate projects

/

It’s timely to report on Chatham’s continuing progress and also to comment on recent events that have a direct bearing on your Company’s future.

Notwithstanding the staff reductions we made earlier in the year we are very gainfully occupied.

Current initiatives include:

·       Pursuing ongoing fund raising initiatives locally and in Canada and Europe together with possible tertiary market listings where required

·       Making good progress in the merger process with Antipodes Gold to list on the Toronto Stock Exchange as our primary listing, while retaining our NZAX listing

·       Working through the steps required before we decide whether to resubmit our application for a Marine Consent. This includes reviewing the previous application to EPA – we have commissioned a 360 degree review from the key players involved in the last application

·       Working with officials in various government ministries to seek efficiencies in the permitting process

·       Investigating and advancing trading relationships with other participants in the phosphate sector

·       Continuing to build our shareholder base – we now have more than 1,000 shareholders

·       Advancing towards sourcing reactive rock phosphate from several well located on-shore deposits – we may end up with ownership stakes in one or more of these projects

·       Continuing to build farming sector, academic, industry and central government support for the Chatham Rise project and for the use of Chatham rock phosphate as a sustainable, environmentally friendly phosphorous source. As part of this we’ve commissioned further pot tests to be followed by field trials

·       Resolving the fee dispute with EPA

·       Seeking a refund of overcharged mining permit fees

·       Being actively involved and frequently invited to present at fertiliser sector, marine mining, and undersea environmental protection forums.

Recent News

The very recent Overseas Investment Office decision concerning the OceanaGold acquisition of Newmont Waihi indirectly facilitates the cashing up of Antipodes Gold, the company we are in the process of merging with in order to list on the Toronto Stock Exchange. This is very good news with the next step being an Antipodes shareholder meeting to sanction the sale of their gold assets, their name change and the merger with Chatham. That meeting is expected to be held in November and the merger with Chatham will follow.

Impact on Chatham Funding Requirements

Linked to the merger and the subsequent Toronto listing is the TSX requirement to raise sufficient working capital to fund the cost of operations until the end of calendar 2016.

The precise level of funding required depends on a number of factors including the cash retained within Antipodes when we merge, the outcome of ongoing discussions relatingto permit fees and EPA hearing costs, and the extent to which the next Marine Consent application does or does not require previously agreed submissions to be re-litigated. 

Based on our assessment of these factors we estimate the funding required to list on the TSX while maintaining prudent yet sustainable forward momentum is $C880,000 or about $NZ1 million. To put that funding target in perspective that is $NZ1,000 for each existing shareholder. 

Chatham will very soon be in contact with both existing shareholders and prospective investors with a view to sourcing this modest funding target by the end of 2015. 

Restated Goals and objectives

As shareholders will be aware Chatham Rock Phosphate has redefined its goals and objectives and it’s timely to restate these.

Chatham Rock Phosphate (CRP) aims to be the premier supplier of direct application phosphate to the New Zealand and global agricultural sector.  We are passionate about the benefit of direct application fertiliser to sustainable farming and agricultural practices.

Our objectives are to:

 

·       Achieve consent of the Chatham Rise project and develop the asset

·       Diversify our product mix to include other onshore phosphate resources

·       Maintain our involvement at the forefront of the marine minerals sector to leverage our expertise as a project pioneer

·       Develop a pathway for CRP products for the agricultural and retail sectors

Why do we prefer to focus on supplying direct application phosphate?

Three reasons:

1.     It’s the sort of special rock that is in the substantial Chatham Rise deposit

2.     Direct application rock phosphate is proven to be significantly more environmentally friendly toward both soils and waterways

3.     In some markets it sells at a significant premium despite the lower production costs

Why do we intend to develop other on-shore phosphate resources?

1.     Because we can achieve this at a low capital cost and in a much shorter time frame.

2.     Because it reduces our reliance on a single marine source which has not been fully permitted.

3.     Because they are overseas and in jurisdictions that are more supportive of mineral development.

4.     Because we already have the marketing expertise in-house and we already know where to sell the rock.

How well are we progressing with these aims?

1.     After a global search of rock phosphate deposits we have identified a short list of small, well located, low capital cost “boutique” phosphate resources.

2.     We are now in contact with the permit holders and embarking on exploratory discussions concerning both the sourcing of rock for sale and possible joint ownership of the deposits. Our ace in the hole is the expertise and experience of Moroccan Najib Moutia, our vice president strategy and marketing.

3.     Target markets for these deposits are localised, making freight costs much less of an issue.

4.     We will target a range of buyers in these markets, including bulk supply, niche organic/sustainable users, and into the retail market. We are making good ground in all three arenas.

The Chatham Rise timetable from here

November 2015 – Antipodes shareholders approve sale of assets, merger with Chatham and change of name of the merged company

December 2015 – March 2016 - Chatham completes financing programme, Antipodes and Chatham merge with the combined entity listed on the TSX.V and NZAX

March 2016 – decision made to resubmit Marine Consent Application

June 2016 – Marine Consent Application lodged

December 2016 – fast tracked decision released

June 2017 – Marine mining contract finalised and ship conversion commences

September 2019 – trial mining

January 2020 – commercial mining commences

 

In parallel with this Chatham will be steadily building a phosphate trading business in preparation for accepting and marketing the offtake from the Chatham Rise deposit.

Our confidence in achieving these parallel onshore and offshore objectives is based on both our in-house phosphate trading expertise and the progress we have made in just a few months identifying suitable rock phosphate sources and suitable trading partners.

Any shareholder wishing to discuss any aspects of this announcement and Chatham’s business plan can call me on +64 21 558 185, email me at chris@crpl.co.nz, or Skype me at phosphateking.

 

Regards,

 

Chris Castle

 

CEO - Chatham Rock Phosphate Limited

Click here to download this update in PDF Form