Uncertainty should not paralyse development says Chatham Rock Phosphate

4 July 2016

Regulators must decide on acceptable impacts to achieve New Zealand’s social, economic and environmental goals, Ray Wood, Chief Operating Officer of Chatham Rock Phosphate, told the New Zealand Marine Sciences Society today.

In a review of the Environmental Protection Authority decision to decline Chatham’s marine consent application last year, Mr Wood said society must accept some development but endeavour to minimise its environmental impacts.  

“Science’s role is to help society deal with uncertainty and decide on acceptable impacts.” 

The consent process highlighted a number of environmental concerns, which were mostly allayed or more clearly defined as a result of caucusing between interested parties and Chatham.

Experts agreed marine mammals, sea birds, major fish stocks and primary productivity were unlikely to be affected, uranium was not an issue and water toxicology effects would be very low.

“But even after expert caucusing, the decision making committee interpreted the results differently from Chatham,” he said.

It declined the application on the basis of perceptions of significant and permanent damage to the benthic (sea floor) environment, modest economic benefits compared to environmental effects, proposed adaptive management measures not addressing concerns and a requirement to favour caution and environmental protection. 

“We think the committee didn’t understand or trust the numerical modeling of either the plume (created during the mining process) or of benthic communities.  Therefore the committee didn’t believe that the proposed conditions could address the adverse environmental effects through adaptive management.

 “Uncertainty is certain for all marine projects; sampling is difficult and expensive, data are often incomplete and regional context is often lacking.” 

Mr Wood said science is able to predict environmental effects, through the laws of physics, chemistry and biology.

“While regulators want to minimise uncertainty through the use of the precautionary principle and adaptive management, that should not result in paralysis by analysis.”

He said adaptive management allows approval if risk thresholds are agreed, monitoring is adequate and operations stop if thresholds are exceeded.

“Managing uncertainty requires confidence in the predicted nature and extent of effects and monitoring to identify variations from predicted effects.”

Mr Wood noted while the EPA has guidance to deal with risk and uncertainty under the hazardous substances law, there is nothing equivalent in the Exclusive Economic Zone Act.

“Uncertainty of outcomes is not sufficient to deny permission for projects to proceed. 

“Uncertainty can be managed.  Risk thresholds can be agreed if the effects and benefits are well defined and understood.”

Inherent uncertainties mean absolute effects and benefits are probably never known but probable maximum, minimum and likely effects and benefits are known.

He said science is able to reduce the scale of uncertainties by improving knowledge regarding risks and predicted effects.

Adaptive management reduces uncertainties through learning from outcomes.

Mr Wood said the committee did not accept the adaptive management conditions proposed by Chatham because it appears they were unwilling to risk any environmental impact.

He said Chatham would consider reapplying for a marine consent following further consultation with stakeholders, a review and potential revision of the project and further research on essential scientific issues.

Ray Wood, Chief Operating Officer +64 27 575 8989  or raywood@crpl.co.nz

 

Video Of Extraction Method

Share Purchase Plan Allotment

1 July 2016

 Chatham Rock Phosphate Limited (NZX: CRP) is pleased to advise that its share purchase plan (SPP) has been oversubscribed. 

CRP received applications for $616,137.71 under the SPP (in aggregate) against a total offer of $600,000.

Given the size of the excess and the administrative costs associated with undertaking scaling, CRP has decided to allot shares for the excess as a placement under Rule 7.3.5.

As a result of the above, the offer has no shortfall and the underwriters are released from their underwriting obligations for the SPP.

Placements

In addition, CRP has issued 8,748,333 further shares to qualified investors (New Shares).  The New Shares were issued at an issue price of $0.006 per share, being approximately $52,500 in aggregate. This completes all issuances that were permitted to be made under the pre break announcement dated 19 April 2016.

Full particulars of the share issues are set out below.

The Board is thrilled with the outcome of CRP’s capital raising efforts and thanks shareholders for their support of the company.

For and on behalf of the Board,

 

Chris Castle

Managing Director

 

 

Chatham Rock Phosphate (CRP) attends farmers’ seminar

30 June 2016

Chatham Rock Phosphate (CRP) attends farmers’ seminar

As advised in earlier shareholder communications, CRP is committed to supporting the development of more sustainable and resilient farming practices in New Zealand.

To learn more about the issues facing farmers and the farming sector CRP's executive team attended a seminar on how changes to fertiliser application and pasture management can improve a farm’s resilience, environmental footprint and financial performance, and the changing requirements to document farming practices and their environmental impacts.

The seminar was in Hastings and was hosted by Abron and the Hawkes Bay Regional Council.

Abron has been established for nearly a decade, operates throughout much of New Zealand and offers a fertiliser system designed to result in increased pasture and crop yields, healthier soils, and reduced environmental impacts.  

CRP is becoming actively involved, both in New Zealand and overseas, in the sourcing and marketing of fertiliser products, most notably rock phosphate intended for direct application. This clearly involves building relationships with both the ultimate users (the farmers) and with distributors/supplier and manufacturers of these products.

This strategy is being implemented now, preceding the development of our Chatham Rise rock phosphate deposit, and using our existing in-house expertise, because there is a clear and increasing demand for more environmentally sensitive fertiliser products. 

 

Kind regards,

Chris Castle

CEO

Chatham Rock Phosphate Limited

+64 21 558 185

Chatham Rock Phosphate will help save our rivers

The use of Chatham rock phosphate by NZ farmers will improve water quality, reduce carbon emissions, slow the accumulation of cadmium in soils and offer security of supply in a volatile market.

CRP has been observing with great interest the evolving dialogue about water quality in NZ’s waterways and the escalating concerns about nitrate and phosphate run-off.

None of this is news to us.

Chatham rock phosphate, found on the Chatham Rise, has been studied and tested by New Zealand scientists and agricultural institutes for more than 50 years. These tests have established that rock phosphate from the Chatham Rise has the following characteristics:

1.      It is a reactive phosphate rock that when applied directly to the soil binds in a manner that is both a very effective fertiliser and can reduce the runoff of phosphate to waterways by up 80% less finishing in the waterways when it rains heavily. We have already released this information to shareholders and the public . We have also provided advice on this matter (together with references to the relevant research findings) to the Minister for the Environment as long ago as December 2012.

2.      Cadmium levels in many New Zealand soils are at unacceptably high levels after decades of fertiliser application using phosphate rock sourced from Nauru. Due to this NZ’s two fertiliser manufacturers have volunteered to keep cadmium levels in manufactured phosphate fertilisers under 280 parts per million.  In recent years the predominant source of rock phosphate has been rock imported from Morocco. Cadmium levels can be so high in this phosphate rock that it needs to be blended with rock imported from other countries. Chatham phosphate rock has much lower cadmium levels, about 20 parts per million and is potentially valuable as a blend for manufactured phosphate fertilisers.

3.      Reduced carbon footprint. At present every kilogram of phosphate based manufactured fertiliser applied to New Zealand soils has already generated carbon emissions of 216 grams. The equivalent emissions for Chatham Rock Phosphate are estimated to be a quarter of that, principally because the transport related emissions are so much lower.  

4.      Chatham rock phosphate applied directly to the soil contains elevated levels of calcium which plays a critical role in plant root development and nutrient uptake as well as improving the soil’s physical structure and enhancing the life cycles of microbial life. 

These attractive environmental attributes do not come at the expense of reduced fertiliser effectiveness. Extensive independent field trials in the 1980s, corroborated by recent pot trials undertaken by Lincoln University, demonstrate that Chatham Rock Phosphate is, over time, as effective a fertiliser as superphosphate or even triple superphosphate.

Not using Chatham phosphate rock as a fertiliser will cause the New Zealand environment damage that could have been avoided. This will ultimately result in either a degraded environment or huge clean-up costs.

The economic benefits of using locally sourced rock are a no-brainer. 

Our mining costs are roughly equivalent to the transport costs of bringing rock to NZ from the other side of the world. Clearly we have a huge strategic advantage in market terms without even starting to consider the indirect environmental cost savings resulting from using Chatham rock phosphate.

Enquiries on any aspect of this release are welcome.

Regards,

 Chris Castle

CEO

Chatham Rock Phosphate Limited

chris@crpl.co.nz

Mobile: +64 21 558 185

 

Announcement: RAMPartners SA issue Chatham buy recommendation

Chatham Rock Phosphate Limited
Market announcement
16 June 2016


RAMPartners SA issue Chatham buy recommendation


Geneva based investment banking firm RAMPartners SA met with Chatham Rock Phosphate
earlier this year and received our investor presentation with obvious interest. Subsequently
they requested the opportunity to prepare an independent, investor focused, research
report.


This report has now been released and is available on our website as well as being filed on
NZX today. Alternatively, if requested I can email or post it to you.


The salient features of the report include:
1. A buy recommendation with a price target of NZ 50 cents compared with the
current market price of 0.7 cents, assuming a project valuation of NZD 472 million.
2. This independent valuation is based on a range of key assumptions by RAMPartners
relating to the market price of rock phosphate, Chatham’s production costs and
relevant currency interactions.
3. They include a detailed discussion of the forces affecting phosphate market prices
both now and in the future.
4. There is a detailed examination of the permit risk that Chatham still faces and the
evolving factors that are mitigating this risk
5. Finally, there is an intensive and potentially hard hitting evaluation of the calibre of
the Chatham project management team. Encouragingly we rate a very solid pass in
this respect – RAMPartners conclude that our management team “has the necessary
skills, ability, devotion, focus and skin in the game” to make our project work.


Obviously we are gratified that this independent report is so positive and confirms the
decision we made in February 2015 to continue notwithstanding the body blow we
sustained when the EPA unexpectedly withheld the Marine Consent.
The strong investor support we have received subsequently further tangibly evidences that
we made the correct decision.


Regards,
Chris Castle
CEO – Chatham Rock Phosphate Ltd
+64 (21) 558 185
chris@crpl.co.nz
Skype: phosphateking

Chatham Rock Phosphate concludes private placement fundraising programme

New Capital Allotted

Chatham Rock Phosphate Limited (NZX: CRP) has issued a further 9,215,386 ordinary shares in CRP (Shares) to qualified investors at an issue price of $0.006 per share, raising $55,292.32 (in aggregate) in new capital. 

The issue of the Shares is authorised under the pre break announcement dated 19 April 2016.  CRP has now issued $1,177,497.75 of new shares under the pre break announcement, which authorised the issue of up to $1,250,000 of new shares in CRP at $0.006 per share. 

This concludes CRP’s capital raising by private placement.  As previously advised to the market, CRP will now proceed to offer a share purchase plan to shareholders at $0.006 per share.  The record date for the share purchase plan will be 5pm this Friday. 

Full particulars of the share issues are set out below. 

For and on behalf of the Board,

Chris Castle

Managing Director