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- Release Date: 27/08/13 12:36
- Summary: GENERAL: CRP: Edison maintains CRP valuation above $2
- Price Sensitive: No
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CRP
27/08/2013 10:36
GENERAL
REL: 1036 HRS Chatham Rock Phosphate Limited
GENERAL: CRP: Edison maintains CRP valuation above $2
Media Release
Edison maintains unrisked valuation above $2, assesses fundraising efforts
27 August 2013
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-rleated 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 milllion followed by a further 5 million shares at 35c to close two
weeks after the grant of a mining licence to raise a further $1.75million.
The new shares will have a 2-for-1 70c option exerciseable 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/investor
For further information please contact Chris Castle on 021 55 81 85
End CA:00240232 For:CRP Type:GENERAL Time:2013-08-27 10:36:23
