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- Release Date: 07/12/12 18:37
- Summary: GENERAL: CRP: CRP de-risks as progress continues says Edison
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CRP
07/12/2012 16:37
GENERAL
REL: 1637 HRS Chatham Rock Phosphate Limited
GENERAL: CRP: CRP de-risks as progress continues says Edison
7 December 2012
CRP de-risks as progress continues says Edison
Chatham Rock Phosphate's (CRP) share price will continue to de-risk as it
progresses its project to establish its undersea mining operation, Edison
Investment Research (Edison) says in its latest Asia-Pacific quarterly update
on the company.
"With a mining licence application having been lodged with authorities during
the last quarter, marine consents and project engineering will be CRP's key
area of focus over the coming year."
Edison has been engaged by CRP to provide independent research in the absence
of analysts preparing any on smaller NZX listed companies.
The Managing Director of CRP Chris Castle said the market took the initial
Edison research coverage, followed closely by CRP's licence application, very
positively with the CRP share price doubling to a peak of 46c in less than
two weeks.
Wellington based Edison analyst John Kidd said if and when CRP continues to
pass further significant milestones over 2013-14, we expect the market to
continue to de-risk CRP's share price towards our un-risked valuation,
currently at $1.87 a share."
Mr Kidd says CRP still faces a number of significant hurdles before it will
be in a position to consider a final investment decision. In addition to
project engineering, CRP's biggest challenge lies in securing marine consents
for its operation.
"While a new regulatory regime to deal with far-shore marine operations
provides much-needed clarity, the risk of delay, deferral and even denial
still remains."
He says a notable feature of the business model is the lack of capital
intensity through the planned use of contract mining.
"Most of the capital required will come from global dredging major Royal
Boskalis, with which CRP has a close relationship." He believes the 20%
stake Boskalis has taken in CRP following a two-year advisory period
significantly de-risks the project.
Mr Castle said the current capital raising is expected to be the final
tranche before a final investment decision is made.
"CRP has achieved considerable past success in tapping the private placement
market and it is likely this will again be targeted. A capital raising is
also a necessary prerequisite to completing a TSX-V listing which CRP is
aiming to do during the first half of 2013."
Chris Castle - +64 21 55 81 85 or [email protected]
End CA:00230873 For:CRP Type:GENERAL Time:2012-12-07 16:37:39
