CRP
30/06/2015 13:15
GENERAL
NOT PRICE SENSITIVE
REL: 1315 HRS Chatham Rock Phosphate Limited
GENERAL: CRP: CRP seeks farmer capital to support local phosphate supply
30 June 2015
CRP seeks farmer capital to support local phosphate supply
Chatham Rock Phosphate is embarking on a new round of capital-raising among
the farming community to develop a local supply of phosphate. CRP is seeking
to raise $766,000.
"This is an opportunity to invest in a green local phosphate source,"
according to CRP managing director Chris Castle.
"CRP is now fund-raising as part of re-applying for an environmental consent.
Assuming we receive this consent, we will quickly move towards production."
Mr Castle noted CRP has a 20-year mining permit.
Following the latest capital-raising among existing shareholders, interests
associated with the directors and management are now CRP'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 part of
an independent local source of rock phosphate. CRP, a New Zealand public
company with 950 shareholders, proposes mining 30 km2 a year to extract 1.5
million tonnes of phosphate nodules for use in New Zealand and Asia Pacific.
The permit area on the Chatham Rise is about two-thirds of the way to the
Chatham Islands, at a depth of 400m.
"Assuming CRP is granted permission to extract phosphate from the Chatham
Rise, it will provide New Zealand's rural environment with an ethical local
source of phosphate with some strong environmental benefits - specifically
being low run-off, low cadmium and with a low carbon footprint."
"It would also offer a strategic security of supply, given virtually all
phosphate supplies come from politically unstable areas, mainly in North
Africa. CRP would be an ethical producer of farm inputs, and New Zealand
wouldn't be exporting our pollution."
Mr Castle criticised environmentalists for condoning New Zealand's
importation of all its phosphate requirements. "It is hypocritical to support
exporting our environmental footprint to countries that mine phosphate
on-land, involving severe social and environmental distress in those
communities."
A resubmission by CRP would stress the considerable environmental benefits of
the local resource:
o Chatham Rise phosphate when spread on pastures minimises waterways
pollution because unlike superphosphate it binds to the soil, so very little
leaches into streams and rivers.
o It requires less frequent application, as the fertility effect lasts
three years rather than one (also a financial benefit).
o This local product contains almost no cadmium, a heavy metal that
accumulates in the soil and can become a health hazard. The current Moroccan
product has among the world's highest concentrations. CRP's product has
moderate uranium content but is high in calcium, offering attractive liming
qualities.
o CRP's product has a much lower carbon footprint because as a local
source it doesn't need to be shipped from overseas, and is applied less
often.
On 23 October 2014 we made a detailed market announcement regarding our
anticipated project economics and cost structures, including detailing our
underlying assumptions.
This was updated in a further market announcement on 27 January 2015. Readers
are referred to both announcements for more detail and copies can be provided
on request. While the assumptions remain applicable (and critically the
assumption that we will obtain a marine consent) those economics are
significantly influenced by prevailing foreign exchange rates. In particular,
costs are largely expected to be incurred in Euros and income is largely
expected to be earned in US dollars.
Based on current exchange rates and the aforementioned assumptions, CRP's
annual profit before royalties and taxation would exceed $96 million. New
Zealand would benefit from CRP paying $34 million in annual taxes and
royalties, plus millions in port charges. Jobs - many high value and
knowledge-based - would be created in the port, on the mining ship,
undertaking environmental monitoring and broader scientific research, in the
agriculture and hospitality sectors and on the Chatham Islands.
The income earned by extracting phosphate would be $9,700,000 per km2 over
30km2 a year compared with only $9,000 per km2 annually from fish bottom
trawling which affects 50,000 km2 a year - but requires no environmental
approvals.
The Environmental Protection Authority concluded mining would have no
significant impact on fishing yields or fishing industry profitability,
marine mammals or seabirds.
Mr Castle said the CRP project could enable New Zealand to become a world
leader in marine technology and expertise worth billions of dollars.
"What is at stake for New Zealand is potentially a lot more than phosphate.
In addition to taxes and royalties from the CRP project our work at sea
enhances the understanding and knowledge base of our marine environment to
help identify marine areas most deserving of conservation."
Mr Castle said he is confident of a successful outcome for the environmental
permitting process next time, due to:
o An expected improvement in the Marine Consent procedure, including
interpretation of the EEZ Act
o CRP was turned down on limited and unexpected grounds that we
consider erroneous and can be dealt with more robustly on resubmission,
(high-profile fishing industry and Iwi concerns were mutually agreed to be
groundless)
o CRP is confident of much wider and tangibly expressed support from
relevant government agencies, the farming sector, and other stakeholders
o The company more fully understands the rules of the game and expects
the Environmental Protection Authority to have learned from the CRP and
earlier Trans Tasman Resources applications.
Chris Castle +64 21 55 81 85 or [email protected]
Warning - Forward Looking Statements
This release contains forward looking statements. Forward-looking statements
and information are not historical facts, are made as of the date of this
release, and include, but are not limited to, statements regarding
discussions of future plans, guidance, projections, objectives, estimates and
forecasts and statements as to CRP's expectations with respect to, among
other things, mineral properties and the matters described in this release.
These forward looking statements involve numerous risks and uncertainties and
actual results may vary. Important factors that may cause actual results to
vary include without limitation, the timing and receipt of certain approvals,
changes in commodity prices, changes in interest and currency exchange rates,
risks inherent in exploration results, timing and success, inaccurate
geological and metallurgical assumptions (including with respect to the size,
grade and recoverability of mineral reserves and resources), changes in
development or mining plans due to changes in logistical, technical or other
factors, unanticipated operational difficulties (including failure of plant,
equipment or processes to operate in accordance with specifications, cost
escalation, unavailability of materials, equipment and third party
contractors, delays in the receipt of government approvals, industrial
disturbances or other job action, and unanticipated events related to health,
safety and environmental matters), political risk, social unrest, and changes
in general economic conditions or conditions in the financial markets.
End CA:00266395 For:CRP Type:GENERAL Time:2015-06-30 13:15:03
