Chatham Rock Phosphate Is Well and Truly Back on the Road

Chatham Rock Phosphate Ltd. has provided a further shareholder briefing. A lot has happened since the company’s last update was published, and it is timely to provide another informal update on recent events.

Events of note include:

Sensible and helpful revisions to the 2013 EEZ Act became law on June 1, 2017. The changes are mainly process related and should help improve the calibre of future decision making by the Environmental Protection Authority’s new boards of inquiry.The groundbreaking Trans Tasman Resources decision was released on Aug. 10, and the company now holds a granted marine consent. While notice of an appeal has been lodged by some lobby groups, the decision stands. The company remains confident the decision is robust and has carefully anticipated all of the likely areas of challenge.

CRP presentations to Canadian investors and share brokers in May and July received a warm welcome in Vancouver and Toronto, and the company has been invited to return.Two shipments of rock phosphate from Morocco (but mined in the Western Sahara) were seized in foreign ports highlighting the company’s often-expressed concerns about the security of supply of rock phosphate destined for New Zealand. The first shipment (destined for New Zealand) remains detained in South Africa, and the Moroccan exporters have now withdrawn from the related court action, leaving its ownership uncertain.The continuing debate about water quality, fertilizer runoff and water royalties continued to highlight the benefits Chatham Rock Phosphate can bring to waterways.Work continues in the Netherlands on plume-related research studies co-financed by Chatham, the company’s business partners and by the Dutch government.

• Sensible and helpful revisions to the 2013 EEZ Act became law on June 1, 2017. The changes are mainly process related and should help improve the calibre of future decision making by the Environmental Protection Authority’s new boards of inquiry.
• The groundbreaking Trans Tasman Resources decision was released on Aug. 10, and the company now holds a granted marine consent. While notice of an appeal has been lodged by some lobby groups, the decision stands. The company remains confident the decision is robust and has carefully anticipated all of the likely areas of challenge.
• CRP presentations to Canadian investors and share brokers in May and July received a warm welcome in Vancouver and Toronto, and the company has been invited to return.
• Two shipments of rock phosphate from Morocco (but mined in the Western Sahara) were seized in foreign ports highlighting the company’s often-expressed concerns about the security of supply of rock phosphate destined for New Zealand. The first shipment (destined for New Zealand) remains detained in South Africa, and the Moroccan exporters have now withdrawn from the related court action, leaving its ownership uncertain.
• The continuing debate about water quality, fertilizer runoff and water royalties continued to highlight the benefits Chatham Rock Phosphate can bring to waterways.
• Work continues in the Netherlands on plume-related research studies co-financed by Chatham, the company’s business partners and by the Dutch government.

What is coming up?

Chatham is about to launch various fundraising initiatives, including the likelihood of an offer to its existing approximately 1,500 shareholders. This will enable the company’s legions of mom-and-pop investors to participate once again and will be the eighth such issue offered to the company’s loyal supporters since 2010. Other financing will be sought, probably by means of private placements, in Asia, Europe and Canada.

The company will once again be presenting (this time two papers) at the Mecca of the marine mining world, the annual Underwater Mining Conference being held this year in Berlin. The company’s presence there will dovetail nicely into local fundraising-related activities and a media campaign including Swiss-ased TV coverage.

While talking about media, Chatham will be a key topic of a coming article in Resource World, a Vancouver-based publication that is widely distributed in international mining and investment circles.

Operationally, this month, the company kicks off the marine consent reapplication process with the momentum expected to build over the next 15 months. All going well, the company is targeting a reapplication date in late 2018.

There is also likely to be an increasing focus on securing marine phosphate opportunities offshore, to an extent depending on evolving permitting regimes in the company’s targeted region. As the company has indicated previously, it is also interested in onshore deposits with a preference for reactive-phosphate-rock-style mineralization. Both of these initiatives are likely to involve low upfront costs even if they do proceed and will not divert financing from the company’s principal objective — that of gaining the marine consent on the company’s second try.

In parallel with those activities, Chatham has commissioned research aimed at separating valuable byproducts that are also contained within the sandy sea floor matrix that contains the rock phosphate deposit. As the company’s recovery process is already bringing these sands up to the vessel, there is no mining cost involved, merely the costs of separating these byproducts from the sand before it is returned to the sea floor. Successful recovery of even a tiny proportion of these byproducts could add significantly to the company’s future revenue and profitability. Chatham is seeking independent financing to assist with this research.

A reminder about the company’s environmental and other benefits

You can be the company’s advocates whenever the project is raised in conversation. To remind you why the Chatham Rise project remains hugely important for New Zealand, here are the key reasons:

The company’s rock is a proven reactive phosphate rock. Using it results in much less runoff into waterways and an improved soil profile compared with the effects of manufactured fertilizers. As such it is an organic fertilizer. It also contains ultralow levels of cadmium, a cancer-causing heavy metal with much greater concentrations in other rock phosphate deposits. Being locally sourced and needing to be applied less frequently result in much lower carbon emissions. The environmental footprint of seabed extraction is demonstrably smaller than the impact of onshore phosphate on local communities overseas. The rock is within one day’s sailing distance, and supply is far more secure than phosphate rock coming from unstable regions on the other side of the world.The project economics are attractive, and Chatham will pay significant royalties and income taxes. The project will generate new jobs in environmental monitoring, on the mining ship, in the home port, and in the science and agricultural sectors

• The company’s rock is a proven reactive phosphate rock. Using it results in much less runoff into waterways and an improved soil profile compared with the effects of manufactured fertilizers.
• As such it is an organic fertilizer.
• It also contains ultralow levels of cadmium, a cancer-causing heavy metal with much greater concentrations in other rock phosphate deposits.
• Being locally sourced and needing to be applied less frequently result in much lower carbon emissions.
• The environmental footprint of seabed extraction is demonstrably smaller than the impact of onshore phosphate on local communities overseas.
• The rock is within one day’s sailing distance, and supply is far more secure than phosphate rock coming from unstable regions on the other side of the world.
• The project economics are attractive, and Chatham will pay significant royalties and income taxes.
• The project will generate new jobs in environmental monitoring, on the mining ship, in the home port, and in the science and agricultural sectors