Chatham Rock Phosphate Ltd. has provided shareholders and stakeholders with another of its regularly quarterly updates.
First, the company can confirm that the COVID-19 pandemic has not adversely affected either Chatham Rock Phosphate’s operations, or any of the team.
Further, there have been a number of recent developments, including financing success, strategic partnerships in Canada and a helpful change in the permitting groundswell in New Zealand. It also appears some fertilizer prices are trending up.
Chatham is also looking actively at other phosphate assets with a view to widening its portfolio and lessening the importance of the perceived binary permitting risk associated with the Chatham Rise project. The company still has five prospecting licence applications over marine phosphate rich deposits offshore Namibia.
It is also timely to confirm the management team, board and advisory panel remain in place and collectively encompass hundreds of years of expertise and experience relevant to marine mineral exploration, mining and capital markets. Unsurprisingly, this valuable intangible asset is attracting attention from other marine mining project developers.
Financing success
Earlier this month, the company closed a successful private placement, which will continue to keep the company in good standing as it pursues its strategic objective of securing a new cornerstone investor to finance its environmental permit reapplication, which continues to move forward.
Based on the success of that financing and the partnership agreement it now has with Stockhouse, the company immediately announced it was proceeding with a further non-brokered private placement of up to $1-million in up to 12.5 million units at a price of eight cents per unit (10 N.Z. cents).
The company expects the global reach that Stockhouse has can materially assist Chatham Rock in reaching its target.
Strategic partnerships
Both Stockhouse and another company, Venture Ad Network, have recently invested in Chatham Rock and are both now substantial shareholders (under 10 per cent). The decision of these Canada-based powerhouses to invest in the company is both encouraging and consistent with their decisions to promote and raise the Chatham Rock profile in the global marketplace. The outcome of working with these two companies will be a significantly enhanced on-line presence and investor awareness of the company’s rock phosphate project.
The company also joined up with New Zealand-based Reap, and investor information is now available on the Reap mobile app.
Chatham is at the forefront of this new communications technology and joins leading New Zealand Exchange (NZX)-listed companies, including major telecom company Spark and NZX itself.
The company recommends you download the free Reap app now to stay up to date with its latest developments. A link to the app is also on the home page of the Chatham website.
Changes in environmental permitting in New Zealand
In response to the devastating impacts of the COVID-19 closedown on the New Zealand economy, the government has announced it will introduce legislation designed to enable fast-tracking of the environmental permitting process. This is aimed at onshore strategic infrastructure and other projects of national significance, many of which are currently constrained by a cumbersome consultation process and by varying interpretations of the New Zealand Resource Management Act.
The company strongly supports this initiative, and it has written to the key government ministers (including the Prime Minister of New Zealand) requesting that the concept be extended to strategic offshore projects in the New Zealand exclusive economic zone.
Rare earths
It has been known for a decade that the sea floor muds in the company’s permit area include rare earths and other valuable minerals or elements. Subsequently, the company established that the phosphate nodules (which will be recovered using its existing engineering designs) also contain rare earths and other valuable minerals.
These include 15 of the 17 recognized rare earths, as well as other valuable minerals, including nickel, cobalt, chromium, vanadium, zirconium, elemental fluorine and strontium.
The issue the company faces is to establish the technical and economic feasibility of extracting these valuable substances. Before that, the company needs to better understand how they are chemically and physically bound together in both the sea floor muds and in the company’s phosphate nodules. The company is currently working with a New Zealand university to scope that work before applying for a grant from the New Zealand government to finance the project.
The way forward
The company’s key objective is to create value for shareholders. While prioritizing and pursuing the grant of an environmental permit, the company is seeking to acquire and advance other projects to create shareholder value.
With respect to the Chatham Rise phosphate project, the company is very confident the outcome of a second application with the New Zealand Environmental Protection Authority for a marine consent will be successful because many positive changes have occurred since February, 2015. For example: Evolving farming-related environmental standards, more rigorous health and safety standards, and phosphate ethical supply issues tilt the playing field in the company’s favour.
Chatham is benefiting from evolving social standards and views concerning a range of environment and health issues. It is clear that the greater likelihood of the company’s gaining a social licence or community approval to operate will improve the company’s chances of being granted the marine consent.
Upon the grant of the marine consent, Chatham will be a fully permitted guardian of a substantial source of low-cadmium, reactive phosphate rock, relatively close to all the key Asian markets. When successful with the marine consent, given the strategic nature of the resource and the nil development costs required, the intrinsic value of the company is expected to be significantly higher than at present.
