Key points
- Chatham Rock Phosphate entered a non-binding indicative term sheet with New Zealand-based Capital Trust Group Ltd.
- Capital Trust Group is a fintech firm specializing in ICO and asset-digitization services seeking to expand into mining and minerals.
- Under the term sheet, Chatham Rock Phosphate would acquire Capital Trust Group for shares equal to 40 per cent of its common stock, plus a three-year earnout for Capital Trust Group shareholders.
- The transaction is conditional on securing $10-million (U.S.) in financing, with $5-million (U.S.) earmarked to advance the Chatham Rise project toward a new marine consent application.
Chatham Rock Phosphate Ltd. has entered into a non-binding indicative term sheet with the New Zealand-based Capital Trust Group Ltd.
Capital Trust Group is a financial technology (fintech) company with particular expertise as a turnkey service provider for initial coin offerings (ICO) and asset digitization. Capital Trust Group is looking to expand these service offerings into the mining and minerals sector, and, in particular, identify, finance and develop mining projects using its blockchain-based technologies and extensive distribution networks.
Chatham Rock Phosphate, with its New Zealand Chatham Rise project and extensive knowledge of other international phosphate projects, provides an industry basis for this expansion of Capital Trust Group’s service offerings. The intention of the term sheet is to provide an in-principle agreement as to how Chatham Rock Phosphate and Capital Trust Group could merge if sufficient investor interest can be generated for a merger. It is intended that Chatham Rock Phosphate and Capital Trust Group will meet with investors to apprise them of this opportunity and seek indications of investment support at the end of this month.
If that financial support is forthcoming, Chatham Rock Phosphate and Capital Trust Group will then look to complete due diligence on each other and negotiate binding arrangements. The current term sheet envisages that Chatham Rock Phosphate would acquire Capital Trust Group for an issue of shares representing 40 per cent of Chatham Rock Phosphate’s common stock. In addition, Capital Trust Group shareholders would receive a three-year earnout on the basis of net revenues received under specified contracts that it currently has in place.
The transaction would proceed if $10-million (U.S.) in finance can be secured for the merged entity. If this finance is secured, $5-million (U.S.) would be dedicated toward advancing the Chatham Rise project toward a new marine consent application.
Chatham Rock Phosphate will keep the market informed as this proposal develops further. Shareholders are cautioned that no binding arrangements are currently entered and will only be entered if the matters above are addressed to the satisfaction of both Chatham Rock Phosphate and Capital Trust Group. Furthermore, any proposed agreement would be subject to regulatory approval where required.
