Key points
- The placement offers up to 6.25 million shares at eight cents per share (9.5 New Zealand cents or 8.6 Australian cents).
- Gross proceeds could reach $500,000, or $593,750 New Zealand or $537,500 Australian.
- The Korella North rock phosphate mine received its mining permit on Sept. 28, with production anticipated in Q4 2024.
- Shares are subject to a hold period of four months plus one day, and the placement is expected to close on or before Oct. 31, 2024.
Chatham Rock Phosphate Ltd. is proceeding with a non-brokered private placement of up to 6.25 million shares at a price of eight cents per share (9.5 New Zealand cents or 8.6 Australian cents) for gross proceeds of up to $500,000 ($593,750 (New Zealand) or $537,500 (Australian)).
Korella North granted mining permit
As you will be aware the company achieved a very significant milestone on Sept. 28 with the granting of a mining permit for the company’s Korella North rock phosphate mine.
Due to the accessibility of the phosphate rock deposit (effectively at surface) and the resulting simplicity of the mining method, small-scale production from the mine can commence almost immediately.
The phosphate produced by the Korella North mine will initially be sold into the domestic farm market with particular focus in supplying the phosphorus needs of cotton and cropping farmers in the north. After sorting, the highest-grade rock is expected to be exported for battery manufacture.
The company expects positive operating cash flows from the mine in the very near future but before then will be incurring set up costs and hence still have a requirement to raise further working capital.
Disposition of funds
The private placement funds raised will be used for the following purposes:
The working capital required to continue the fast tracking the development of the Korella North mine, the latter presently anticipated to be in production in Q4 2024;
Completion of the permitting process for the Avenir Makatea onshore phosphate project in French Polynesia with expected operating cash flows in 2027;
General working capital.
- The working capital required to continue the fast tracking the development of the Korella North mine, the latter presently anticipated to be in production in Q4 2024;
- Completion of the permitting process for the Avenir Makatea onshore phosphate project in French Polynesia with expected operating cash flows in 2027;
- General working capital.
It is anticipated that operating cash flows from the Korella North mine will, during 2024 and 2025, provide working capital while also financing the development of our Korella South mine and the reapplication for a marine consent (environmental permit) for the company’s Chatham Rise project.
Terms of the issue
The common shares issued pursuant to this proposed offering are subject to a hold period of four months plus one day after the closing date of the private placement as provided by securities legislation.
Finders’ fees may be payable in cash to arm’s-length parties in connection with the private placement as permitted under the policies of the TSX Venture Exchange. The private placement is subject to the acceptance by the TSX Venture Exchange and is expected to close on or before Oct. 31, 2024. Eligible investors are encouraged to contact me directly immediately if they wish to participate.
