CRP gives further guidance on future strategy

CRP gives further guidance on future strategy

Chatham Rock Phosphate (NZX:CRP) has continued to develop its future plans following the refusal of its Marine Consent application.

As previously announced, CRP has no intention of abandoning its Chatham Rise phosphate project and is continuing to develop strategies for progressing the project. Of critical importance to this is preserving its experienced and highly specialised executive team and maintaining the support of its key partners. CRP is pleased to advise of strong progress on both counts.

It is increasingly likely that CRP will pursue a re-submission of its Marine Consent application. However before it makes a final decision to do so CRP intends to continue to work with the Environmental Protection Authority to seek clarity on the interpretation of the EEZ legislation and the EPA’s policies and procedures for managing the consent process. CRP is also contributing where possible to the discussions about changes to the EEZ legislation and will incorporate any changes in our plans.

It is encouraging that the Government is investigating changes given the procedural and legal concerns with the process that CRP has previously detailed.

Executive Team

The core executive team at CRP consists of:
· Chris Castle – CEO

· Robin Falconer – Principal Scientist

· Ray Wood – Chief Operating Officer

· Linda Sanders – Corporate and Affairs and Stakeholder Communications.

· Najib Moutia – Vice President – Sales and marketing

This team is supported by non-executive directors Robert Goodden and Jill Hatchwell.

The Board and Executive team have each confirmed their commitment to supporting CRP and progressing the project over the next 12 months.

In so doing they have each agreed to significant reductions in remuneration to reduce overheads for CRP. They may each potentially receive remuneration at a later date through CRP shares (priced at VWAP) as compensation. However any such issue of shares would be subject to shareholder approval at a later time.

Capital Requirements

Considerable work is going into reducing overheads in CRP, working through cash requirements for the next 12 months and settling final costs associated with the Marine Consent process. The purpose of this work has been to develop a 12 month budget for keeping the project moving forward (including provision for a small amount of scientific and technical work), continuing work towards a re-submission of the Marine Consent application and increasing CRP’s focus on its Namibian permit applications. This capital requirement has been assessed at $1.25 million.

CRP intends to conduct either a rights issue or share purchase plan offer to shareholders in the near future as a first step towards funding this capital requirement. Given the prevailing market price of shares CRP is conscious that the offer will be highly dilutive and therefore will ensure shareholders have first priority to invest. Any shortfall from such offer will then look to be placed to non-retail investors.

Shareholders are encouraged to contact Chris Castle should they have views on how the capital raising should be conducted.

Business Strategy

CRP is also using the current time to assess its overall business strategy. One option is for CRP to increase its focus on its Namibia permit applications in the short term to help diversify CRP’s risk from primarily focusing on a single project.

Because of the significant expertise that CRP has developed through the Chatham Rise project, it is also being approached with new offshore mining opportunities and other onshore and offshore phosphate mining opportunities. CRP intends to continue to explore these opportunities and potentially further diversify its activities.

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