Update
March 2017
A new era for Chatham Rock Phosphate
I write this as I meet with existing and prospective shareholders on a visit
to investors in Europe.
Then I''m off to the PDAC (Prospectors and Developers Association of Canada)
convention, held in Toronto starting Sunday 5 March. (Our booth number if you
are passing is #2752.) Our attendance each March is a great opportunity to
talk to investors and others with an interest in our project. The timing is
perfect given we have just completed the friendly takeover of Antipodes Gold
to enable our listing on the Toronto venture exchange.
Welcome to Antipodes Shareholders
This letter is partly to provide Antipodes shareholders with some background
regarding the company they have now inherited. I am very pleased to welcome
about 1000 Antipodes shareholders to add to a similar number of CRP
shareholders, many of whom have shared our vision for more than a decade.
We are a company with significant forward momentum to become a key player in
the world market for low-cadmium reactive rock phosphate, basing this
initially on our unique phosphate deposit on the Chatham Rise. But more about
that later.
To all Antipodes shareholders: This update is one of a series we regularly
send out to our shareholders, usually by email in the interests of efficiency
and saving costs. This is being posted to you with a request for you to
provide your email address so I can communicate directly with you in that
manner.
Please send an email to me at chris@crpl.co.nz with subscribe in the title
and I will add you to our email list. Our newsletters come from me, as I
believe in communicating directly with our shareholders, and I encourage and
welcome feedback. You will not start receiving automated responses from our
website. With this note I also attach a fact sheet.
This fact sheet and our latest investor presentation can be found on our
website, www.rockphosphate.co.nz which I encourage you to visit. It will
provide you with a great overview of who we are. The direct links to these
documents are
http://www.rockphosphate.co.nz/s/CRP-Fact-Sheet-23-Feb-2017.pdf
http://www.rockphosphate.co.nz/s/CRP-Feb-26-2017-Presentation.pdf
CRP vision based on numbers and beliefs
CRP is a highly unusual mining company in that our mining project has a very
strong list of environmental benefits to add to an impressive array of
ethical, financial and economic pluses. The following market analysis adds
to our many other compelling reasons to invest.
Contract sale prices of 30% P205 (phosphate) ex Morocco are presently $US120,
significantly higher than the $US99 figure usually quoted by the World Bank.
?Once freight to Asia of $US30 is added, the landed cost is $US150. ?
If sold to make superphosphate in New Zealand, the value of CRP rock is
presently around $US110. However if sold as reactive phosphate rock (RPR) -
an organic product - the retail value in New Zealand is $US255. ?If sold
internationally as RPR the estimated price is about $US150 ($US40 over the
value of the rock based on phosphate content. This is because RPR is as
effective on pasture land as TSP (triple superphosphate) which costs up to
$US160 more that SSP (single superphosphate).?
Based on these market behaviours and the range of the other information we
continue to gather, we are convinced the demand for RPR will continue to grow
in parallel with the demand for organic products.
But wait there''s more! ?Chatham rock phosphate is ultra-low in heavy metal
cadmium (< 10 mg/Kg P2O5). This will be of huge additional value once the
European Union sets a 60mg/Kg P2O5 cadmium limit in 2019. We understand this
will eliminate all rock sourced from Egypt, Israel, Boucraa (Morocco),
Youssoufia, Senegal, Togo, Tunisia, Nauru & Christmas Island.
Analysts consider this will result in initial price premiums of $US30 - $50
for low-cadmium sources of rock phosphate. When the European Union cadmium
limit is further lowered to 20 mg/Kg P2O5 in 2030, it will eliminate other
sources and increase the premium further. The following shows the compelling
financial reasons why our product is so good.
In a nutshell
Based on this logic, we believe selling high quality RPR with ultra-low
cadmium will become a very profitable business and a major contributor to the
New Zealand economy as well as being ethically and environmentally on the
side of the angels.
The following graphic is a summary of our key benefits. You will see low
cadmium is mentioned as just one benefit. The premium being paid for RPR
(which we think can only increase) is one of the contributors to our very
strong forecast profitability
You can be our advocates whenever our project is raised in conversation. To
remind you why we continue to believe the Chatham Rise project remains hugely
important, here are the key reasons:
To recap on progress so far in 2017:
Operations: The CRP team has undertaken a major stock take of where the
Chatham Rise project is currently sitting and to plan next steps. An
independent environmental specialist provided a gap analysis of the project
in order to optimise our resubmission strategy. A resulting two-day
planning session identified a large number of actions. While the stock take
showed we''re in pretty good shape, there''s still a huge amount to do for a
second application. Once we''ve firmed up a couple of key issues, we''ll
provide an update on timeframes and the scope of the work required.
Watching TTR: We''ve been attending key parts of the Trans Tasman Resources
hearing in Wellington to help inform our strategy. TTR is reapplying for a
marine consent to mine iron sands off the Taranaki coast. Its hearing started
on 16 February and is currently scheduled to finish on 20 March, with a
decision due after a further 20 working days. The Environmental Protection
Authority, which is running the application process, is regularly updating
its website regarding the application. Check out:
http://www.epa.govt.nz/EEZ/whats-going-on/current-applications/ttr-2016/Pages
/default.aspx
Dutch Government research grant: CRP and its Dutch technical partners
Boskalis and Deltares have received Dutch government research funding to
improve the environmental management of marine mining. The increased global
interest in marine mining has highlighted the need to develop tools ways to
predict, adaptively manage and reduce the environmental effects of marine
mining. The research will investigate the behaviour of re-deposited material
using state of the art laboratory analyses and computer modelling to assess
the plume dispersion and the continuous process of settling, deposition and
bed formation of sand and silt. The results will reduce uncertainties
regarding predicting re-suspension and dispersion of the material being
returned to the seabed. The Dutch Ministry for Economic Affairs stimulates
public-private partnerships between research organisations and companies by
awarding funds to reviewed high quality research proposals. The results are
being developed using the vast amount of data already available for the
Chatham Rise marine mining project, but will have direct relevance to all
projects in the offshore mining and dredging industry.
Looking ahead
Over the coming months I look forward to meeting some of our new
shareholders. Our annual meeting is an opportunity to get together and we
normally hold that meeting in Wellington in late July. We will provide you
with some pre-warning so you might be able to combine a trip there with
meeting other shareholders.
In the meantime, if you have any questions, please email or call me.
Regards
Chris Castle, Managing Director
chris@crpl.co.nz or +64 21 55 81 85
skype: phosphateking
End CA:00297456 For:CRP Type:S/HOLDER Time:2017-02-27 10:19:41