Sea miner seeks more capital

Last updated 05:00 18/01/2014

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Wellington-based Chatham Rock Phosphate (CRP) is on the hunt for $6 million in new capital to fund its marine consent application to mine the sea floor.

In December, the Ministry of Business, Innovation and Employment granted the company a 20 year mining permit to vacuum the sea floor for phosphate nodules from an 820 square kilometre area of the Chatham Rise.

The phosphate is used in fertiliser.

The area is home to New Zealand's only known juvenile hoki nursery ground.

CRP is now seeking up to $6m to help fund its marine permit application which must be obtained from the Environment Protection Authority before it can start operations.

CRP is a client of Edison Investment Research, which said in an outlook paper published on the NZX that "the next two major items on CRP's to-do list are funding and environmental consents.

"The two are closely linked, such that a further $6m is required for CRP to fund its marine consent application and 2014 work programme.

"If it can secure most of that capital, an application will be ready to be lodged with the Environmental Protection Authority in Q1 CY14 [the first quarter of this year]."

In December, CRP's managing director Chris Castle was in the United States visiting potential investors.

The paper said CRP, which currently holds $700,000 of net cash, had engaged a "specialist UK-based advisory house to lead an institutional placement during February 2014."

Finance modelling shows that should CRP be awarded a marine consent, then it could enter next year with $20m cash on hand, enough to fund the company' s initial production phase in 2016.

The modelling includes a 2-for-1 share offer for existing shareholders which alone could raise $11m. There may also be a new $9m share option. 

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- The Dominion Post

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