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Chatham Rock, hoping for EPA ruling before Christmas, widens first-half loss

Thursday 27th November 2014

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Chatham Rock Phosphate, the company proposing to mine phosphate nodules from the seabed on the Chatham Rise, reported a near-tripling of its first-half loss as it spent more on exploration, sought a listing on London’s AIM market and applied for a marine consent.

The loss widened to $1.87 million in the six months ended Sept. 30, from a loss of about $676,000 a year earlier, the Wellington-based company said in a statement. It had virtually no income to offset its $1.87 million of expenses for the period.

The company's plan to create the world's first such seafloor mining operation has been driven by managing director Chris Castle, who was drawn to the idea based on assessment of historical data showing phosphate on the Chatham Rise. Such a venture, if successful would supplant phosphate imported from North Africa, providing a considering economic benefit to New Zealand, he has argued. Shareholders have backed the plan, contributing more than $33 million to the venture over the past four years. The company's market capitalisation is about $28 million.

The Environmental Protection Authority's Decision-Making Committee considering the consent is coming to the end of its hearing process and Castle said the company is "still hoping for a pre-Christmas decision." Environmental groups and the fishing industry lined up in opposition to the plans to mine on the Chatham Rise, an important fishery.

"We are all pioneers in a new industry – and your project team’s focus is to ensure we will continue to be well prepared, well-resourced and expertly managed," the company said today.

Chatham Rock missed its target of an initial public offering on the AIM market and today said its prospects for a listing "were severely damaged by the negative decision regarding Trans Tasman Resources’ application for a marine consent" to mine ironsands.

"Ultimately made the decision our AIM IPO would not fly in 2014, though we remain determined to list our shares – given their unique appeal – on an international market in 2015," it said.

The company's statement of cash flows for the first half show exploration expenditure rose to $2.78 million from $1.77 million a year earlier. Cash paid to suppliers rose to $1.3 million from $817,133.

Proceeds from share issues was $4.2 million in the first half, up from $2.2 million.

Chatham Rock shares rose 12 percent to 14.5 cents and have fallen 56 percent this year.

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