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Chatham Rock Phosphate changes closing date

Monday 9th January 2012

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Chatham Rock Phosphate, which delayed plans for a $40 million overseas share sale because of turbulent financial markets, has extended the closing date to tap shareholders for funds.

The share purchase plan to raise between $2 million and $5 million of fresh capital will close on Feb. 3, the Takaka-based company said in a statement. The company’s 255 investors can buy shares at 20 cents apiece, a 15 percent premium to the 17 cents they last traded at on the NZAX on Dec. 19, and a 26 percent discount to the volume weighted average price of the stock in the three calendar months prior to the announcement.

“A subscription from each (shareholder) would enable the company to retain some momentum while the process to raise money by means of private placements continues,” Chatham Rock said. “As we are proposing to reactivate the overseas IPO (initial public offering) as soon as market conditions improve, this may present an attractive second opportunity to qualified investors.”

In November, the company put plans for a float in either Canada or Australia on hold because of the “continuing adverse market conditions and the forthcoming year-end holidays.” Funds raised from the IPO would pay for a mining license grant and feasibility work for dredging phosphate from the sea floor on the Chatham Rise for use as fertiliser. The project was valued at $34 million, or 70.6 cents per share, by two independent valuers in March last year.

It decided to proceed with the share purchase plan to meet any funding shortfall from the postponed float.

Last month, Chatham Rock signed a US$1.2 million deal with NASDAQ-listed deep ocean expert Odyssey Marine Exploration for a seismic survey-style evaluation of the target area. As part of the deal, Odyssey can be paid in Chatham Rise shares at 20 cents each.

BusinessDesk.co.nz

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