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Chatham Rock Phosphate delays IPO, first half loss widens

Friday 25th November 2011

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Chatham Rock Phosphate, which is developing a project to mine phosphate from the sea floor for use as a fertiliser, has announced it will delay its proposed $40 million initial public offering till next year, sighting uncertain market conditions.

The Takaka-based company is looking to private investors to raise new capital in the interim, and posted an unaudited net loss after tax of $248,000 in the six months ended Sept. 30, up from $185,000 on the same period last year as it continues to spend development funds ahead of likely revenue.

“The purpose of the IPO is to fully fund CRP through to a mining license grant and commencement of production. Although it remains a priority to secure full funding for the project we consider it in the best interests of our shareholders to delay seeking full funding for now,” said chairman Keith Hindle.

CRP is known to have been considering listing on the Toronto Stock Exchange, which already has 19 listed fertiliser companies. It has had the project valued at $34 million, rising to $400 million if successfully executed.

Hindle said developments include operational matters, financing, and proposed overseas listing, with market developments in Australia and South-East Asia.

In September CRP’s shares soared to as high as 33 cents on the NZAX alternative market up from 13 cents on Aug. 19, promoting the NZX to ask the company if it was still in compliance with disclosure rules or had market sensitive information that could account for the gains.

CRP, or Widespread Energy as it was previously known, was granted a prospecting permit on the Chatham Rise last year to test whether the area contains an estimated 100 million tonnes of rock phosphate, which could be worth $28 billion.

A successful mining operation could slash New Zealand’s costs for imported fertiliser.

The estimate comes from 30-year-old data derived from exploration work carried out by the government and companies such as Fletcher Challenge in the 1970s and 1980s.

CRP shares last traded at $0.20 on Nov. 16.

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