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De-Risking Milestone For Chatham Rock Phosphate

ByEdison
Published 12/11/2013, 07:18 AM
Updated 07/09/2023, 06:31 AM
FTNMX551030
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Mining permit granted
The New Zealand government authorities have notified of their award of a 20-year mining permit to Chatham Rock Phosphate (CRP.NZ). This resolves an aspect of what had been increasing investor uncertainty over the past few months. Assuming it can now raise the further capital it needs to fund remaining pre-development costs, CRP will be able to apply for marine consents early in 2014.
Chatham Rock Phosphate
CRP has received confirmation from New Zealand authorities that it has been awarded a 20-year mining permit over a 820km2 area of the Chatham Rise. Permit conditions require CRP to lodge detailed engineering and feasibility studies sufficient to support a final investment decision (FID) within two years. Assuming that stage is reached, the mining permit requires minimum production of 800ktpa. Each of these conditions is well within CRP’s own timelines and targets (it is targeting FID by the end of CY14 to an initial mine plan of 1.5Mtpa).

The award of the mining permit in our view serves as a significant de-risking milestone. We would have expected a greater than 14% share price response, although investors are likely awaiting further progress before attributing more value. The next milestone will be for CRP to secure the capital needed to fund its application for environmental marine consents, likely to cost c $3.0m. With a mining permit secured, that should now become an easier proposition. An application is likely to be lodged in the New Year.

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