The Chatham Rock Phosphate company, which is proposing to mine seabed deposits of rock phosphate, is urgently seeking to raise cash from its 225 shareholders.
Chatham Rock chief executive Chris Castle said in a market update yesterday that the recent postponement of the overseas initial public offering meant Chatham Rock had "an immediate need to raise money".
"Private placement finance is being targeted but the summer holiday break has caused delays in finalising these arrangements," Mr Castle said.
Chatham Rock has 255 shareholders and a subscription from each - of between $500 and $15,000 - would allow the company to retain momentum while the process of raising money by private placements continued, and would also assist in the private placement negotiations, he said.
Subscriptions at the levels suggested by Mr Castle would raise the company $127,000 to $3.8 million.
Early last month, Chatham Rock said the intention of the capital seeking programme was to raise $2 million to $5 million, through a combination of a new share purchase plan offer and undertaking private placements. Its initial public offering was targeting the mining sector-friendly Toronto stock exchange.
Mr Castle said the company was proposing to "reactivate the overseas initial public offering as soon as market conditions improve".
He said in March last year Chatham Rock shares were valued by two independent valuers at 70.6c, or $34 million for the company, and it was "disappointing" the most recent share price was 20c, or $10 million for the company.
"While disappointing in one sense, this offers an opportunity to shareholders to increase their shareholding in the company at this attractive entry point."
Chatham Rock has a two-year offshore prospecting permit covering 4726sq km over the central Chatham rise, 450km east of Christchurch, with right of renewal for prospecting or to seek a mining permit.
Chatham Rock is looking to displace imported Moroccan phosphate, with estimates of $300 million annual revenue, and the possibility of exporting phosphate.
Last month a range of scientific data was gathered by scientists aboard Odyssey Marine's 100m vessel Dorado Discovery during an 11-day, $US1.2 million ($NZ1.53 million) voyageto the Chatham Rise to dogeological and environmental survey work.
The survey costs might yet see Odyssey Marine take an equity stake in Chatham Rock, Mr Castle said.
The seabed surveys included multi-beam sounders to map the seabed topography and another instrument package which contained a magnetometer, sediment sounder and side-scan sonar.
