Seabed mineral explorer Chatham Rock Phosphate has secured $7 million in capital through a share issue and loan from private United States equity fund, Subsea Investments II, which gets a 19.99% stake in the company.
Chatham is exploring the potential for extraction of shallow seabed deposits of rock phosphate, in depths up to 425m from the Chatham Rise, in what it believes could annually replace $300 million of imported phosphates.
While Chatham get about $7 million in new capital through the share issues and loan, Subsea holds up to 30 million share options which, if exercised, could generate a further $9 million in new capital.
Chatham managing director Chris Castle said in a statement yesterday Subsea's coming on board as a cornerstone investor was a "significant" step in securing the future of the rock phosphate project.
"This year's [exploration] work programme for Chatham is likely to cost $NZ8 million to $NZ10 million and we expect that this investment [by Subsea] will ultimately constitute over half of that funding requirement." Shares in Chatham, listed on the NZX alternative market, remained unchanged at 23c yesterday, having hit a post-float high of 32c last September.
In early January, Chatham reported that aside from seeking several hundred thousand dollars from its 255 shareholders, it was separately seeking up $US5 million ($NZ6.07 million) from offshore parties and private placements.
"We also now have a number of avenues to pursue to fund the balance of our work programme," Mr Castle said yesterday.
Chatham's four-year prospecting licence was granted in February 2010 for two terms of two years each. The company is aiming to apply for a mining licence before the end of the second term.
Sea trials of bulk sampling equipment have recently been held on the Chatham Rise by the company, following an 11-day scientific cruise in December.
An initial public offering is still delayed, and although Chatham has a broking agreement in place, due diligence completed and a prospectus written, events in Europe and general market conditions had forced its postponement.
Chatham will hold a special meeting in about three weeks for shareholders to vote on the Seabed proposal.
