Seabed explorer Chatham Rock Phosphate, now entering the second half of its four-year prospecting licence, plans to spend $US2 million ($NZ2.47 million) on its next round of exploration, data acquisition and planning.
The company is seeking subscriptions in a recently extended share purchase plan, which closes on Friday next week, from its 255 shareholders, which at up to $15,000 a shareholder may glean several hundred thousand dollars; all part of a total $US5 million being sought including separate, offshore, private placements.
Chatham has also "reactivated" planning for its delayed initial public offering; possibly on the mining-friendly Toronto stock exchange.
Managing director Chris Castle yesterday said Chatham Rock had funding in hand to continue its work programme, with a working budget of $US8 million for calendar 2012.
He expected the share purchase plan to raise "several hundred thousand" dollars by the time it closed next week and the company was in talks with several overseas parties on raising most of the $US5 million being sought.
Shares in Chatham Rock, listed on the NZX alternative market, hit a high of 32c last September then declined to 17c during December and earlier this month, before retracing to 22c yesterday.
Chatham's four-year prospecting licence was granted in February 2010 for two two-year terms, and the company was now aiming to apply for a mining licence "well before the end of the second term", Mr Castle said.
"We've achieved a huge amount over the past two years and we want to keep up the momentum so we can progress towards a mining licence as soon as possible," Mr Castle said.
Chatham Rock's permit covers 4726sq km over the central Chatham Rise, 450km east of Christchurch, and it intends to extract shallow seabed deposits of rock phosphate; in a depth range of 375m-425m.
Mr Castle said the permit covered 1% of the crest of the Chatham Rise, while targeting about 10% of the total 4726sq km permit held, with estimates 20sq km of phosphate could be extracted annually.
The next work programme would be financed from capital raised on New Zealand and international financial markets, including the share purchase plan, he said.
"In addition, the company has reactivated planning towards its initial public offering on an overseas stock exchange to raise enough capital to fund the company through the mining system design, engineering development and mine planning and development stages," Mr Castle said.
A broking agreement was in place, due diligence was completed and a prospectus written, but events in Europe and general market conditions had delayed the launch.
"It [IPO] is on the slipway and ready to be launched at any time; but it's dependent on market conditions," Mr Castle said.
Chatham Rock will spend at least $US2 million during the next two years, including on bathymetric mapping and data analysis, development of a digital terrain model for mine planning, sample collection and analysis for exploration, and testing by fertiliser companies. It would also start mine feasibility studies and conceptual mine planning.
The economic benefits include the import substitution of up to $300 million annually; instead of north African and Middle East imports, the potential to export phosphate and reduce commodity and foreign exchange risks for fertiliser manufacturers and farmers, he said.
In December, scientific data was gathered by scientists aboard Odyssey Marine's vessel Dorado Discovery during an 11-day, $US1.2 million voyage to the Chatham Rise to do geological and environmental survey work.
