The lacklustre result raises questions about the roll-out of its development towards using a suction dredge to bring 1.5 million tonnes annually of phosphate from the seabed of the Chatham Rise for domestic use and export.
Chatham was offering up to 29.5 million shares at 35c each to raise up to $10 million, with no minimum subscription level; plus a one-in-three share option at 70c per share after marine consent was granted.
Chatham chief executive Chris Castle yesterday said it was ''disappointing'' not to reach the minimum $4 million target, but the offer achieved a good result, given it was non-brokered.
Chatham has now raised a total of $23.5 million, having spent the bulk of it on research and development to date, of an estimated $30 million required before production is expected to start in 2015.
Craigs Investment Partners broker Chris Timms said the result would be disappointing to Chatham, adding the $1.5 million raised reflected investors' present aversion to ''risk appetite''.
''The $4 million probably could have underpinned work for quite some time into the future. This will likely curtail, or at least limit, its ability to keep to its [forecast] time frame,'' Mr Timms said.
Shares in Chatham were unchanged at 36c following the announcement yesterday.
While Chatham is targeting its phosphate to supply New Zealand, and potentially more for exporting, industrial mineral and precious metal extraction around the world is largely in a slump, making investors risk averse.
China's demand is downbeat and global spot prices are slashing producer profit margins, making investors jittery.
During the capital-raising, Mr Castle said Chatham's ''forward budget'' included $3.2 million for mining licence and marine consent, corporate costs of $3 million over two years, contingency and future developments offshore of $2.7 million and $1.1 million for other projects.
Yesterday, Mr Castle said the $1.58 million raised would allow Chatham to work towards ''achieving further milestones and de-risking'' the project during the months ahead, ''which would enable capital in future to be raised at higher prices''.
Mr Castle said he was continuing discussions with institutional and professional investors, locally and overseas, who had expressed interest in Chatham.
''With an existing market capitalisation of $50.4 million we expect to be able to progressively raise the last $6.5 million as we require it,'' Mr Castle said.
Although Chatham has explored and proven the seabed phosphate resource, once consents and permits were gained its intention was to leave the actual mining up to its cornerstone shareholder Boskalis and focus on being an agri-business commodity trader.
On the mining licence application, Mr Castle said processes under new legislation were ''more complex than anticipated'', but otherwise remained a ''priority'' for Government permitting agency New Zealand Petroleum and Minerals.
Chatham is more than halfway through its four-year offshore prospecting permit, covering 4726sq km over the central Chatham Rise, 450km east of Christchurch.
The exploration permit covers 1% of the Chatham Rise crest, at depths up to 425m, while targeting about 10% of the total 4726sq km permit held.
