New Zealand: CRP on Right Track

2013 is shaping up as a watershed year for Chatham Rock Phosphate, Edison Investment Research says in its latest update.

“CRP is moving closer to demonstrating a commercially and technically viable undersea mining project,“Edison says.

“Risks still remain but the most significant are easing,” according to analyst John Kidd in a fresh assessment released last week.

He notes that in the second half of 2012 CRP achieved two major milestones. In July global dredging major Royal Boskalis subscribed for a 20% shareholding in CRP, while in September CRP lodged a mining licence application. In December CRP announced it had reached agreement with Boskalis to complete detailed project design for mining operations.

“CRP is progressing the appraisal and potential development of a large permit area 450 km offshore from the east coast of New Zealand. The area has been known since the 1950s to contain large deposits of high grade rock phosphate on or near the seabed, 400 m below the surface. New Zealand is a significant consumer of rock phosphate as a feedstock for fertiliser manufacture, most of which is currently imported from Morocco.”

Edison has been employed by CRP to provide independent research in the absence of analysts preparing any on smaller NZX listed companies. Edison Investment Research is a leading international investment research company staffed by over 100 professionals. The team of 65+ analysts produce research on over 500 companies, making Edison one of the largest dedicated equity research teams worldwide. Edison’s research is read by institutional investors, alternative funds and wealth managers in more than 100 countries.

Wellington based Mr Kidd said in December “if and when CRP continues to pass further significant milestones over 2013-14, we expect the market to continue to de-risk CRP’s share price towards our un-risked valuation, currently at $1.87 a share.”

The share price is currently 36c, having reached a peak of 46c.

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Press Release, March 4, 2013