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SP Angel – Friday 13 02.15

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Chatham Rock Phosphate (CRP NZ) – Luddites running DMP turn down approval

Chatham Rock Phosphate (CRP NZ) Price NZ$0.01, Mkt cap NZ$2.1m – Luddites running DMP turn down approval

• The Luddites, known for their distrust of progress and innovation, appear to have popped up in New Zealand and have turned down CRP's proposal to mine phosphate nodules off the sea floor of the Chatham Sound.
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• Reasons given were that the project was of little economic benefit and would cause long term damage to the environment. If the same Decision Making Panel ruled on trawling or rock climbing then these activities would surely also be banned.
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• We also don't think Royal Boskalis the Dutch dredging company think this is venture of little economic benefit and we reckon NZ farmers might like to buy a local product which can be put directly onto their fields without the addition of toxic contaminants.
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• CRP have spent some $33m investigating and evaluating the project with management forecasts indicating substantial economic benefit for investors and the government alike.
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• Forecast annual royalties of US$6.9mpa + income taxes of US$17.4mpa should give the NZ government total royalties of US$104m + income tax of US$262m over a 15 year period.
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• NZ must be a richer place than we thought for these sums to be of such little ‘little economic benefit’.
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• Local and International shareholders who may suffer a near total loss of their investment will surely avoid NZ like a plague ship for future investment.
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• In unrelated news we note that the wholesale price of milk paid to NZ farmers has fallen by around 50% over the last year threatening to further sour the NZ economy.

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