Chatham Rock Phosphate says market re-rating stock on value of prospects
Sept. 2 (BusinessDesk) – Chatham Rock Phosphate Ltd., which has a prospecting permit to assess the potential for mining rock phosphate from the sea floor, says a doubling in its stock price over two weeks is likely to be investors recognising the potential of the venture.
Takaka-based CRP’s shares soared to as high as 33 cents on the NZAX alternative market today from 13 cents on Aug. 19. They recently traded down 6.3% at 30 cents, valuing the company at $15.2 million.
The share surge prompted the NZX to ask the company yesterday if it was still in compliance with disclosure rules or had market sensitive information that could account for the gains.
“We suggest that the recent increases in the CRP share price may simply reflect the market finally recognising the potential value of CRP,” managing director Chris Castle said in his response. “The rationale behind the potential value is a matter that CRP has repeatedly and thoroughly disclosed to the market for a significant period of time now.”
CRP, or Widespread Energy as it was then known, was granted a prospecting permit on the Chatham Rise last year to test whether the area contains an estimated 100 million tonnes of rock phosphate, which could be worth $28 billion. A successful mining operation could slash New Zealand’s costs for imported fertiliser.
The estimate comes from 30-year-old data derived from exploration work carried out by the government and companies such as Fletcher Challenge in the 1970s and 1980s.
CRP plans to raise capital and list on the Toronto Stock Exchange, which already has 19 listed fertiliser companies. It has had the project valued at $34 million, rising to $400 million if successfully executed.