Subsea backs NZ mining project
Subsea Investments II, a private equity fund backed by US-based LPs, will invest up to $7 million for shares issued by NZAX-listed Chatham Rock Phosphate (CRP).
CRP plans to use part of the capital to start commercial mining of a large phosphate deposit on the Chatham Rise in 2014. It will use the deposit as fertilizer on farms in New Zealand and for export to Australia and Southeast Asia. The rest of the funding will provide half of the necessary capital for CRP's work program this year, including two cruises for geotechnical sampling and environmental data gathering.
It could eventually sell up to 19.99% of its share capital to Subsea, which is run by John C. Morris, who is also chairman and CEO of undersea mineral explorer Neptune Minerals.
CRP issued around 11.4 million shares at NZ$0.20 each for $2.28 million. Subsea also received the same number of unlisted options, which have a three-year term and can be exercised for shares at NZ$0.30 each.
According to Managing Director Chris Castle, Subsea acquired its stake for a tiny proportion of what it will be worth once CRP is in full-scale production in 2014.
The new share issue is subject to approval from CRP's shareholders.
As part of a convertible loan arrangement, Subsea could exercise the right to more of CRP's shares in exchange for an additional $9 million of capital.
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