Chatham provides briefing to incoming Minister of Oceans

NEWS RELEASE 20 -11 November 12, 2020



CHATHAM ROCK PHOSPHATE PROVIDES BRIEFING
NOTES TO KEY INCOMING GOVERNMENT MINISTER

WELLINGTON New Zealand – Chatham Rock Phosphate Limited (TSXV: “NZP” and
NZAX: “CRP” or the “Company") is pleased to announce that it recently provided
briefing notes to a key incoming Minister following the recent General Election in New
Zealand which returned the Labour Party with a clear majority government for the first
time in recent parliamentary history.

This key incoming Minister, Hon David Parker, takes up a new role as Minister for
Oceans and Fisheries, in addition to his existing roles as Minister for the Environment,
Attorney-General, Minister of Revenue and Associate Minister of Finance.

Chatham has previously briefed Minister Parker about our project and we have
requested an opportunity to repeat this, given the particular relevance of this new
Ministerial portfolio to our project.

It is particularly pleasing the new Government is focusing more closely on the ocean as
New Zealand’s vast offshore Exclusive Economic Zone contains significant mineral
assets (as well as substantial fish stocks).

The notes below provided to the Minister include a succinct summary of our project and
particularly its net environmental benefits and is included in this release to further
reiterate these messages to shareholders and stakeholders.

Briefing for Incoming Minister
Honourable David Parker
Minister for Oceans and Fisheries
Minister for the Environment
Attorney-General
Minister of Revenue
Associate Minister of Finance

Summary
The Chatham rock phosphate project offers comprehensive benefits for New Zealand’s
economy and environment and we urge you to consider how it can be progressed so it can
contribute to the COVID-19 recovery.

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Introduction
Chatham Rock Phosphate Limited (CRP) is a Wellington based company that proposes to
dredge rock phosphate from a small part of the central Chatham Rise, about 450km
offshore Christchurch.
Although it has cornerstone investors overseas and is stock exchange listed in both Canada
and Frankfurt (as well as New Zealand) more than 50% of CRP is owned by over 900 New
Zealanders.

Benefits for the Environment
Rock phosphate from the Chatham Rise has exceptional environmental benefits relating to
its properties as a reactive rock phosphate and its exceptionally low cadmium levels.
The directly beneficial environmental effects of using Chatham rock phosphate are low soil
run off, improved soil profile, minimal heavy metals being applied to soils and much lower
carbon emissions through using a New Zealand-based resource rather than transporting it
from the other side of the world.

Ethical, Secure Supply
By recovering rock phosphate from the Chatham Rise New Zealand will have its own supply
without depending on imports from other countries, particularly Morocco, which is mining
rock from a disputed territory. Onshore phosphate mining also impacts on local
communities causing well-documented health issues and social and environmental distress.

Project will pay taxes, create jobs and knowledge
Based on our current financial projections, CRP will pay $35m a year in tax and royalties,
plus ~ $9m a year in port charges.
It will create many high-value knowledge-based jobs in the port, on the mining ship,
undertaking environmental monitoring and broader scientific research, in the agriculture
and hospitality sectors and on the Chatham Islands.
It will build New Zealand’s leadership in marine technology potentially worth billions as
marine mining becomes commonplace overseas and other countries seek this expertise.
By operating in the marine environment we will gain (and share) the knowledge to
implement conservation priorities.

Project History
The deposit, formed 7 to 12 million years ago, was discovered by New Zealand scientists in
1952 and extensively explored during the 1960s, 1970s and 1980s by a range of private and
public sector scientists (including DSIR, NZ Oceanographic Survey).

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An estimated $70 million in current dollar terms was spent on at least seven voyages, each
involving several weeks. The data collected means the deposit is now very well defined. CRP
was granted a 20-year mining permit in December 2013.
The current Exclusive Economic Zone environmental consenting regime came into force in
June 2013 and CRP’s initial application was among the first considered by the Environmental
Protection Authority. It was declined in 2015 and CRP is currently planning to resubmit in
2021.
The mining permit area is 450 km east of Christchurch, at a depth of around 400 metres on
the seafloor of the Chatham Rise and in New Zealand territory. Estimated reserves are 23.4
million tonnes.
We are planning for an operational start two years after receipt of a Marine Consent and
completing a mining contract (to include arrangements for a vessel to undertake the
mining).
CRP’s mining permit assumes an initial mine life of 15 years. We anticipate further
sampling during this initial mining phase will quantify the extent of additional mineable
reserves within the mining permit area.

How the phosphate will be recovered


A modified version of the trailing suction hopper dredger pictured above will suck up a
30cm thick seafloor layer of phosphate nodules, together with the surrounding sand,
separate the nodules from the sand on board the vessel, return the sand to the seafloor and
take the nodules to the operation’s home port. From there an estimated 29% of the nodules
will be processed and used in New Zealand and the balance exported to neighbouring
countries.

First Environmental Protection Authority Decision Recap
Main public concerns submitted
• Removal of seabed and associated biota (e.g. corals)
• Impacts of the sediment plume on the adjacent environment and deep-water
fisheries
• Interactions with marine mammals and seabirds
• Trophic impacts
• Mining inside a Benthic Protection Area (fishing bottom-trawling prohibited)

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But in the hearing independent/opposing experts agreed that:
• Marine mammals unlikely to be affected
• Sea birds unlikely to be affected
• Major fish stocks unlikely to be affected
• Primary food chain productivity unlikely to be affected
• Toxicology effects in water column will be very low
• Uranium not an issue

2015 Decision-making Committee’s summary
• Damage to the benthic environment
• Modest economic benefits compared to environmental effects
• Significant effect on Benthic Protection Area
• Proposed adaptive management wouldn’t address fundamental concerns

The Facts
• Damage to the benthic environment is a one off event, the effects are not
permanent and the affected area is limited to one tenth of 1% of the Chatham Rise
• In contrast a much higher proportion of the Chatham Rise is bottom-trawled every
year and fishing yields remain strong
• The economic benefits were required to be established before the mining permit
was granted by NZ Petroleum and Minerals in 2013. As well as being highly
profitable the project creates jobs in ports, agriculture, environmental monitoring,
and scientific research
• Environmental benefits include reduced carbon emissions, 85% lower run-off into
waterways and significantly lower levels of cadmium. These benefits were ignored by
the DMC
• Only 5% of the Central Chatham Rise Benthic Protection Area would be affected
• The DMC failed to grasp how the proposed adaptive management regime would
operate

Further Information
More detailed information can be supplied to back up this summary document upon
request.
All of this information is already in the public arena due to CRP’s continuous disclosure
obligations as a reporting issuer in New Zealand and other markets.
CRP executives would also welcome the opportunity to brief the Minister in person to
explain how this project can support the Government’s COVID-19 recovery efforts.

Chris Castle, Chief Executive

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For further information please contact:

Chris Castle
President and Chief Executive Officer
Chatham Rock Phosphate Limited
64 21 55 81 85 or chris@crpl.co.nz

Neither the Exchange, its Regulation Service Provider (as that term is defined under the policies of the
Exchange), or New Zealand Exchange Limited has in any way passed upon the merits of the Transaction and
associated transactions, and has neither approved nor disapproved of the contents of this press release.