Widespread Energy managing director Chris Castle told a conference in Russia yesterday that a first-year progress report on the Chatham Rise rock phosphate project may be ready by Christmas, two months earlier than specified.In February, Widespread w
Widespread Energy managing director Chris Castle told a conference in Russia yesterday that a first-year progress report on the Chatham Rise rock phosphate project may be ready by Christmas, two months earlier than specified.
In February, Widespread won a prospecting license for over 4000 square kilometres of seabed on the central Chatham Rise, east of Christchurch.
By fast-tracking the project's evaluation, the company hopes to decide on whether to apply for a mining license by the end of 2011.
“We’re achieving significant progress on a number of fronts and this project is developing a lot of momentum,” Mr Castle told shareholders last month.
The company's planned 2011 exploration programme includes environmental data collection and seabed sampling, establishing fertiliser market linkages and a university research programme.
The company hopes to complete a bankable feasibility study over the next year.
In May, a Rockpoint Corporate Finance pre-feasibility study found that the project had a realistic possibility of being commercially viable.
Rockpoint Finance gave the project a conservative current market value of $20.9m, with the potential to earn net profit before tax of $40m per year.
Mr Castle told the international Underwater Mining Institute conference in Gelendzhik, Russia, that the depth and sporadic distribution of the rock phosphate are key challenges.
The phosphate is located in two to 150mm nodules in a one metre layer of soft, chalky clay sediment and averages 66 kg per metre, but with great variability. The project's depths of 400m would be a record for underwater phosphate extraction.
Mr Castle will meet with potential suppliers of research ships and equipment and companies specialising in a range of extraction techniques while in Europe.
He stressed that environmental considerations are “very important” and that the company is in consultation with fishing, conservation, Maori and other interest groups.
Widespread Portfolios continues to report an approximately 70% discount between market price and net asset backing per share - a factor which Mr Castle has suggested may drive the company to list the Chatham Rise project on the Toronto exchange.
