Widespread Portfolio intends to list its Chatham Rise rock phosphate project offshore, citing a lack of market depth and investor interest in NZ.The project, over 4000 square kilometres of seabed east of Christchurch, has a current independent valuation o
Widespread Portfolio intends to list its Chatham Rise rock phosphate project offshore, citing a lack of market depth and investor interest in NZ.
The project, over 4000 square kilometres of seabed east of Christchurch, has a current independent valuation of $20.9 million and, if successful, would revolutionise New Zealand's fertiliser usage.
The two companies that hold the Chatham Rise joint venture are Widespread Energy (90%) and parent Widespread Portfolios (10%), both currently listed in NZ.
In an announcement to NZX today, Widespread managing director Chris Castle said that a “lack of local depth and investor interest in projects of this nature” made the decision to list offshore an “inevitability”.
The lack of comparable listed fertiliser companies on the NZX is also a concern.
“On overseas markets the activities of minerals and fertilizer sector companies are better understood, regularly researched and form a legitimate part of many investors’ portfolios," he said.
Markets under consideration for the project are the ASX (Australia), HKEX (Hong Kong) and TSX.V (Canada).
It is expected that the move would occur by setting up Widespread Energy as a 100% holder of the project, transferring all other Widespread Energy investments to Widespread Portfolios, and then listing Widespread Energy offshore.
Widespread Energy aims to raise $1.2m to $1.5m to fund working capital costs and costs relating to the overseas stock exchange listing. Further details will be announced later this week.
The listing process is expected to take six months and currently has a target date of early May 2011, pending a number of approvals.
Mr Castle foreshadowed today’s announcement in an interview with NBR in July.
“At the moment, we’re being completely ignored by investors and I’m philosophical about that,” he said, referring to Widespread Portfolio’s consistent 60-70% discount between market price and net asset backing per share.
He indicated in July that listing the Chatham Rise project overseas was one possible way to secure a higher market value for the project.
Widespread launches university programme
Mr Castle – currently in Singapore - today announced several other project milestones.
Mr Castle and project principal scientist Dr Robin Falconer have met in Europe with several leading dredging companies, owners of research ships and with German science organisations.
The Widespread joint venture has agreed to sponsor a university research programme related to certain properties of the phosphorite nodules and is seeking to fund other related university research.
NIWA has recently been commissioned to undertake further work on the project.
In addition to the Chatham Rise project as key asset, Widespread Portfolios holds interests in China-based explorer King Solomon Mines, Toronto listed international Asian Mineral Resources and three gold prospecting companies including NZ-based Glass Earth Gold.
Widespread Portfolio (NZX: WID) shares last traded unchanged at 16c, and Widespread Energy (NZAX: WEN) shares unchanged at 13c.
