Chatham Rock acquiring French Polynesian phosphate company
Chatham Rock Phosphate Ltd. [NZP-TSXV; GELGF-OTC; CRP-New Zealand] has signed a formal agreement with shareholders of Avenir Makatea Pty. Ltd., an Australian incorporated company, to purchase all of the issued and outstanding shares of Avenir.
Avenir, through its wholly-owned French Polynesian subsidiary, SAS Avenir Makatea, holds an exploration research permit to explore for phosphate on the French Polynesian island of Makatea. The Makatea Project covers an area of 1,035 hectares (10.36 km2). The island is a well-known source of phosphate and was previously mined until 1966. Avenir has filed an application for a mining concession over the project area which remains in progress.
The parties originally entered into a non-binding letter of intent regarding the acquisition dated December 19, 2020. Under the terms of the acquisition, Chatham will acquire all of the issued and outstanding shares of Avenir in exchange for 17,857,738 of its common shares having a deemed value of 9.16 New Zealand cents per share (8.15 cents), for total consideration of $1,635,769 New Zealand dollars ($1,455,000; $1.5-million (Australian)).
Upon completion of the acquisition, the common shares issued to the Avenir will comprise approximately 29% of Chatham’s total issued and outstanding shares, not including any common shares to be issued upon completion of the private placement announced by the company on March 21, 2021.
Upon completion of the acquisition, Colin Randall, a director and major shareholder of Avenir and since 2016 the full time executive chairman, will be appointed to Chatham’s board.
Avenir’s flagship property is the Makatea phosphate project. This combined rehabilitation and phosphate mining project is located on Makatea Island approximately 240 km northeast of Tahiti, French Polynesia. SAS Avenir Makatea (wholly owned subsidiary of Avenir) was granted an exploration permit on Jan. 28, 2014, and in June, 2016, applied for a mining concession to mine/rehabilitate an area of 600 hectares of previously mined land. The project has a 30-year life.
The application is now being processed under the terms of a new mining code for French Polynesia that was promulgated in January, 2020. The existing environmental code is currently being harmonized with the new mining code.
The project is subject of a public enquiry process that leads to recommendations to the Council of Ministers for the grant of the mining concession. The public enquiry, which will be based on the presentation of an updated environmental impact assessment and an economic benefit analysis, is expected to be announced in Q3 2021.