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Interest soars in Widespread's Chatham Rise Mineral Prospect Application

Consortium partners Widespread Portfolios and Widespread Energy are receiving strong interest in the licence application progress of its Chatham Rise rock phosphate prospect from international mining companies and local fertiliser giants.

The consortium applied in August 2007 for a prospecting permit over a 3,048 km2 area 600 km east of Christchurch in April which includes significant seabed deposits of rock phosphate (also known as phosphorite) and other potentially valuable minerals.  

"We have now been approached by the major New Zealand fertiliser companies as well as two huge international mining groups," according to managing director Chris Castle.  "All appear to be very keen to be involved in investing in the project or buying what is extracted."

Approval for the prospecting permit has been delayed while the government develops proposed legislation for regulating environmental effects of activities in New Zealand's Exclusive Economic Zone (EEZ). Drafting of the legislation is now under way, and the Minister's intention is to introduce a Bill into the House before the end of August.

The strong corporate interest centres on the potential of a major new rock phosphate source at a time when the rapid increase in demand for biofuels is promoting substantially increased demand for fertilisers and ongoing increases in fertiliser prices.

Fletcher Challenge Corporation, and other companies explored the area first in the 1980s. Rapidly increasing superphosphate prices and advances in underwater mining technology, such as that now being undertaken by Neptune Minerals and Nautilus Minerals, means exploration for submarine mineral deposits is now much more feasible. 

The phosphorite resource may exceed 100 million tonnes (with a current market value of more than NZ$46 billion) and could prove to be an economically viable source of fertiliser depending on extraction costs.

Australian company Mine Makers (MAK) has a measured resource of 71 million tonnes in the Northern Territory. Since annnouncing this in February the market value of MAK has risen from $A20 million to a peak of $A267 million.

Widespread plans a two-year work programme that, if successful, will be followed by more detailed exploration and evaluation. This will include feasibility studies updating the work already undertaken 25 years ago reflecting today's new technology and different costs.

The advances in technology include global positioning systems (GPS) that now make it possible to precisely mine the seabed with automated equipment.

"Recently published results of feasibility studies carried out for deep sea miner Neptune Minerals are very encouraging," Mr Castle said.

"Our license application has been surrounded by a subsequent application of 71,750 sq km by Auckland company Chatham Phosphate Limited 

Recent major increases in the market value of rock phosphate (from US$50/tonne to US$375/tonne in the last year) means profitable exploitation of this marine mineral deposit is now more likely to be feasible.

At present virtually all of the rock phosphate used by the New Zealand fertiliser industry is imported from Morocco.  Associated freight costs, driven by soaring oil prices, are exacerbating the problem facing the New Zealand fertiliser industry. So a New Zealand based resource would benefit all stakeholders in the fertiliser industry and reduce the exposure of the agriculture sector to increasing oil prices.     

For and on behalf of the Board,

Chris D Castle

Onekaka, 27 July 2008