New Zealand: Chatham Rock Phosphate Inks Survey Agreement with Odyssey Marine

 

Chatham Rock Phosphate has executed a charter agreement with Odyssey Marine Exploration, Inc. (Odyssey) under which Odyssey will undertake site investigation work for Chatham Rock Phosphate in its offshore permit area on the Chatham Rise. Reaching this agreement is an important milestone as it is expected to provide very significant additional data for the Chatham Rise project.

Details of the Ship Charter

Odyssey’s vessel “Dorado Discovery” will be departing soon from Auckland for 11 days and for a further period in January. The “Dorado Discovery”, 100m in length, is specially set up for deep-sea marine mineral exploration and has been undertaking such work in the SW Pacific for the last 15 months. The forthcoming Chatham Rock Phosphate work, to be undertaken 450km east of the South Island, will focus on underwater surveys with sophisticated multi-beam sounders to map the seabed topography and a special instrument package that contains a magnetometer, sediment sounder and sidescan sonar.

The deep-tow package will be towed at a water depth of 350m one kilometre behind the vessel and will provide images of the seafloor for geological and environmental studies as well as mapping the nature of the sediment in the top few meters of the seabed.

Odyssey provides and operates the vessel and equipment with Chatham Rock Phosphate managing the work program. The data will be used by our partner, Netherlands dredging company Royal Boskalis Westminster, to refine their already completed preliminary design of the phosphate recovery system. The data will also form important baseline data of the environment.

The survey will focus on the 200 square kilometres of sea floor which is already identified as the most prospective area within CRP’s 4726 square kilometre prospecting licence.

Equity Conversion Rights

The cost to Chatham Rock Phosphate for the work being undertaken in December is estimated at USD$1.2 million. Under the agreement these costs will accrue and bear interest before being satisfied as follows:

Payment in Cash: Chatham Rock Phosphate may pay all or part of these costs in cash on or before 1 March 2012 provided it gives Odyssey seven days notice in writing of its intention to do so.

Conversion by Odyssey: Following 1 March 2012 or, on receipt of the notice specified above where the costs are eligible for conversion, Odyssey may elect to convert all or part of the costs to ordinary shares of Chatham Rock Phosphate.

Conversion by Chatham Rock Phosphate: At any time prior to 1 March 2012, Chatham Rock Phosphate may give notice to Odyssey to convert all or part of the costs to ordinary shares of Chatham Rock Phosphate on 1 March 2012. If Chatham Rock Phosphate makes this election, it must also issue one option to Odyssey for every 1.5 shares that are converted. The options issued on this event would be exercisable into ordinary shares on the basis of one option for one share, have an exercise price that is 150% of the conversion price and a term of two years during which they must be exercised.

The conversion price, whether the conversion is elected to occur by Odyssey or Chatham Rock Phosphate will be $0.20 per share. However, if Chatham Rock Phosphate issues shares at a lower price on or before 1 March 2012 the conversion price may then reduce.

[mappress]
Subsea World News Staff , December 09, 2011