Chatham Rock Phosphate - CRP

[GRIFFIN]

Gee Intel that sounds a tad gloomy for CRP, you better give Chris C a ring and tell him all those hoops he's jumping through is a total wast of time.

[percy]

Help please.
What is the difference between phosphate and potash.?
I have RUM ax who are developing a potash resource.

[hilskin]

Help please.
What is the difference between phosphate and potash.?
I have RUM ax who are developing a potash resource.

Try this link
http://potashinvestingnews.com/7024-...ifference.html

You Tube Video
http://www.youtube.com/watch?v=f6GULmOnDDk#t=62

[MAC]

Hmmm, I don’t think an issuer paid research report can convince me.

The economics of a 70 EUR cash mining cost do not at all bode well for the future of this company in my opinion.

50 EUR = 68 USD
60 EUR = 81 USD
70 EUR = 95 USD

From my research so far, Morocco OCP was operating at a phosphate mining cost of $45 USD per tonne FOB. CRP’s ability to get a cheap mining cost, below say 50 EUR are damn near impossible for three reasons,

1 – The operator is also a 20% equity holder. Would you rather take your profits at the bottom of the income statement or the top? Boskalis are incentivised to charge a higher rate so they can optimize their profits, not CRP’s.
2 – Boskalis has to charge a rate that will at least earn them WACC on the capex to fit out the boat + the opportunity cost of not utilising it in other operations. Back solving these costs in approximate terms is pushing that mining rate high. I read they will spend approx 200m USD somewhere.
3 – Boskalis are the only partner working on the boat, giving them a huge advantage as the project will be delayed many more years if they cant agree on a price, costing shareholders money.

When you couple these unknown risks around contract pricing with the fact that CRP are looking to enter a market (phosphate) which has hundreds of years of supply and will be profitable for the biggest players at a mining cost south of $100 per tonne Morocco quality FOB.

These risks have not at all been explained by Edison, and to no surprise there is no analysis of where CRP sits on the cash cost curve, a pitfall of issuer paid research and a good example of why you should be doing your own.

Also remember you have to discount CRP’s price as it is an inferior product compared to Morocco on a P2O5 count (33% vs 24%)

Have a look Intel through the prior capital raising documents, some of your concerns above will be alleviated there, though not all risks can ever be satisfied.

Edison do have a reputation to uphold, but I agree we should recognise that they also have to rely on what information they get from CRP as they do from the hundreds of other companies they research. I was pleased actually with the pragmatism and the balanced criticisms in their last report.

There is no doubt that CRP is a high risk high reward stock. It's also complex to research and to work through, I spent six months before making a modest investment. Good diversification and small percentage holdings is the key, don't go mortgaging your house.

[percy]

Try this link
http://potashinvestingnews.com/7024-...ifference.html

You Tube Video
http://www.youtube.com/watch?v=f6GULmOnDDk#t=62

Thank you for the link.

[Intel]

Not to be completely against CRP, but lif you look at these two new projects expected in Angola and PRC (just one exmaple of multiple projects I've found).

http://www.minbos.com/assets/documen...vember2012.pdf

Scoping studies with Opex of USD$57 and USD$50 respectively. They quote they are in the lower half of the cost curve. Now note that they havent said they weer in the 90th percentile but the bottom half.

You could buy this company at a significant discount compared to CRP. Phosphate exposure, much greater potential for upside and its ASX listed. I just dont understand why you would invest in a mining project like CRP's when there are so many risks and at current spot rates the reward does not seem to compensate those risk.

On my figures, CRP becomes worthless at a spot rate of USD98. This is being incredibly generous to CRP regarding freight costs etc. Using current FX rates and mining of 70 EUR.

Plus you have paradise phosphate project at Mt Isa in Northern queensland, if that comes online and they become exporters of rock phosphate, the entire "freight" advantage CRP relies upon is toast. Or even worse, China lifts export bans on rock phosphate..

I believe their are much cheaper alternatives to CRP if you wnated exposure to phosphate. IMHO

[blackcap]

Agree with you on that one Intel. CRP is going no where fast and there are still too many risks and unknowns. It would be better to buy CRP once a lot of the unkowns were gone. The cost of raising the phosphate from the sea bottom will imho blow out as well. Please people do not rely on Edison reports. I take them with a grain of salt. Company commissioned...... you gotta be cynical really. caveat emptor.

But if you do want exposure to CRP, a cheaper entry would be buying AOR. You can then get into CRP at a good discount and get whatever AOR may hold for free.....

[MAC]

I’ve only a small percentage holding in CRP and thus I’m not exposed to a lot of risk, this stock for me is more a high risk high reward interest. I’d like to see a local company prosper and benefit the economy and farming industry.

This article from the ODT is one of the more balanced I’ve read recently, although most journalists seem to totally ignore or overlook all the on land environmental benefits to the dairy industry and other sectors, not sure why.

http://www.odt.co.nz/lifestyle/magaz...77/sea-trouble

''We expect to get both permits by mid-2014. Then it's two years to modify the ship. The day we get those consents this company is worth $500 million.''

Hmmm, all the impact studies are complete which are usually the time consumer, the government is supportive, the environmental balance onshore/offshore seems fine, I actually think the odds are in CRP’s favour but not necessarily the schedule. It may come down to who can pay the lawyer’s for the longest. Although having said that the mining permit must be very close now.

[hilskin]

Thanks for sharing MAC, great article. There is still a long way to go for this company but it will surely fly once it has the required consents in place.
I have a small holding and not looking to buy more until it has de risked itself. I see this company as a long term prospect, the sort of company you throw some spare cash at that you are prepared to lose if it all turns pear shaped. High risk but big returns if they get it right.

[MAC]

Thanks for sharing MAC, great article. There is still a long way to go for this company but it will surely fly once it has the required consents in place.
I have a small holding and not looking to buy more until it has de risked itself. I see this company as a long term prospect, the sort of company you throw some spare cash at that you are prepared to lose if it all turns pear shaped. High risk but big returns if they get it right.

I think they'll get there too. I've been following the CRPOB (70c options) market also, this week the sellers have totally gone and the stack is clear, but until recently you could pick up these options (post marine consent expiry) for 3c, another way of balancing the binary nature of the risk.