Ngāti Mutunga and Chatham Rock Phosphate sign agreement

April 16 2019

WELLINGTON, New Zealand – Chatham Rock Phosphate Limited (TSXV: “NZP” and NZAX: “CRP” or the “Company") advises with great pleasure that today we executed an Information Sharing and Collaboration agreement with Ngāti Mutunga O Wharekauri AHC (Ngāti Mutunga).

CRP holds a mining permit to extract rock phosphate from an offshore area located on the Chatham Rise (the Project). In order to pursue the Project CRP needs to obtain a marine consent under the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012 (Marine Consent).

Ngāti Mutunga is a wholly owned subsidiary of Ngāti Mutunga o Wharekauri Iwi Trust, based on the Chatham Islands and has a significant interest in protecting the Chatham Islands marine environment and securing the economic, social and cultural well-being of the Chathams community.

Following discussions between the Parties they now wish to formally collaborate on the Project with a view to:

• Developing a CRP Marine Consent application that meets the environmental, economic, social and cultural objectives of both Parties individually and together;

• In the event that the content of such an application is mutually agreed, to formally support the lodging of the CRP Marine Consent application for approval;

• In the event that the CRP Marine Consent application is successful, ensuring that all operations implemented under that consent are carried out in in a manner that best mitigates environmental effects and respects indigenous rights, beliefs and customs to protect the interests of the Chatham Islands community; and

• Ensuring that the Chatham Islands community realises tangible benefits from the Project.

The first objective of the Parties is to arrange close engagement with the Chathams community to ensure that the Project proceeds in a form that satisfactorily addresses both the reasonable concerns and aspirations of that community. The agreement will be a success if it results in formal community support for the Project. If mutually agreed ways of addressing reasonable community concerns and aspirations cannot be found then the terms of the agreement will no longer apply.

Ngāti Mutunga o Wharekauri Asset Holding Company director Tom McClurg said “we consider this Project to be one that can potentially work for the benefit of our people, our economy and the environment. We look forward to working closely with the Chatham Rock Phosphate team to ensure that commercial, social and cultural benefits are realized by this Project and that these benefits are not at the expense of the marine environment that is so important to us all. We applaud the willingness of CRP to share information and respond to community perspectives that is evidenced by this innovative agreement”.

Chatham CEO Chris Castle noted “the communities of the Chatham Islands, represented by and including Ngāti Mutunga o Wharekauri, Moriori, and the Chatham Islands Enterprise Trust (CIET), are the stakeholders most directly affected by the operations of our proposed rock phosphate recovery operation. Significantly these stakeholders also have major fishing industry investments in the waters surrounding the Chatham Islands.

It’s very exciting that we have reached a point where we can begin working together to ensure that this project can proceed in a manner that protects and benefits all concerned. The signing of this collaboration agreement is a very, very significant milestone for Chatham Rock Phosphate as it signals important support for our project (if it is appropriately managed) from such directly affected stakeholders.

We are also gratified that Ngāti Mutunga o Wharekauri is proposing to make a significant future investment in Chatham Rock Phosphate if the agreement proceeds and the Marine Consent is obtained. In those circumstances Ngāti Mutunga o Wharekauri and possibly Moriori and the CIET would receive options that are in total equal to 15% of the number of shares on issue at the time a Marine Consent that has their support is granted (being 5% per party). The exercise price of these options will reflect and recognise the accumulated investment made to that date by our shareholders.

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