Chatham's Korella MCP to supply DCP/MCP in Queensland

The most recent news, dated October 22, 2025, states that Chatham's subsidiary, Korella MCP Pty Ltd, plans to supply Dicalcium Phosphate (DCP) and Monocalcium Phosphate (MCP) to lick block manufacturers in Queensland. The company is advancing plans for a 30,000-tonne-per-annum DCP/MCP plant in Cloncurry, Australia, utilizing a novel green technology that avoids the dependency on sulphuric acid and generation of phosphor-gypsum waste. The proposed system is modular, allowing for 5,000 tpa modules, which suggests lower initial capital expenditure and potential for gradual expansion. Discussions are currently underway for technology licensing. This initiative is focused on the Korella North project, which is currently in the feasibility stage for this specific development.

This news presents a new, diversified revenue stream for the Korella North project, focusing on the animal feed market with a "green" production technology and modular expansion. While conceptually positive, its material impact is tempered by several critical factors:

1. Uncertainty of Korella Asset Sale: The company announced a proposed sale of its Korella projects (North and South) in January 2025 for AUD 4.1M cash and significant royalties. However, due diligence for this sale has been repeatedly extended, and the prospective buyer, Marshall Group, moved to non-exclusive negotiations, indicating significant uncertainty regarding the sale's completion. The company's continued announcements of development plans for Korella North (export plans, RailPhos, Germanium exploration, and now DCP/MCP production) suggest they are actively pursuing operational strategies, potentially implying the sale is unlikely to materialize or that they are preparing for that outcome. This creates conflicting signals regarding the strategic direction of the Korella assets.

2. Financial Position: Chatham Rock Phosphate Ltd. is in a precarious financial state. As of March 31, 2025, the company had only CAD 35,206 in cash and a negative working capital position of approximately CAD 294,107. Recent private placements have consistently fallen short of their targets (e.g., CAD 111,940 raised out of CAD 350,000 target in March 2025; CAD 138,200 raised out of CAD 175,000 target in July 2025), highlighting a persistent inability to raise sufficient capital even for modest needs. While the new DCP/MCP plant is described as having "low capex" and being "modular," a 30,000 tpa plant (even in modules) will still require substantial capital for a company with such limited funds. The feasibility stage and ongoing technology licensing discussions mean this is an early-stage initiative, far from generating revenue.

3. Project Overload: The company is currently pursuing multiple initiatives for Korella: direct mining and domestic sales, lump phosphate export to Asia (yellow phosphorus for Li-Fe-P batteries), the ambitious RailPhos project (10 Mtpa rail network), germanium exploration, and now DCP/MCP production. While diversification is generally good, the sheer number of early-stage, capital-intensive projects being pursued simultaneously, given the company's financial constraints, raises concerns about focus, execution capability, and further dilution.

In summary, the news is a positive step in potentially diversifying the value of the Korella North asset and highlights innovative "green" technology. However, it does not address the fundamental capital deficit or the critical uncertainty surrounding the Korella sale, which remains a primary strategic development for the company. The material impact is therefore limited to being a routine, positive step in long-term project development, rather than a game-changer for the company's immediate financial viability or stock performance.

Chatham Rock Phosphate Ltd. is an exploration and development company focused on phosphate resources. It has been in a "renaissance period" over the last 4.5 years, transforming from a single-project company with permitting hurdles to a group with multiple projects closer to generating cash flow. Its key projects include:

• Korella Project (North and South, Queensland, Australia): These properties are the primary focus of recent news. Korella North holds a mining lease (ML100379) and exploration permits. The phosphate from Korella is noted for being "ultralow in cadmium" and "extremely low arsenic values," making it highly desirable for specific applications, particularly in the production of yellow phosphorus for lithium-iron-phosphate (LFP) batteries. The company has been pursuing multiple development paths for Korella, including direct mining for domestic sales, export of lump phosphate to Asian markets (China, Vietnam, Malaysia, Indonesia), and the ambitious "RailPhos" project to establish rail infrastructure for large-scale export (up to 10 Mtpa). More recently, a feasibility study for a DCP/MCP plant for animal feed in Queensland has been announced. However, the future of these assets is complicated by a proposed sale of Korella projects to the Marshall Group, which is currently in non-exclusive due diligence with significant uncertainty.
• Chatham Rise Marine Project (New Zealand): This is the company's original project, granted a mining permit in 2013. It faced significant permitting challenges but has seen renewed optimism due to New Zealand's new "Fast-track Approvals Bill," which facilitates reapplication for marine (environmental) consent. The project envisions 1.5 Mtpa production, with an estimated production start in 2028. It is also noted for having rare earth element potential and low-cadmium phosphate.
• Avenir Makatea Project (French Polynesia): An onshore phosphate mine/rehabilitation project targeting 250,000 tpa production. The company is working on completing the permitting process, with expected operating cash flows in 2026.
• Korella South Exploration Lease (EPM28187, Queensland, Australia): Beyond phosphate, the company is also exploring for germanium, a critical mineral, in this area, based on its geological prospectivity.

Chatham Rock Phosphate is positioning itself to be a supplier of low-cadmium phosphate, which is increasingly important in global markets, especially Europe, and for high-value applications like LFP batteries.