The company behind the world’s first attempt to produce copper, gold and silver from the ocean floor has announced a private share placement aimed at funding the project’s development. Nautilus Minerals will issue almost 38 million shares to a number of investors in a bid to raise Can$34 million needed to continue building its Solwara 1 seafloor production system and key equipment including a lift system, production tools and riser.
“At the end of June, the major equipment items of the system were 51% complete, and a significant percentage of the sub components have been delivered,” said Nautilus president Steve Rogers.
Existing Nautilus strategic shareholders, MB Holdings, Metalloinvest and Anglo American, are among those participating in the private placement, with MB Holdings subscribing for 20 million shares, to increase its stake to 16.9%. The placement will be completed in two tranches and is subject to regulatory and stock exchange approval.
“There is strong support from the major shareholders for the company to maintain the build program for the system and ensure the realization of deep sea resource production as an industry,” said Steve Rogers.
Nautilus has made some major progress this year with its Solwara 1 project in the territorial waters of Papua New Guinea, despite delays due to a break down in joint venture finance which is now the subject of international arbitration.
“Whilst we now expect some delay to the vessel construction program the seafloor production equipment build continues and we are working hard to minimize the overall impact to the production date,” said Steve Rogers.
The company has also negotiated a landmark offtake agreement with Tongling Nonferrous Metals Group, for up to 4 million tonnes of material from the Bismarck Sea deposit. The three year contract provides for Tongling to purchase between 900,000 tonnes and 1.3 million tonnes of material from the deposit each year, from the first delivery which is scheduled to take place in quarter 4, 2013.
Nautilus also holds about 600,000sqkm of highly prospective exploration acreage in the western Pacific - in PNG, the Solomon Islands, Fiji, Vanuatu and Tonga - as well as in international waters in the eastern Pacific.