A former Australian chief justice will attempt to resolve the dispute between the Papua New Guinea Government and Nautilus Minerals regarding the delayed opening of its seafloor gold and copper mine.

In March 2011 the PNG Government signed an agreement with Nautilus to buy a 30% stake in the Solwara 1 project, which is the world’s first gold-copper seafloor mine, in the Bismarck Sea, off the PNG coast. However, since then the project has been the subject of a major environmental campaign against seafloor mining and the government has failed to pay its investment share.

The government has also accused Nautilus of breaching the agreement, claiming the company hasn’t met certain obligations which are necessary for completion of the agreement. This claim is refuted by Nautilus.

Former chief justice of the Australian High Court, Murray Gleeson, will undertake arbitration of the dispute in Sydney during the coming months.

Both parties say they are continuing to resolve matters amicably, however a resolution outside of the arbitration process will have to be ratified by PNG’s National Executive Counsel (NEC).

Until the dispute is resolved, project completion will be delayed and may not occur, leaving Nautilus to carry the costs. This may lead to Nautilus needing to slow or defer the build program for project equipment, which would have consequential impacts on the scheduled commencement of operations and overall costs for Solwara 1.

Nautilus is the first company to explore the ocean floor for polymetallic seafloor massive sulphide deposits. It is aiming to produce copper, gold and silver at Solwara 1 and has been granted all necessary environmental and mining permits.

The Canadian-listed company has already signed a three year sales contract with Tongling Nonferrous Metals for up to 4 million tonnes of material from the project, with the first delivery scheduled to take place in quarter four of 2013.

www.nautilusminerals.com

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