Company positions itself as emerging producer

Baeau Tai
CANADIAN-BASED NAUTILUS MINERALS INC. celebrated its second birthday on June 18, as it steps closer to becoming the world’s first deep-water mining exploration and production company after striking a deal with a Norwegian ship owner for a support vessel.

The company says its shareholders will be seeing more aggressive exploration work in Papua New Guinea and Tonga as it positions itself to become an emerging producer in 2010. Nautilus is following the lead set by the petroleum industry to tap vast offshore resources and is planning to mine high-grade Seafloor Massive Sulphide (SMS) deposits of copper, zinc, gold and silver.

Mine planning is well underway for the world’s first seafloor copper gold mine in 1500 metres of water at the Solwara 1 Project in the Bismarck Sea in PNG, 50 kilometres north of Rabaul township.

The 2008 exploration programme will comprise a minimum of 165 days, with four 30-day extension options at Nautilus’ discretion.

Field work will focus on the company’s 100% owned tenements in Papua New Guinea and Tonga, using the proven equipment spread and techniques employed in the company’s highly successful 2007 exploration programme.

Nautilus entered into an agreement with North Sea Shipping Holding to provide a specialist mining support vessel (MSV) for its Solwara 1 project.

North Sea Shipping is a leading Norwegian ship owner and operator in the offshore oil and gas industry. It will provide a 160-metre long dynamically positioned specialist newly built ship on a five-year charter basis with options to extend for another five years.

The agreement with North Sea Shipping to provide a ship for the Solwara 1 project is valued at US$125 million.

Nautilus chief executive, Stephen Rogers, commented: “The MSV award is a key milestone for the Solwara 1 Project. Our exhaustive and highly competitive selection process has yielded an excellent MSV which could not be a better match to the specified requirements.

“The working relationship developed with North Sea Shipping through the negotiation process has created a solid foundation for the future. The MSV award keeps Nautilus on track for commencement of production in 2010, subject to timely approvals.

“There was considerable competition in the market for this vessel, but the structure and offer proposed by North Sea Shipping suited, we believe, our shareholders’ best interests,” Rogers said.

Listed on both the Toronto (TSX) and London (AIM) stock exchanges, Nautilus has among its cornerstone shareholders three of the world’s largest resource companies and its alliances and technical partnerships positions it as a world leader in underwater exploration of SMS deposits.

The company holds more than 360,000 sq km of tenement licences and exploration applications in the exclusive economic zones and territorial waters of Papua New Guinea, Fiji, Tonga, the Solomon Islands and New Zealand along the western Pacific Ocean’s Rim of Fire.

In May, the company made a US$1.3 million seed capital investment for a 51% equity interest in a company associated with director and outgoing chief executive, David Heydon. The company will be involved in the exploration for ultra-deepwater mineral resources.

On the eve of its second anniversary, Nautilus has held several key events to formally transition the CEO role to Rogers and demonstrate progress to 2010 production.