Eda Kopa files claim for K168.7mil after project stalled

EDA Kopa (Solwara) Ltd has filed a claim for approximately US$51 million (K168.7 million) under a Canadian court supervised creditors process initiated by the parent company of its joint-venture in the Solwara 1 project, Nautilus Minerals Niugini Ltd (Nautilus PNG).
Eda Kopa is a wholly owned subsidiary of Kumul Minerals Holdings Ltd.
Chairman Peter Graham said the claim related to the unearned component of the contribution originally advanced by Eda Kopa to the Solwara 1 project.
The Solwara 1 deep sea mining project was a venture to mine polymetallic sulphide deposits located on the seabed in an area approximately 50km north of Rabaul, East New Britain and 30km west of New Ireland.
Graham said: “In 2014 Eda Kopa contributed US$120 million (K375 million) representing its full share of all project construction and development costs, both past and future, for its 15 per cent stake.
“Eda Kopa funded its contribution to the project by way of a K375 million loan from Bank South Pacific (BSP) that was guaranteed by the State.
“Nautilus PNG, the project manager and joint-venturer responsible for funding the remaining 85 per cent of the project, has not been able to meets its funding obligations and, as a result, the project has stalled with a substantial proportion of the development work still to be undertaken.
“Eda Kopa has made claim for the portion of its contribution relating to the stalled development work.
“While the prospects of creditors achieving any meaningful recovery appears low, this claim has also been filed in an effort to preserve Eda Kopa’s rights and position.”
In February, the Canadian-listed parent company of Nautilus PNG, Nautilus Minerals Inc, sought protection from its creditors under the court supervised Companies’ Creditors Arrangement Act (CCAA) process and initiated a sales and investment solicitation process (SISP) to restructure its business and financial affairs.
The SISP was terminated last month (June) and Nautilus and its principals are now directing their efforts towards reaching an agreement with creditors under the CCAA with a view towards potential restructure of Nautilus’ various projects and assets.
Eda Kopa’s claim was made in accordance with this process.
“While Eda Kopa has been patient in its dealings with Nautilus as that company has undertaken various efforts to secure funding, in light of Nautilus’ difficult circumstances, Eda Kopa now feels compelled to make the claim and take such action as it can to best protect the State’s interests,” Graham said.