The National, Wednesday 29th August, 2012
NAUTILUS Minerals Inc, seeking to be the first large-scale miner of copper and gold from the ocean floor, is in talks with potential partners to sell a stake in the project off the coast of Papua New Guinea.
Nautilus may sell shares to help raise US$100 million if it cannot find a partner for the project 1,600m deep in the Bismarck Sea, where the Toronto-based company plans to start production in 2014, chief executive officer Stephen Rogers said.
“We’ve had discussions and continue discussions with a number of parties,” Rogers said.
“There are a lot of people interested in what we are doing, interested in this potential new frontier for the metals sector.”
Nautilus is exploring underwater for metals as rising demand in the past 10 years pushed up prices, while conventional miners battle increasing costs.
The average industry cost to produce a pound of copper climbed 30% to US$1.30 last year, according to data compiled by Bloomberg.
“Land-based grades are getting thinner, costs are obviously going up as a result of that, and of course, we have to push into more pristine wilderness areas to find these metals,” Rogers said.
“There are some benefits offered up by looking at the oceans as a potential source of minerals in the future.”
Nautilus’s biggest shareholders are Moscow-based Metalloinvest Holding Ltd, which owned 21% of the company’s shares as of May 1, London-based Anglo American Plc (AAL) and MB Holding Company LLC, according to data compiled by Bloomberg.
The US$100 million figure does not include the funds that Nautilus still needs to pay for the vessel that will be used at the project, Solwara 1.
The company said on June 1 that there may be a delay in finalising the financing amid tighter banking rules in Europe and a “depressed” shipping market.
Germany’s Harren and Partner is building the vessel and will own 50.01% after it’s delivered.
“We still have to get our vessel programme back on track, but we have a way of doing that, we’re not uncomfortable with that situation,” Rogers said in a recent interview,” Rogers said.
The company may arrange a type of ship mortgage, he said.
Nautilus also is seeking an “amicable” solution before full arbitration begins in a dispute with the PNG government, which owns 30% of the project, Rogers said.
The government agreed in March last year to exercise an option to buy a 30% stake in Solwara 1.
The pact included a deal that PNG pay 30% of the funds Nautilus had already spent, as well as its share of development costs going forward.
Nautilus said on June 1 the government asserted the company had not met certain obligations required for the March 2011 deal and an arbitrator in the dispute was named last month.