Nautilus to raise $100m, fully-funding offshore mining project

Bringing on a significant new investor, Nautilus Minerals says it has enough cash to pay for offshore development of its Solwara 1 seafloor mining project

Author: Kip Keen
Posted: Thursday , 01 Sep 2011

HALIFAX, NS -

Nautilus Minerals (TSX: NUS) is ever closer to production at Solwara 1, its underwater polymetallic mining project in Papua New Guinea's Bismarck Sea.

On Wednesday Nautilus announced it would raise $100 million through a private placement that, in addition to its $112 million in cash reserves and funding promises from project partners, would cover all offshore development costs of its ground-breaking Solwara 1 project.

By and large, heavy-weight investors backed the private placement with Oman-based Mawarid Mining, a subsidiary of MB Holdings Company, accounting for the bulk of the financing.

Nautilus said MB would take a 10 percent stake for $50 million and meanwhile existing minority shareholders Anglo American and Metalloinvest would maintain their respective 11.1 percent and 21 percent interests in Nautilus by participating in the subscription as well.

Institutional investors bought up the balance of the private placement that in total comprised 39 million shares at C$2.52.

With the funding in place, Nautilus said its board of directors had officially given the development of Solwara 1 a green light.

But, formality aside, for all intents and purposes Nautilus has already been forging ahead with the development of Solwara 1.

Earlier this year Nautilus received a mining lease covering Solwara 1 and began ordering key equipment including a $167 million production support ship that will dewater an ore slurry pumped to it from the seafloor.

Nautilus' plan is to mine an underwater massive sulphide deposit on the seafloor where it so far holds 870,000 tonnes @ 6.8 percent copper, 4.8 g/t gold, 23 g/t silver and 0.4 percent zinc in indicated resources.