Nautilus Minerals says it will go ahead with its high grade copper-gold exploration project in the Bismark Sea, after an international arbitrator compelled the Papua New Guinea government to abide by its joint venture agreement with the company.
Credit: Nautilus Minerals
Last week, the former Chief Justice of the High Court of Australia, Murray Gleeson, declared that the PNG government had breached an agreement it had signed in March 2011, by failing to buy a 30% interest in the project.
The PNG government had claimed Nautilus had not met certain obligations, and therefore it was entitled to terminate the agreement.
Gleeson ordered the government buy the 30% interest in the project and pay its share of all project expenditure incurred to date.
In a statement, Nautilus said it expected a payment of US$118 million (K303 million) by 23 October.
A company spokesperson said Nautilus was looking forward to bringing the Solwara 1 project into production, although no date has been set.
PNG’s Prime Minister is yet to respond to the ruling. Nautilus executives are expected to hold a media conference later this week.
Earlier this year, the company said it had spent US$80 million on exploration so far, and despite opposition from environment groups, PNG’s Vice Minister for Mining, Wera Mori, a professional geologist, described seabed mining as healthy for PNG.
He said there would not be any footprint of environmental damages left behind, unlike other land-based mining, gas and oil explorations.
Nautilus stocks in Toronto rose 51% immediately after last Thursday’s ruling.
Nautilus last year signed up China’s copper smelting group, Tongling Nonferrous Metals Group Co. Ltd, as its first customer.
About Nautilus Minerals and Solwara I
Nautilus holds more than 500,000 square kilometres of tenement applications, in PNG, Tonga, Fiji, Vanuatu, the Solomon Islands, New Zealand and the Central Pacific. Previous exploration has already identified 19 mineralised seafloor systems in the Bismarck Sea, and 19 in Tonga.
The Solwara 1 deposit, which sits on the seafloor at a water depth of 1600 metres, has a copper grade of approximately seven per cent, according to Nautilus. That compares with land-based copper mines, where the copper grade today averages 0.6%. Gold grades of more than 20 grammes per tonne have been recorded in some intercepts at Solwara 1 and the average grade is approximately six grammes per tonne, the company reports.
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It’s great having this type of Mining in our ocean (Solwara 1). Hope this will do a life changing in the well being of the people in our areas where the operation will occur. This is a one of a kind and I as a concern New Irelander and a landowner, I am looking forward to this awesome Mining Project which will occur in Solwara 1, West Coast Namatanai.
Great News.