AIM- and TSX-listed Nautilus is the first company to commercially explore the ocean floor for something called 'gold and copper seafloor massive sulphide deposits', which are considered modern-day analogues of volcanogenic massive sulphide systems – a prime source of the world's onshore copper, gold, zinc and silver deposits.
If it seems a bit futuristic and far-fetched to mine the seabed, consider that Nautilus counts among its shareholders Epion (22,9%), Anglo American (5,8%), and Teck Cominco (5,3%), companies which obviously think differently.
Nautilus' main focus for 2008 is the Solwara 1 project, which is located in the territorial waters of Papua New Guinea, in the western Pacific Ocean.
Solwara is 50 km north of Rabaul township, the main port of the East New Britain province.
Subject to Papua New Guinea government permitting and approvals, development activities at Solwara 1 are expected to start in 2009, and first concentrate sales are expected in 2010 from an onshore processing facility.
For the moment, though, drill work is continuing at Solwara, with November delivering some promising results.
"These results confirm that there is a significant high-grade copper and gold deposit at Solwara 1," says Nautilus CEO David Heydon.
"Results from this set of 36 holes continue to produce excellent mineralised intercepts, like hole SD80 with 11,4 m at 11,1% copper and 6,5 g/t gold, and hole SD109 with 9,6 m at 8,3 % copper and 8 g/t gold."
A total of 111 holes were drilled during the programme this year over the Solwara 1 prospect, including holes to obtain samples for metallurgical test-work.
All samples have been dispatched for analysis, and metallurgical test work is underway.
Apart from work at Solwara 1, Nautilus has also spent 2007 expanding its exploration interests in the Western Pacific.
In November the company announced that it has been granted 16 offshore exploration licences covering 77 552 km2, within the proclamation area of the Kingdom of Tonga.
A further 14 tenements covering 8 267 km2 in the exclusive economic zone of the Solomon Islands have also been granted.
The exploration licences granted in Tonga cover a strike of over 900 km of geology known to contain seafloor massive sulphide occurrences.
The prospectivity of the granted exploration licences has been demonstrated by initial survey work undertaken by marine scientific research (MSR) groups, including groups from the US, Japan, Korea, and Germany.
These MSR groups have identified at least ten prospects where seafloor massive sulphide accumulations have been observed.
Surface sampling by these MSR groups over five prospects returned average results of 22,7% zinc, 4,7% copper, 2 g/t gold and 77 g/t silver from 231 samples.
The licences granted in the Solomon Islands are an extension of Nautilus' Woodlark Basin tenements to the east of Papua New Guinea.
The Kingdom of Tonga is an archipelago of about 170 islands containing 748 km2 of land spread over 360 000 km2 of the southern Pacific Ocean; roughly two-thirds of the way from Hawaii to New Zealand.
The major industries in Tonga's open economy include agriculture and fisheries.
The Solomon Islands is a constitutional monarchy with a parliamentary system of government, and Queen Elizabeth II as head of state.
Nautilus now has about 119 950 km2 of granted tenements, and approximately 250 110 km2 of tenement applications in the territorial waters and exclusive economic zones of Papua New Guinea, Tonga, Solomon Islands, Fiji and New Zealand.
"Following the success of our 2007 exploration programme in Papua New Guinea with the discovery of new seafloor massive sulphide systems, and the development of geophysics and drilling tools, Nautilus continues to build on its first mover advantage . . . develop(ing) a pipeline of projects with its goal to have a resource inventory across the Western Pacific . . . " says Heydon.
WHAT'S IN A WORD?
Solwara means salt water in Papua New Guinea pigin English. Since 2006, Nautilus has used the term to describe it's PNG exploration projects and prospects during its reconnaissance and drilling campaigns.
The Solwara 1 project and Solwara 2 to 8 prospects are on 100% owned Nautilus tenements.
In 1985 seafloor massive sulphide and hydrothermal sulphide systems were discovered in Papua New Guinea by the research vessel the RV Moana Wave, at a site that would later become the Solwara 2 prospect.
The late 1980s and 1990s saw numerous research projects undertaken.
Papua New Guinea was the first country in the world to grant commercial exploration licenses for such deposits when in 1997 Nautilus's first tenement, EL1196, was granted.
The Solwara 1 field was first identified by Australia's Commonwealth Scientific and Industrial Research Organisation (CSIRO) in 1996, while Solwara 4 was discovered in 1991.
Extensive research campaigns between 1993 and 1997 formed the base line knowledge for what would become more intensive commercial development activities.
In March 2005, Nautilus, in joint venture with Placer Dome, undertook new exploration at Solwara 1 aboard the MV Genesis with side scan sonar and dredge sampling.
The dredge and grab sampling confirmed the grade tenor of earlier sampling by scientific research programmes.
Nautilus and Woods Hole Oceanographic Institution completed a further exploration cruise to Solwara 1 in August 2006 where a further 11 grab samples confirmed the grade tenor.
In 2007, Nautilus committed about $23-million on environment studies and exploration activities to develop a preliminary geological resource and associated mine plan for Solwara 1.
This expenditure also includes exploration that led to the new discoveries of Solwara 5, 6,7 and 8.