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Nautilus Minerals secures vessel charter

Nautilus Minerals secures vessel charter

Photo by Nautilus Minerals

6th November 2014

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – Seafloor-mining pioneer Nautilus Minerals on Thursday reported that it had secured a vessel charter to be deployed at the Solwara 1 copper/gold project, offshore Papua New Guinea (PNG).

Dubai-based marine solutions company Marine Assets Corporation (MAC), which specialises in delivering new-build support vessels for the offshore industry, had agreed to own and provide marine management of the chartered vessel.

Nautilus would charter the vessel for at least five years at $199 910/d, with options to either extend the charter or buy the vessel at the end of the charter period.

Nautilus said the vessel would first serve as the operational base for the joint venture (Solwara 1 JV) to be formed by Nautilus and PNG’s nominee, Eda Kopa (Solwara), a subsidiary of Petromin PNG Holdings, to support the Solwara 1 JV seafloor mining operations, in the Bismarck Sea.

Under the terms of the arrangement, MAC would contract Fujian Mawei Shipbuilding, based in Fujian province, in south-eastern China, to design and construct the vessel according to Nautilus’ specifications. The shipbuilding contract would be signed by month-end.

After MAC had paid the first instalment under the shipbuilding contract, Nautilus would be required to pay a $10-million deposit to MAC. The Solwara 1 JV would pay a further charterer’s guarantee of $18-million to MAC as soon as the charter had taken effect.

The completed vessel would measure 227 m in length and 40 m in width, with accommodation for up to 180 people, and generate about 31 MW of electricity. All of the below-deck mining equipment would be installed in the vessel during construction to reduce the equipment integration required after the vessel had been delivered.

The JV expected to take delivery of the vessel late in 2017.

“We are excited to achieve this significant milestone and secure a vessel contract with such an experienced vessel provider as MAC. We appreciate the continued support we have received from Eda Kopa in reaching this milestone and, together with them, look forward to working with MAC and the shipyard in seeing the delivery of our first vessel, [as well as] making seafloor mining a reality,” Nautilus CEO Mike Johnston commented.

With the vessel charter agreement in hand, Nautilus had satisfied all conditions precedent to releasing $113-million, which the PNG government had paid into escrow in May, representing the balance of the State’s 15% share of capital required to complete the Solwara 1 offshore project up to first production.

Nautilus reported that the JV transaction would close ten days after MAC had paid the first instalment under the shipbuilding contract, which was required by November 28.

Upon closing, Eda Kopa’s payment to Nautilus would be released from escrow and the Solwara 1 JV would be formed.

The Canadian company aimed to start digging up a seafloor massive sulphide deposit, Solwara 1, about 1 600 m underwater, off PNG, from 2017.

Nautilus planned to use three huge robots, one of which had already been built in Britain and weighed about 310 t. The machines would cut into the seafloor with 4-m-wide claws, break the rock and collect it in a slurry that would be piped to a support vessel.

The remaining water and rock would be sent back down another pipe nearly all the way back to the ocean floor.

Nautilus’ TSX-listed stock on Thursday morning rose 7.69% to C$0.56, having doubled in value since the start of the year.

Edited by Tracy Hancock
Creamer Media Contributing Editor

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