Name and Location
Solwara 1 seafloor copper/gold project, Papua New Guinea (PNG).

Client
Nautilus Minerals (70%) and the government of PNG (30%).

Project Description
Nautilus Minerals is pioneering the concept of mining the ocean bed for copper, gold, zinc and silver.

The company is exploring for high-grade polymetallic seafloor massive sulphide (SMS) deposits at 1 600 m below the surface of the Bismarck Sea, off the coast of PNG, within the Western Pacific Ocean’s Rim of Fire. The operation is planned to produce ore at a rate of more than 1.3-million tons a year, with the capacity to ultimately ramp up to 1.8-million tons a year of dewatered ore, which will be delivered to the Port of Rabaul.

Net Present Value/Internal Rate of Return
Not stated.

Value
The total capital cost for the system to deliver dewatered ore on board barges to the Port of Rabaul, including a contingency (17.5%), is estimated at $383-million.

The operating cost, excluding the contingency, is estimated at $237 000/d, or about $64/t of mined ore, transported to the port based on a production rate of 1.35-million tons a year. Allowing for a 10% contingency, these operating costs become $261 000/d, or about $70/t.

Duration
The Canadian company aimed to start digging up a massive sulphide seafloor deposit from 2017.

Latest Developments
Nautilus has announced that the $113-million that had been placed into escrow in May, will be released to the company on December 11, on the completion of the sale of 15% of its Solwara 1 project, offshore Papua New Guinea, to Eda Kopa (Solwara), which has been nominated by the State of Papua New Guinea to take up this interest.

Nautilus entered into an agreement with Marine Assets Corporation (MAC) in November for the charter of a vessel to be deployed for use at the Solwara 1 project.

Under the terms of MAC’s agreement with Nautilus, it undertook to sign a contract with Fujian Mawei Shipbuilding for the design and construction of the vessel and to pay the first installment of the purchase price by no later than November 28, 2014.

As this has occurred according to plan, Nautilus can now complete the sale to Eda Kopa.

“We are excited that the shipbuilding contract has been signed for the construction of the vessel and the first installment paid, which now allows for the release of the State nominee's funds from escrow and the formation of the Solwara 1 joint venture,” Nautilus CEO Mike Johnston enthuses.

Key Contracts and Suppliers
Soil Machine Dynamics (construction and supply of two remote-operated SMTs); Technip (engineering, procurement and construction management services for the RALS components of the deep-water Solwara 1 mining and extraction system, comprising subsea pumps, a riser pipe, a riser handling system and associated deck equipment); North Sea Shipping Holding (supply of a specialist MSV); Harren & Partner (supply of a PSV); GE Oil & Gas (supply of a SSLP); SRK Consulting, Ausenco, Clough Engineering and Mineralurgy (offshore production system definition and cost study); Golder Associates (mineral resource estimate); Parsons Brinckerhoff (dewatering study); and Pells Sullivan Meynink (geotechnical laboratory testing programme and on-board ship laboratory, advice on rock mass and material parameters and slope-stability analysis for mining).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Nautilus Minerals investor relations and communications VP Joe Dowling, tel +61 7 3318 5544 or email jjd@nautilusminerals.com.
Soil Machine Dynamics, tel +44 191 234 2222, fax +44 191 234 0444 or email info@smd.co.uk.
Technip, tel +33 1 47 78 24 00.
North Sea Shipping Holding, tel +47 55 08 88 00.
Harren & Partner, tel +49 421 46 86 0 or fax +49 421 46 86 586.
GE Oil & Gas, tel +1 203 373 2211.
SRK Consulting, tel +1 604 681 4196, fax +1 604 687 5532 or email info@srk.com.
Ausenco, tel +675 3256 033 or fax +675 3250 091.
Clough Engineering, tel +61 8 9281 9281, fax +61 8 9281 9943 or email clough@clough.com.au.
Mineralurgy, tel +61 7 3381 9295.