Name of the Project
Solwara 1 seafloor copper/gold project.

Location
The project is located in the Bismarck Sea of Papua New Guinea (PNG).

Client
Nautilus Minerals and the PNG government.

Project Description
The Solwara 1 project is a deep-sea mining project where construction of a commercial-scale mining operation to extract deep-sea metallic mineral resources is well advanced.

A preliminary economic assessment has determined that the project is economically viable.

The target mineral resources at Solwara 1 are located on the seafloor, about 1 550 m below sea level, and are covered with a thin layer of unconsolidated sediment.

The extraction of 900 000 t of indicated mineral resource grading 6.4% copper and 4.6 g/t gold, and 1.3-million tonnes of inferred resource grading 7% copper and 5.5 g/t gold (undiluted), has been scheduled. There are no mineral reserve estimates for Solwara 1 and the potential viability of the mineral resources has not yet been supported by prefeasibility or feasibility studies.

A peak production rate of about 3 200 t/d is planned. The conceptual plan envisions recovery of an estimated 130 000 t of copper and 180 000 oz of gold from Solwara 1. The plan further envisages the extraction of indicated and inferred mineral resources containing copper and gold at copper grades significantly higher than most terrestrial mines.

The depth and relative competence of the massive sulphide deposit means that it is not amenable to extraction using dredge technology.

Mining equipment has been designed, constructed and tested. The equipment is mobile and is expected to be reusable at future deep-sea mining projects.

Sediment removal, rock cutting, and the transfer of fragmented cuttings to surface are performed by three seafloor production tools and a positive displacement pump, collectively known as the seafloor production equipment. The equipment will be remotely controlled by operators located on board a surface vessel stationed over the deposit.

The production support vessel (PSV) – a hybrid of a mobile offshore drilling unit, a cargo ship and various special purpose ships – will generate power; house the mining crew; provide a platform for the launch, recovery and servicing of the seafloor production tools; and provide a place for dewatering and temporary storage of mineralised material before shipment to offtakers for further processing, smelting and precious metals recovery.

Solwara 1 is scheduled to be in production for 29 months.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a net present value, at a 15% discount rate, of $56-million and an internal rate of return of 28%.

Value
The project is estimated at $530-million.

Duration
The PEA targets first production starting in the third quarter of 2019.

Latest Developments
Nautilus’s PSV was launched on March 30 at the Mawei shipyard, in China. The launch represented a significant milestone for the company, as the PSV is now 75% complete, with the final vessel delivery currently scheduled for March 31, 2019.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Nautilus Minerals, tel +1 416 551 1100 or email investor@nautilusminerals.com.