Tuesday, May 19, 2009
Solwara 1 Development Project Update
Toronto Ontario, May 19, 2009 - Nautilus Minerals Inc. (TSX & AIM: NUS) (the "Company" or "Nautilus") continues to make significant progress on the development of the Solwara 1 Project in the territorial waters of Papua New Guinea ("PNG") and is pleased to provide the following update.
- Cost reduction and optimisation work progresses
- In parallel, engineering and permitting activities continue
- Operating costs for the offshore production system expected to be in the range 50 - 65 US$/t
- Significant choice exists and lower costs available in today's vessel market
- In discussion with several prospective partners about joining in the Solwara 1 Development
Nautilus' CEO Stephen Rogers commented: "Significant progress has been made in the last quarter as we seek to maximise the opportunities in the current market. We are excited about the vessel options that are available. The project has been markedly enhanced as a result of the cost reduction and optimisation work completed in the last four months and this work continues. In parallel, we have had productive discussions with a number of parties that are interested in participating in Solwara1 development."
Over the last four months, Nautilus has undertaken a commercial review of its Solwara 1 Project to identify potential capital and operating cost savings presented as a result of the current global financial downturn. Furthermore it is progressing, in parallel with engineering design and vessel sourcing, an optimisation program to identify technical improvements to the system which could realise further cost benefits. Significant advances have been made on vessel sourcing and system optimisation.
During this same period, Nautilus has been in discussions with several prospective partners regarding the development of the Bismarck Sea which includes Solwara 1.
Whilst the Solwara 1 cost reduction and optimisation program is ongoing, highlights of the work completed to date are:
- Shipping market enquiries have outlined a number of Mining Support Vessel ("MSV") options that offer significant savings and technical benefits to the project. Vessel evaluations and discussions are progressing with the aim of identifying a short list at the end of Q2 2009;
- In parallel with the vessel enquiry, a more detailed mooring analysis is in progress to further examine the viability of utilising a single pre-set deepwater mooring spread to maintain the MSV on station. Now that the traverse requirements of the Seafloor Mining Tool ("SMT") and the behaviours of the riser system are better understood, a moored vessel may offer benefits over a dynamically positioned vessel;
- Technip Inc has been commissioned to undertake riser optimisation and cost saving analysis. This work will examine riser sizing and equipment sourcing to take advantage of the significant drop in global steel prices. This study is expected to report in Q3 of 2009 albeit savings have already been identified in the work completed to date;
- A trial and testing program is in place with Soil Machine Dynamics to proceed with planned quarry and submerged trials of key cutting and gathering components of the SMT, providing valuable operational input to the final design; and
- Discussions are in progress with GE Hydril to finalise a wear testing program on the Subsea Slurry Lift Pump to better plan maintenance and sparing regimes.
Overall subsea system engineering is currently about 80% complete.
Permitting has progressed with the Mining Lease Wardens Hearing completed (www.nautilusminerals.com/s/Media-NewsReleases.asp?ReportID=344211). An independent review of the Environmental Impact Statement commissioned by the PNG Government is nearing completion.
Market engagement with copper concentrate offtake parties has confirmed a strong interest in Solwara 1 copper concentrate as determined by the metallurgical test program supervised by Minerallurgy Ltd. and completed by Ammtec Laboratories in Perth, Western Australia.
Operating Costs
Operating costs for the offshore production system are expected to be in the range 50 - 65 US$ / dry ton of ore to extract and deliver material into a stockpile at the Port of Rabaul. This is based on a targeted production rate of between 1.2 -- 1.6 million tonnes per annum. Fuel is 10% of this cost based on an oil price of US$60 per barrel assuming that a dynamically positioned vessel is finally selected by Nautilus in preference to the pre-set deepwater mooring spread discussed in 'work highlights' above.
The operating cost guidance is not an economic evaluation or an economic analysis. The current estimate of indicated and inferred mineral resources [870,000 tonnes of indicated mineral resources with 6.8% copper, 4.8 grams per tonne gold, 23 grams per tonne silver and 0.4% zinc and 1,300,000 tonnes of inferred mineral resources with 7.5% copper, 7.2 grams per tonne gold, 37 grams per tonne silver and 0.8% zinc using a 4% copper cut-off grade] does not support a mine life which demonstrates at this time that mining is economically viable. For more information concerning the Company's current mineral resource estimate, please refer to the Company's current Annual Information Form for the year ended December 31, 2008, which can be found under the Company's SEDAR profile at www.sedar.com.
Conference Call Details
A Conference Call and Webcast will be held on Wednesday, May 20, 2009 at 9:00 a.m. EDT (Toronto), 2:00 p.m. BST (London).
Webcast link:
http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=120113&eventID=2230994
Dial-in numbers:
International Dial In: +61 2 8524 6650
Australia: 1800 148 258
Canada: 1 866 837-4489
United Kingdom: 08 000569662
United States of America: 1 866 586-2813
If your country dial-in number is not included here please email nmd@nautilusminerals.com
A presentation to support the conference call will be posted on www.nautilusminerals.com for download by 8:30 a.m. EDT (Toronto) on May 20, 2009.
About Nautilus Minerals Inc.
Nautilus is the first company to commercially explore the ocean floor for gold and copper seafloor massive sulphide deposits and is currently developing its first project. The Company's main focus is the Solwara 1 Project, which is located in the territorial waters of Papua New Guinea in the western Pacific Ocean. Nautilus is listed on the TSX and AIM stock exchanges, and has among its largest shareholders two of the world's leading international resource companies, Teck (6.8%) and Anglo American (11.1%). Metalloinvest, one of the largest and fastest growing mining and metallurgical holding companies in Russia, beneficially owns 21.0% of its shares through Gazmetall Holding (Cypress) Limited.
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This press release includes "forward-looking statements" and "forward-looking information" which include all statements other than statements of historical facts, including, without limitation, those regarding estimated capital costs, estimated operating costs and the rate of potential production and any statements preceded by, followed by, or that include forward-looking terminology such as the words "targets", "believes", "estimates", "expects", "aims", "intends", "will", "can", "may", "anticipates", "would", "should", "could" or similar expressions or the negative thereof. Such forward-looking statements and information involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements and information are based on reasonable assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. The forward-looking statements speak only as at the date of this document. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based, other than as required by applicable securities laws. As a result of these factors, the events described in the forward-looking statements and information in this press release may not occur. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There are many factors that could cause the actual results, performance or achievement of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements or information contained herein, including factors such as the Company not successfully sourcing a Production Support Vessel, the Company not being successful in obtaining all necessary permits and approvals to reach production, the mine life at the Company's Solwara 1 Project being less than the period over which estimated operating costs have been calculated, the Company's continued compliance with regulatory requirements, the sufficiency of current working capital, the estimated cost and availability of funding for the continued exploration of the Company's exploration property, possible variations in ore grade or recovery rates, fluctuating metal prices (such as gold, silver, copper and zinc) and currency exchange rates, the possibility of project cost overruns or unanticipated costs and expenses and general risks of the mining industry, failure of equipment, as well as those risk factors discussed or referred to in the Company's annual Management's Discussion and Analysis and Annual Information Form filed with securities regulatory authorities in Canada and available at www.sedar.com. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. The reader is cautioned not to place undue reliance on forward-looking statements and forward-looking information. The forward-looking statements and forward-looking information contained in this press release is provided for to assist investors in understanding the Company's expected financial and operational performance over the timeframes referenced and may not be appropriate for other purposes.
For more information please refer www.nautilusminerals.com or contact:
Investor Relations
Nautilus Minerals Inc. (Toronto)
Email: investor@nautilusminerals.com
Tel: +1 (416) 551 1100
Australian Project Office
Tel: +61 (7) 3318 5555
Numis Securities Limited
Nominated adviser: John Harrison
Corporate broking: James Black
Tel: + 44(0) 20 7260 1000
Neither the TSX nor the London Stock Exchange accept responsibility for the adequacy or accuracy of this press release. |