Global economic crisis reason for delay

Robert Matau


The firm licensed to carry out the first large-scale seabed mineral mining project in the world has put it on hold due to the current global economic crisis.

Nautilus planned deep-sea mining configuration...consisting of a mining vessel, riser and lift system and seafloor mining vehicle.

This means that Papua New Guinea, the nation that has licensed the services of Canada based Nautilus Minerals, may have to wait a bit longer before it realises its dreams of inheriting millions from mining its minerals in its deep-seas.
In December last year, Nautilus announced it was delaying the construction of the equipment for the Solwara 1 mining system in PNG to preserve its strong cash position.
The date they had paraded was late 2010 but now it seems that work could resume as late as the middle of 2011.
Other Pacific nations like the Cook Islands, Fiji and Tonga will be putting their hands up too with minerals found in their seabed areas.
“This decision is driven both by the challenges and opportunities presented by the unprecedented speed and severity of the global economic downturn and the uncertainty in the financial and commodity markets.
“The company will continue to move forward with its Solwara 1 Project, as well as with various engineering and testing activities,” it announced last month.
“In addition, the company will continue with its focused exploration programme to increase its resource base. It remains committed to its objective of developing the world’s first seafloor massive sulphide recovery operation.”
Nautilus CEO, Stephen Rogers, said given the market conditions, its board of directors and management have undertaken a thorough review of all operations.
Directors and management require greater certainty that all elements needed to progress the project to completion are in place before making major equipment expenditures, said Rogers.
Solwara 1 Project is the first full scale deepwater resource extraction project in the world and it is a high grade copper-gold resource that lies in 1600 metres of water.
Nautilus will use waterbed gas equipment to cut materials from the seabed and pump them to the surface as seawater slurry.
In February 18, this year, Nautilus also conducted a survey in Tonga’s Exclusive Economic Zone where it identified 10 new Seafloor Massive Sulphide (“SMS”) systems in Tonga.
Laboratory testing of the 17 massive sulphide samples across the four newly discovered SMS systems returned an average grade of 16.4 grams per tonne (g/t) gold, 8.2 percent copper, 12.3 per cent zinc and 184 g/t silver.
Nautilus Corporate Communications manager Noreen Dillane told ISLANDS BUSINESSS that monetary value for the find varies according to what the metal prices are. “But then you need to apply metal recoveries and actual payable metal (ie what the smelter pays you on).
“These can be significantly less than the quoted market prices. The “final value” is usually significantly less than this value,” she said.
The company currently employs four full time and two casual staff in Tonga.
Nautilus is listed on the TSX and AIM, and has among its largest shareholders two of the world’s leading international resource companies—Teck Cominco (7.2 percent) and Anglo American (11.1 percent. To-date, Nautilus has a total of 365,000 sq km of tenement licence and exploration applications in the region.