Patience a virtue for Nautilus

IN A YEAR that began with a takeover hoax and included an arbitration win against the Papua New Guinean government, Nautilus Minerals has had a rocky road towards the world’s first ocean bed copper-gold mine.
Patience a virtue for Nautilus Patience a virtue for Nautilus Patience a virtue for Nautilus Patience a virtue for Nautilus Patience a virtue for Nautilus

But after years of planning, the company plans to finally place an order for a vessel that will separate ore from seawater at the Solwara 1 project in the Bismarck Sea, New Ireland Province.

Initial reports had estimated the order would be placed in the first quarter of next year, with the company obtaining quotes of $180-260 million.

Once again the PNG government appears to be the stumbling block, with the state so far refusing to pay the $US118 million ($A125 million) owed to the explorer following its success in a long-anticipated arbitration case.

The PNG government is a 30% stakeholder of Nautilus' Solwara 1 copper-gold project in the Bismarck Sea but fell behind on payments.

Following a 10-day hearing, arbitrator Murray Gleeson issued an award in Nautilus' favour and ordered the government to pay 30% of all project expenditure incurred to date.

The PNG government was ordered to comply with its obligations under the agreement and complete its purchase in the project. However, despite a deadline of October 23, no resolution has been achieved.

Behind the scenes, Nautilus is ready to place an order for the vessel - as soon as the government pays its share.

CEO Mike Johnston said the company would put a vessel contract in place for the Solwara 1 project as soon as discussions with the PNG government were resolved.

Johnston told PNG Report that he was hopeful of resolving the matter "sooner rather than later".

"It's the vessel which determines the critical path for first ore. Putting in place a vessel contract is still dependent on resolving the dispute with the state.

"It's a chicken and egg type situation which we have always faced.

"As soon as we complete discussions and the agreement with the state, the very next thing we will do is put a vessel contract in place.

"Those discussions are quite advanced. We've been in negotiations and we've done a lot of work around design and contracts.

"We're not sitting on our hands with regards to the vessel but we can't formalise an agreement until we have the state's equity position sorted out.

"We're hoping [the matter will be resolved] sooner rather than later. And I hope the government does as well. We are working with them.

"When we resolve the dispute with the government, we then have to finalise the agreements for the vessel."

Depending on the type of vessel commissioned, ship building will take between 24 and 36 months.

The ship will be about 230m long and 40m wide and capable of accommodating about 150 people, generating 32 megawatts of power and storing about 40,000 tonnes of ore.


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