Nautilus Minerals Signs Landmark Offtake Agreement for Solwara 1
TORONTO, ONTARIO, Apr 23, 2012 (MARKETWIRE via COMTEX) -- Nautilus Minerals Inc.
("Nautilus" or the "Company") (CA:NUS)(aim:NUS) today announced it has signed a
binding heads of agreement with Tongling Nonferrous Metals Group Co. Ltd
("Tongling") for the sale of the product extracted from the Company's Solwara 1
deposit located in the Bismarck Sea, Papua New Guinea ("PNG").
The agreement provides for the purchase by Tongling of 1.1 million tonnes per
annum (subject to +/- 20% variation) of Solwara 1 material for a period of three
years on a take or pay basis, commencing upon the first delivery of product from
Solwara 1, targeted in Q4 2013 in accordance with a notification mechanism and
includes an option to agree an extension of the arrangement.
"The quality of this relationship with China's largest importer of copper
concentrates provides further evidence that there is considerable interest in the
high grade massive sulphides being found by the emerging seafloor resource
production industry," said Nautilus CEO Stephen Rogers.
The material will be imported into China by Tongling and then processed through
its facilities in the city of Tongling alongside the Yangtze River. After
production of a copper concentrate it will be smelted in Tongling's industrial
complex. The purchase price to be paid by Tongling will be based on the quality
of the copper concentrate produced.
The agreement includes a mechanism for an early payment of 90% of the price upon
loading of the export vessel in PNG. Final payment is based on the recovery of
copper, gold and silver reporting to the copper concentrate with deductions for
capped logistics and processing costs, smelter treatment and refining charges
(TC/RCs), allowances for plant fixed capital recoveries and Tongling's tolling
fee on concentrator plant processing costs. TC/RCs are based on Asian
International benchmarks with a premium payable for the achievement of target
metal recoveries.
The price payable for all metals will be set by the London Metal Exchange (LME)
for copper and London Bullion Market Association (LBMA) for silver and gold with
the initial payment for all metals based on the average of the month preceding
the shipment and final payment on a four month Quotational Period.
Further value may be realised through a 50%/50% profit sharing scheme based on
incremental by-product revenue realised in China, including gold bearing pyrite.
Material from the process can be roasted in China to produce gold and sulphuric
acid and the remaining calcine may be sold to cement manufacturers or as iron ore
fines. With minimal waste Tongling's process brings significant benefits
consistent with Nautilus' commitment to minimise environmental impacts.
The Company will issue a bank guarantee to Tongling in three stages over nine
months, which will not exceed approximately US$11.5 million, as a security for
50% of Tongling's concentrator investment costs commencing at the first order of
major equipment.
Nautilus CEO Stephen Rogers said the Company was looking forward to working with
Tongling to realise the full potential of the high grade material extracted from
Solwara 1. "We have now closed the value chain on the project, established our
first customer for seafloor massive sulphides and look forward to building a long
term relationship with Tongling," he said.
Nautilus is currently progressing the build of equipment, including the Seafloor
Production Tools and Production Support Vessel (as those terms are used in the
Company's Annual Information Form), for the Solwara 1 Project.
About Tongling Nonferrous Metals Group Co. Ltd
Tongling Nonferrous Metals Group Co., Ltd., together with its subsidiaries,
engages in the copper smelting, copper ore mining, processing of copper products
and other related businesses primarily in the People's Republic of China and has
a revenue in excess of US$11.2 billion. They are one of the world's leading
copper and zinc smelting groups. The company produces gold concentrates
containing silver, copper, sulfur, and other elements; iron concentrates; sulfur
fine sand products; single-sulphide, iron ore, and iron pellets; copper cathodes;
copper flat wires; oxygen-free copper rods; phosphor copper anodes; precision
brass sheets and strips; copper sheets and strip classes; lead frame strip
classes; phosphor bronze tins; brass rods; self-adhesive and lubricating cables;
and resistant wires. It also offers sulfuric acid, copper sulfate, and nickel
sulphate. The company was formerly known as Anhui Tongdu Copper Co., Ltd. and
changed its name to Tongling Nonferrous Metals Group Co., Ltd. in September 2007.
Tongling Nonferrous Metals Group Co., Ltd. was founded in 1992 and was listed on
Shenzhen Stock Exchange in 1996. It is headquartered in Tongling City, China.
Tongling Nonferrous Metals Group Co., Ltd. is one of the companies with the most
complete industry chain in China. In 2011, the copper contained in the
self-produced copper concentrate is 48,500 tons, the copper cathodes produced is
854,400 tons, the sulfuric acid produced is 2,067,000 tons, and the gold produced
is 11.15 tons. The core business of Tongling is copper smelting. As of the end of
2011, Tongling has total assets of US$5,117 million, net assets of US$1,814
million, sales revenue of US$11.218 billion and total profits of US$296 million.
Certain of the statements made in this news release may contain forward-looking
statements within the meaning of the United States Securities Exchange Act of
1934 and forward-looking information within the meaning of applicable Canadian
securities law. Forward-looking statements and forward-looking information
include, but are not limited to statements or information with respect to the the
future price of copper, gold and other metals, the estimation of mineral
resources, the realization of mineral resource estimates, the timing and amount
of estimated future production, the fulfilment of the obligations under the
Tongling sales agreement and the timing and suitability of such arrangements, the
Company's financial position, business strategy, plans and objectives of
management for future operations. We have made numerous assumptions about the
material forward-looking statements and information contained herein including
the Company's present and future business strategies, the charter rate for
ore-transport barges, the proposed mine plan and the good faith performance of
the obligations of counterparties pursuant to contracts with the Company. The
Company has also assumed that market fundamentals will result in sustained copper
and gold demand and prices; that the proposed development of its mineral projects
will be viable operationally and economically and proceed as expected; and that
any additional financing needed will be available on reasonable terms. Risks
relating to these assumptions include the over-arching risk that the Company will
not commence production of mineralised material, that future prices of copper,
gold and other metals will be lower than expected; and possible variations in
resources, grade or recovery rates. Please refer to the company's most recently
filed Annual Information Form in respect of other material assumptions and risks
relevant to forward looking information.
Even though our management believes the assumptions made and the expectations
represented by such statements or information are reasonable, there can be no
assurance that the forward-looking statement or information will prove to be
accurate. Forward-looking statements and information by their nature involve
known and unknown risks, uncertainties and other factors which may cause the
actual results to be materially different from any future results expressed or
implied by such forward-looking statements or information. Such risks,
uncertainties and other factors include, among others, the risk that the amount
of metals contained in the company's deposits may differ from estimates of
resources. Should one or more of these risks, uncertainties or other factors
materialize, or should underlying assumptions prove incorrect, actual results may
vary materially from those described in forward-looking statements and
information. Although we have attempted to identify factors that would cause
actual results to differ materially from those described in forward-looking
statements and information, there may be other factors that cause actual results,
performances, achievements or events to not be as anticipated, estimated or
intended. Also, many of the factors are beyond our control. There can be no
assurance that forward-looking statements or information will prove to be
accurate, as actual results and future events could differ materially from those
anticipated in such statements. Accordingly you should not place undue reliance
on forward-looking statements or information. Except as required by law, we do
not expect to update forward-looking statements and information as conditions
change and you are referred to the full discussion of the Company's business
contained in the Company's reports filed with the securities regulatory
authorities in Canada.
About Nautilus Minerals Inc.
Nautilus is the first company to explore the ocean floor for polymetallic
seafloor massive sulphide deposits and is developing its first project at Solwara
1, in the territorial waters of Papua New Guinea, where it is aiming to produce
gold, copper and silver. The company has been granted all necessary environmental
and mining permits.
Nautilus also holds approximately 600,000 km2 of highly prospective exploration
acreage in the western Pacific; in PNG, the Solomon Islands, Fiji, Vanuatu and
Tonga, as well as in international waters in the eastern Pacific.
A Canadian registered company, Nautilus is listed on the TSX and AIM stock
exchanges and has its corporate office in Brisbane, Australia. Its major
shareholders include Metalloinvest, the largest iron ore producer in Europe and
the CIS, which has a 21% holding, and global mining group Anglo American, which
holds an 11% interest.
Neither the TSX nor the London Stock Exchange accepts responsibility for the
adequacy or accuracy of this press release.
Contacts:
Nautilus Minerals Inc. (Toronto)
Investor Relations
+1 (416) 551 1100
investor@nautilusminerals.com
nautilusminerals.com
Numis Securities Limited
Alastair Stratton
Nominated Adviser
+ 44(0) 20 7260 1000
Numis Securities Limited
James Black
Corporate Broking
+ 44(0) 20 7260 1000
SOURCE: Nautilus Minerals Inc.
mailto:investor@nautilusminerals.com
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