Nautilus Looks to Save Its Deep Sea Mining Project
Nautilus Minerals continues to seek and consider various alternative sources of financing in order to maintain the development of the Solwara 1 Project and the company’s operations.
As previously disclosed, Nautilus requires significant additional funding in order to complete the build and deployment of the seafloor production system to be utilized at the Solwara 1 project by the company and its joint venture partner (as to 15%), the Independent State of Papua New Guinea’s nominee.
In view of the company’s funding requirements, Nautilus and its operating subsidiaries are said to be exploring alternatives for delaying project spending and securing immediate bridge financing to facilitate the time required to secure the significant additional project funding that is needed and/or to explore alternative transactions aimed at maximizing shareholder value. Any such bridge financing may include a loan facility provided by a major shareholder of the company on commercial terms for such a facility with security over certain of the company’s assets.
Nautilus said that there can be no assurances it will be able to obtain the necessary bridge financing or project financing on acceptable terms or at all.
“Failure to secure bridge financing and/or project financing may result in the company taking various steps aimed at maximizing shareholder value, including suspending or terminating the development of the seafloor production system and the Solwara 1 Project, and engaging in various transactions including, without limitation, asset sales, joint ventures and capital restructurings. The company’s independent directors will be looking to engage a financial advisor to assist them in this process,” Nautilus Minerals said in a press release.
The construction and development of the entire seafloor production system for initial deployment and testing operations at the Solwara 1 Project, was scheduled to occur during the first quarter of 2018 based on the Nautilus’ project timetable and subject to securing additional project funding. However, since the necessary additional project funding has not been secured, the company now believes that, in the event that the required funding is secured and the company is able to continue development of the Solwara 1 Project, the schedule would be delayed but Nautilus said it is unable to determine the extent of the delay at this time.