Even if the PNG Government puts up its share of the funds for the Solwara I project, as Nautilus Minerals’ CEO expects, it will be at least two to three years before the company can begin its deep sea mining operation in the Bismarck Sea.
Earlier this month, Nautilus won a legally-binding ruling that the PNG government pay for its 30% stake in the joint venture Solwara I project and to pay its share of costs to date. As we reported last week, the independent arbitrator ordered the PNG government to pay US$118m (K 303 million) by 23 October 2013.
Nautilus’s CEO, Mike Johnston, reassured an investors conference last week that he is confident the government will pay by the due date.
Johnson said he had met with the new head of Treasury Dairi Vele in Port Moresby last week, and other officials, ‘and didn’t meet with any real resistance. The project is continuing to move forward and we have a lot of support’.
‘The arbitration has basically given clarity to some of the issues which really were issues between the company and the government obviously, but also internally within the government and that clarity makes it very clear what the path forward is for both parties, in my view, we’re both keen to get on with it now,’ he said.
Nautilus is now going ahead with plans to build a special-purpose vessel that will separate ore from seawater.
Johnson says he expects the order to be placed in the first quarter of 2014, but would not be able to give a timeline on exploration until then.
The company has quotes ranging from US$180 million (K 462m) to US$260 million (K 668m) for the ship, according to Chief Financial Officer, Shontel Norgate.
The vessel will take two to three years to build, depending on which shipyard gets the order, she said.
She said Nautilus could fund the cost of the vessel with partners or pay for it alone, which would involve paying 20–30% of the cost through equity and the rest with debt financing.