Nautilus Minerals says it still faces significant financial and technical uncertainties and may not proceed with its highly controversial Solwara 1 experimental seabed mining operation in Papua New Guinea.
Publicly the Canadian company is very positive about its plans for world’s first seabed mine, claiming it will be ready to start mining in the narrow coastal waters of the Bismarck sea between New Ireland and East New Britain, in 2018.
But a detailed study of company’s 2015 AGM presentation reveals Nautilus does not know if the mine is commercially or technically viable and the company does not have the financial resources to start production.
Nautilus President and CEO Mike Johnston made the presentation titled ‘Forging Ahead’ at the company AGM in June 2015, but didn’t dwell on the fine print in which there are some alarming disclosures;
“the production decision for the Solwara 1 Project was not based on a feasibility study of mineral reserves demonstrating economic and technical viability” as a result “there is increased uncertainty and economic and technical risks of failure associated with this production decision”
That is correct!
Nautilus says there is no study showing the mine is economically or technical feasible!
Yet the PNG government has not only granted a mining licence it has given Nautilus $100 million of taxpayers money!
Perhaps the lack of a feasibility study explains why other investors are running scared and Nautilus is still suffering a dire lack of funding:
“Nautilus requires significant additional funding to advance the Solwara 1 Project towards production. There can be no assurance that the Company will be able to obtain at all or on acceptable terms the remaining financing necessary”
That is right! Nautilus does not know if it will ever have enough money to start mining!
Potential investors will hardly be reassured by Nautilus’s further admission it would be foolish to rely on its predictions for the Solwara 1 mine and it has made numerous assumptions about its ability to achieve its goals:
“We have made numerous assumptions about the material forward-looking statements, including assumptions relating to the future price of copper, gold, silver and zinc; that anticipated costs and expenditures will be as planned; that key components of the seafloor production system will be built on schedule and in accordance with Nautilus’ specifications; and our ability to achieve our goals…, there can be no assurance that the forward-looking statements will prove to be accurate. Accordingly you should not place undue reliance on forward-looking statements.
Downlaod the full AGM presentation [6.5MB] http://www.nautilusminerals.com/IRM/PDF/1562/AGMJune2015final