Nautilus Minerals has been going through a rough time recently, so rough the company is now claiming to be working in partnership with a ghost, a company that no longer exists.
Nautilus Minerals wants to be the first to mine the seabed, but has been on financial life support since last year, unable to raise the $300 million it needs to complete its preparations for mining. In the meantime it is being kept alive only by a series of short-term loans from its major shareholders.
To make matters worse, in November last year, the company supposed to be supplying the mining support vessel, the key piece of infrastructure for a seabed mining operation, cut off funding for the ship build.
With no money and no ship and forced to close its Papua New Guinea offices, perhaps it is no surprise senior staff have started bailing too. First, Chairman Russell Debney, on December 27 and then President, PNG Operations, Adam Wright.
But even given this alarming state of affairs, industry observers have been shocked to see Nautilus Minerals claiming, in its official Toronto Stock Exchange notices that it is still [12 February] working “closely with its partner Petromin”.
Clearly that statement can’t be true as Petromin is dead, it was extinguished by the Kumul Minerals Holdings Authorization Act of 2015. The Act replaced Petromin with Kumul Minerals Holdings Limited.
How could Nautilus Minerals not know that its partner in the Solwara 1 mine had been abolished by an Act of Parliament and replaced?
Whether a case of ignorance or sloppy management of its stock exchange statements, claiming to be working closely with a ghost is not a good look.
And there is more bad news for Nautilus. Unfortunately, the replacement of Petromin by Kumul Mineral Holdings just further undermines Nautilus’ lack of financial credibility, as Kumul Minerals Holdings is effectively bankrupt.
Kumul Minerals Holdings Annual Return for 2016, reveals a loss for the year of K354.7 million and total liabilities that exceed the total assets by K218.1 million.
This raises the question of whether Nautilus Minerals has informed its shareholders and the stock exchange of its partners financial strife and the ‘material uncertainty‘ it will be able to ‘realise its assets and settle its liabilities‘?
But then again, they are all probably reading this blog anyway!