Tag Archives: Marine Assets Corp

For Nautilus Minerals, the debt comes due

The MV Nor Sky, a vessel chartered in 2008 by Nautilus Minerals to conduct environmental assessment at Solwara I, steams past the Tavurvur volcano near Rabaul.

Andrew Thaler | DSM Observer | December 19, 2018

2018 was supposed to be the year for Nautilus Minerals. Their three seafloor production tools — large underwater robots capable of mining seafloor massive sulphides from 1600 meters depth — were finally in hand and undergoing submerged testing. Their ship, the Nautilus New Era, was nearing completion. They had only a few hurdles left to clear before beginning production at Solwara I, the much-vaunted site of the world’s first deep sea mining operation.

Then the floor dropped out.

Nautilus suffered a body-blow in late-2017, when Japan beat them to the seafloor by mining a sulphide deposit off the coast of Okinawa. Though a small operation, their success effectively undermined Nautilus’s first-mover advantage, at least in the eyes of potential investors. “Japan becomes the first to mine a deep-sea hydrothermal vent” is not the headline Nautilus wanted to read as they advanced towards production at Solwara I.

In December, Marine Assets Corporation defaulted on a payment to the Fujian Mawei shipyard. The chairman of the board resigned in January. MAC defaulted again in July, and the vessel contract was ultimately cancelled. Following the news, Anglo American, one of their minority investors, very publicly divested themselves from the project. CEO Mike Johnson subsequently and abruptly departed the company after 6 years at the helm.

Meanwhile, Sir David Attenborough, arguably the most famous voice in the world, called deep-sea mining at hydrothermal vents “deeply tragic”.

While the company may have hoped for at least a small victory to close out the year—raising substantial funds or negotiating a new lease for the production support vessel—it was not the be. Earlier this month, Ocean Energy Ventures announced that they had acquired the contract for the Nautilus New Era and were no longer in negotiations with Nautilus Minerals to lease the vessel.

Who is Ocean Energy Ventures? Ocean Energy Ventures is a subsidiary of MDL Energy, an offshore service company that provides equipment and services to the energy industry based in India. Though initially in discussion with Nautilus about long-term leases of the vessel, the company reports that “OEV’s dialogue for the charter of the vessel to Nautilus Minerals was terminated on 5th October 2018 and Nautilus have been instructed to remove all of their equipment off the vessel.” This conflicts with a statement from Nautilus that negotiations for a joint venture to acquire the PSV were still ongoing as of December 2, 2018.

OEV is now re-purposing the vessel. The ship, previously dubbed the Nautilus New Era, has been renamed Amaya Explorer.

The final days of 2018 may prove critical for the company’s continued survival. Early this year, they were extended a significant credit line from their major investors, of which they’ve drawn down over $15 million. Nautilus is expected to begin repaying those debts beginning in January 2019. It’s not clear from where revenue for those payments will come nor how much of that debt the government of Papua New Guinea, who owns a 30% stake in the Solwara 1 project, will be liable for.

What this all means for Nautilus is unclear. In the short term, it certainly points towards significant setbacks for the Solwara I project. Without a support vessel, Nautilus will be unable to deploy the three massive machines built to mine seafloor massive sulphides. Production at Solwara I in 2019 seems unlikely. And without a clear pathway to profitability, Nautilus will have trouble attracting new investors just to pay back its loans. At less than $0.04 per share, Nautilus Minerals is trading at the lowest rate since they entered the Toronto Stock Exchange in 2006.

Representatives from Nautilus Minerals declined to comment.

Advertisements

Leave a comment

Filed under Mine construction, Papua New Guinea

Nautilus Minerals Experimental Seabed Mining Vessel Launched

Nautilus Minerals Inc. | March 29, 2018 

Nautilus Minerals announces that its production support vessel was today launched at the Mawei shipyard in China. The vessel will be used by Nautilus and its partner, Eda Kopa (Solwara) Limited at the Solwara 1 Project site, in the Bismarck Sea of Papua New Guinea.

Mike Johnston, Nautilus’ CEO commented at the launch, “Today’s launch is a significant milestone for the Company and the deep water seafloor mining industry. Mawei Yard has designed [see comment below from SeaTech Solutions] and built the world’s first Deep Sea Mining Production Support Vessel, in cooperation with Nautilus and Marine Assets Corporation. This has involved much discussion, thought and innovation, to produce this magnificent vessel. The Yard’s efforts have been truly amazing, and I would like to thank the Management and team at Mawei Shipbuilding for the terrific work that has been done to get the vessel to this stage of completion.”

He further added, “We believe that mining the seafloor for much needed minerals will be a more cost effective and environmentally friendly source of obtaining high grade copper, gold and silver*. Nautilus further differentiates itself from others by having a “first-mover advantage” which is protected by intellectual property and 20 patents. Once our new vessel is delivered, and subject to final funding, mining operations at 1600m water depth is anticipated to commence in late 2019.”

About the vessel

The Production Support Vessel (PSV), which the Company will lease from the owner thereof, provides a stable platform for operations using world-class dynamic positioning technologies to ensure it stays on location at Solwara 1 irrespective of wind and wave conditions. The PSV has been designed for use in offshore construction and seafloor mining industries.

The PSV, as launched today, is approximately 75% complete with the final vessel delivery currently scheduled for March 31, 2019. 

* Please refer to the NI 43-101 technical report dated February 27, 2018 titled “PEA of the Solwara 1 Project, Bismarck Sea, PNG” prepared by AMC Consultants Pty Ltd (AMC) (the “PEA Technical Report”), available at http://www.sedar.com and the Company’s website

4 Comments

Filed under Mine construction, Papua New Guinea

Money hungry Nautilus weighs funding options as project challenges mount

Henry Lazenby | Mining Weekly | 22 December 2017

Marine mining pioneer Nautilus Minerals is in active discussions with a range of potential financiers and shareholders to secure the funding required to start mining the Solwara 1 project, offshore Papua New Guinea (PNG), the company said on Thursday.

The company has thus far been unsuccessful to secure tens of millions of dollars required to keep the project and associated production equipment and support vessel on track to start production in the Bismarck Sea during the first quarter of 2019.

Nautilus said in September that it needs to raise at least $41-million before year end, in order to meet the company’s contractual commitments regarding certain equipment forming part of the seafloor production system.

The Toronto-headquartered company cautioned that there can be no assurances that it will be successful in securing the necessary additional financing transactions within the required time, or at all. In the latter case, the company will evaluate all options to maximise shareholder value.

Meanwhile, Fujian Mawei Shipbuilding, the owner of the shipyard where Nautilus’ production support vessel (PSV) is being built, has notified the company that MAC Goliath, the buyer of the PSV, has failed to pay the third instalment of the contract price of about $18-million, plus accrued interest.

Should MAC fail to make the payment within 21 days from December 11, the shipyard has the right to sell the about 70% completed vessel. Nautilus has the option to remedy the default on behalf of MAC, or replace MAC as a party to the contract via a novation, but given the current funding shortfall, the company has its work cut out.

Nautilus advise that the vessel’s derrick substructure was recently delivered to the shipyard for installation on the PSV. Further, the builder is installing foundations for two of the three launch and recovery systems, the bulk cutter winch has been installed, work on the cargo handling system is progressing, and both the 100 T and 200 T cranes have also been installed.

The company advised in October that submerged trials of the first of the seafloor production tools (SPTs), the collecting machine (CM), have been completed at the trial facility in Motukea IslandPort Moresby, PNG.

The trial results indicated that the machine can perform to design specifications, and the team is now looking at operating enhancements. The auxiliary cutter has also been trialled and will be followed by the bulk cutter.

Nautilus formed a joint venture company with PNG’s nominee, Eda Kopa (Solwara), in December 2014 to mine high-grade polymetallic seafloor massive sulphide deposits. Nautilus has an 85% shareholding and Eda Kopa 15%.

Nautilus in September 2016 announced a revised work programme, pending the company successfully raising the required capital by June this year. It entails a more staged approach, moving the Nautilus equipment integration phase of vessel construction out until after the vessel has been delivered by Fujian Mawei Shipyard and Marine Assets Corporate in the fourth quarter of 2018, resulting in a 12-month delay to the original schedule. 

1 Comment

Filed under Mine construction, Papua New Guinea

Financially crippled Nautilus sees mining ship float

nautilus-ship

Nautilus Minerals Vessel Progress Update

Nautilus Minerals | Marketwired | October 6, 2016

[Cash strapped] Nautilus is pleased to note that the [Marine Assets Corporation] Production Support Vessel (PSV) was floated in the dry dock last week to allow the launch of two adjacent vessels. The PSV is to be used by Nautilus and its PNG partner, Eda Kopa (Solwara) Limited, as the base for its seafloor operations planned at the Solwara 1 Project site, in the Bismarck Sea of Papua New Guinea.

Mike Johnston, Nautilus’ CEO commented

“The Company was very excited to see the PSV floated in the dry dock last week, as it shows the fantastic progress the team at the Fujian Mawei Shipyard Ltd (FMSL) and Marine Assets Corporate (MAC) have made over the past three months. When you consider the first block for the PSV was laid on the 10th of June this year, to having a 220 meter hull able to be floated some 14 weeks later, it is a huge achievement by FMSL and a significant milestone for our Company. We have worked with FMSL, MAC and others on the PSV for over two years now. During this time we have established a very good working relationship, with very capable stakeholders. We are now looking forward to continuing that strong working relationship as we progress the final build phase and fit out of the vessel.”

Subject to further financing, Nautilus’ objective remains to develop the world’s first commercial high grade seafloor copper-gold mine and launch the seafloor resource production industry.

Leave a comment

Filed under Mine construction, Papua New Guinea

Steel cutting marks start of physical construction of Nautilus’ production support vessel

As both local and global opposition continues to mount and the company’s environmental and financial claims are again discredited, Nautilus presses on with ship construction…

Nautilus Minerals | Junior Mining Network

Nautilus announces that the steel cutting ceremony for the Company’s production support vessel occurred on Friday, September 25, 2015. The vessel is to be used by Nautilus and its PNG partner, Eda Kopa (Solwara) Limited, as the base for its seafloor operations planned at the Solwara 1 Project, in the Bismarck Sea of Papua New Guinea.

The ceremony took place at the shipyard of Fujian Mawei Shipbuilding Ltd. It was attended by the General Manager of Fujian Shipbuilding Industry Group Company Limited, Mr Xie Rongxing, the Chairman, Mr Zhang Zhitong, and General Manager, Huang Yihao of Fujian Mawei Shipbuilding Ltd., Senior Vice President of Greater China (ABS), Mr Kwok-Wai Lee, Mr Robin Reeves, CEO of Marine Assets Corporation (MAC) and representatives from the MAC team. MAC will own and provide the marine management of the production support vessel, which will be chartered to Nautilus.

Mike Johnston, Nautilus’ CEO, commented, “I am delighted that steel cutting has happened on schedule and in line with our plan to commence testing and initial production activities at Solwara 1. As we have now moved into the physical construction phase of the vessel, it was important to mark such a significant occasion. We have worked with Fujian Mawei Shipyard, MAC and others on our project for nearly a year now, and have established a very good relationship, which will continue over the coming years. Our objective remains to develop the world’s first commercial high grade seafloor copper-gold project and launch the deep water seafloor resource production industry. With the eyes of the world waiting to see the dawn of this new industry, we look forward to taking delivery of the vessel in December 2017 to enable us to commence our seafloor operations in Q1 2018.”

Leave a comment

Filed under Environmental impact, Financial returns, Human rights, Papua New Guinea

Nautilus Minerals falls victim to cyber scam, prepays $10m into wrong account

duped
Henry Lazenby | Mining Weekly

Canada’s Nautilus Minerals and Dubai-based marine solutions company Marine Assets Corporation (MAC) report having been the victims of a cyber attack, which resulted in Nautilus paying a $10-million deposit intended for MAC into an unknown account.

The deposit was part of an $18-million charterer’s guarantee that was to be provided at the start of a charter of a vessel that would first be deployed for use at the Solwara 1 project, offshore Papua New Guinea.

TSX-listed Nautilus on Monday explained that under the terms of the vessel charter agreement with MAC, it had arranged to pay MAC a $10-million deposit after the shipbuilding contract between MAC and Fujian Mawei Shipbuilding became effective, which was late November last year.

However, in December, Nautilus discovered that an unknown third party had launched a cyber attack on it and MAC, resulting in Nautilus paying the deposit into a bank account it believed to be MAC’s, but which MAC had subsequently advised was not its account.

“The matter was promptly referred to the authorities in the relevant jurisdictions and an investigation is under way. The company has also engaged a cyber-security firm to ensure the ongoing security of its and MAC’s networks, and to investigate the source of the cyber attack. MAC and the company are cooperating with each other and the authorities to facilitate the timely resolution of the investigations,” Nautilus outlined in a statement.

The company had agreed to prepay the $10-million of the charterer’s guarantee on the basis that the balance of the charterer’s guarantee would be paid to MAC once the vessel charter had started. The two parties had also agreed to determine how to proceed regarding the missing deposit after the conclusion of the investigations, which could “take some months”.

Nautilus noted that vessel construction was progressing in the meantime and that all aspects of the Solwara 1 project continued to progress so that its goal of making seafloor mining a reality could be achieved by early 2018.

Leave a comment

Filed under Corruption, Financial returns, Papua New Guinea

No experimental seabad mining before 2018

Computer rendition of Nautilus' floating base.

Computer rendition of Nautilus’ floating base.

Deep-sea miner Nautilus to charter ship as floating base

Cecilia Jamasmie | Mining.com

Canada’s Nautilus Minerals is leading the race to open the first seabed mine as the company announced Thursday it will charter a 227-meter-long (745-foot) ship as a floating base for its operations near Papua New Guinea.

nautilus seafloor productionThe Toronto-based company, which plans to mine copper and gold at its Solwara 1 project, said it will charter the vessel from Dubai-based Marine Assets Corp., which in turn plans to sign a contract with China’s Fujian Mawei Shipbuilding Ltd. to design and construct the vessel.

Following the first payment by Marine Assets under the shipbuilding contract, $113 million will be released to the seabed miner from an escrow account. The amount was placed there by Papua New Guinea as part of the government’s purchase of a 15% stake in the project, located in the Bismarck Sea.

The ship will accommodate as many as 180 people and is expected to be delivered by the end of 2017, Nautilus said.

The Solwara 1 project, located in the minerals-rich Manus basin, was originally slated to begin production late last year, but long-dragged disagreements with the PNG government affected the original timeline.

Nautilus, the first yet not the only one exploring the ocean floor for polymetallic massive sulphide deposits, it still expects Solwara to become the first project commercial deep-sea mining in the world.

Leave a comment

Filed under Mine construction, Papua New Guinea