Tag Archives: Metalloinvest

Failing seabed miner Nautilus Minerals continues on life support

Nautilus Minerals remains in a critical financial state, able to survive only because of another short-term loan from its main shareholders…

Press Release | GlobeNewswire | Business Insider | January 11, 2018

Nautilus Minerals Inc. announces that it continues to arrange bridge loans from Deep Sea Mining Finance Ltd, which are expected to form part of a larger secured structured credit facility of up to US$34 million to be provided by the Lender to the Company.

In conjunction with initial advances under the bridge loans, the Company has issued to the Lender an additional 8,591,065 warrants of the Company, for a total of 11,812,714 share purchase warrants issued to the Lender to date. Each Warrant entitles the Lender to purchase one common share of the Company at a price of C$0.17 for a period of five years from the date of issuance of the Warrant.

The bridge loans, which the Company expects to be in the amount of up to US$7 million, will assist the Company’s immediate working capital requirements and facilitate payments required to continue the development of the Company’s seafloor production system to be first utilized at the Company’s Solwara 1 Project. The loans bear interest at 8% per annum, payable bi-annually in arrears with a one year maturity date.

The Company will be entitled to pre-pay each loan prior to maturity, by paying 108% of the outstanding principal of the loan plus accrued and unpaid interest. Each loan will be represented by a promissory note and will initially be secured against the assets of the Company through a general security agreement. The Lender may subsequently require the loan to be guaranteed by the Company’s material operating subsidiaries and secured against the assets of such subsidiaries.

There can be no assurance that the Company will be successful in concluding the larger credit facility transaction or that any further funding will be secured by the Company.

As previously disclosed, the Lender is a private company owned 50% by each of: (i) USM Finance Ltd, a wholly owned subsidiary of USM Holdings Ltd, an affiliate of Metalloinvest Holding (Cyprus) Limited; and (ii) Mawarid Offshore Mining Ltd., a wholly-owned subsidiary of MB Holding Company LLC. As the Lender is controlled by two insiders of the Company, the Lender is a “related party” of the Company and the loan transaction constitutes a “related party transaction” of the Company under MI 61-101 Protection of Minority Security Holders in Special Transactions. The transactions comprising the bridge loans and the Warrants will be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101.

The Company did not file a material change report more than 21 days before the expected closing of this transaction, as the details of the transaction were not finalized until immediately prior to the closing and the Company wished to close the transaction as soon as practicable for sound business reasons.

The Company 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.

There can be no assurances that the Company will be successful in securing the necessary additional financing transactions within the required time or at all. Failure to secure the necessary financing may result in the Company undergoing various transactions including, without limitation, asset sales, joint ventures and capital restructurings.

The Company will provide further updates as circumstances warrant.

Advertisements

Leave a comment

Filed under Mine construction, Papua New Guinea

K1bn needed for Solwara 1

Cedric Patjole | PNG Loop | October 14, 2017

More than K1 billion in remaining project financing is needed to fund the Solwara 1 Project in New Ireland Province.

Nautilus Minerals Inc. revealed this when announcing the appointment of its exclusive financial advisor – Deep Sea Mining Finance Ltd (DSMF).

In a statement, the Canadian company indicated that a remaining project financing of US$350 million was needed, which DSMF will be leveraging, to complete the build and deployment of the sea oor production system to be utilised at the Solwara 1 Project.

Nautilus said DSMF will seek to leverage the international expertise and financial relationships of Nautilus’ two major shareholders to assist in advancing the development of the project.

Nautilus has stated that there are no assurances that it will secure the necessary additional funding and a failure to do so may result in it undergoing various transactions, which include asset sales, joint ventures and capital restructurings.

DSMF is a newly-incorporated private company in the British Virgin Islands.

Nautilus has also announced that it has terminated a ‘Bridge Financing Agreement’ signed in 2016 with Metalloinvest Holding (Cyprus) Limited and Mawarid Offshore Mining Ltd.

1 Comment

Filed under Mine construction, Papua New Guinea

New international report highlights reputation risk for firms involved in seabed mining

reprisk

ACT NOW!

Business Intelligence group, RepRisk, has released a new report highlighting the environmental, social and governance risks for companies involved in seabed mining and drilling.

RepRisk is a leading international business intelligence provider serving global banks, insurance companies, investment managers and corporates.

In its report, RepRisk, details the many environmental concerns surrounding experimental seabed mining including:

  • Irrevocable damage to marine ecosystems that are already fragile because of overfishing and pollution
  • Release of toxic particles and exposure of species to heavy metals and acids that could enter the food chain
  • Impacts of light on species accustomed only to the dark and of noise in an environment where sound is used for communication
  • Spreading of contamination from mine waste or leaks by ocean currents
  • Reduction of fish stocks affecting coastal communties
  • Loss of complex and diverse ecosystems that could potentially benefit mankind
  • Loos of resources that could provide for the discovery of new medicines

RepRisk also reviews the history of the controversial Solwara 1 experimental seabed mine in Papua New Guinea.

reprisk tableBoth United States mining company Anglo American and Russian giant Metalloinvest have stakes in the mine lease holder, Nautilus Minerals.

RepRisk outlines the strong campaign against the Solwara 1 that involves groups like Greenpeace, Friends of the Earth and ACT NOW! as well as scientist, university professors, church leaders and local communities.

According to RepRisk these groups have all voiced “fierce opposition to the Solwara 1 Project”.

As well as the environmental concerns outlined above which are all relevent to the proposed Solwara 1 mine, RepRisk highlights the concern over the ability of the PNG government to monitor a completely new mining technique.

RepRisk also outlines the concerns of coastal communities that the project will pollute the seawater, cause other environmental damage, and have a negative impact on their livelihoods and food sources, which are dependent on fishing.

The report also highlights the 2012 report that claims the  Solwara’s Environmental Impact Study was seriously flawed, as it failed to correctly identify the risks associated with the project and had underestimated the impacts on local communities.

Download the full report: RepRisk Special Report on Seabed Mining and Drilling 2015 [245kb]

Leave a comment

Filed under Environmental impact, Human rights, Papua New Guinea