NAUTILUS Minerals announced it has advanced its maiden copper and gold project, Solwara 1, located in offshore Papua New Guinea.

The company said it achieved several milestones recently, including an agreement for the charter of a seafloor production vessel and commencement of commissioning on all three of its seafloor production tools.

In January and February 2015, Nautilus announced that commissioning of its second and third seafloor production tools, the collecting machine and auxiliary cutter, had commenced at Soil Machine Dynamics’ facility at Newcastle upon Tyne in the United Kingdom.

Delivery of the tools is expected to occur at the end of 2015, following that they will undergo “wet testing” sometime in 2016 prior to integration onto the vessel, the company said.

Nautilus entered into an agreement for the charter of a vessel with Marine Assets Corporation, with Fujian Mawei Shipbuilding designing and constructing the vessel for delivery by the end of 2017.

“These developments herald a significant shift for the future of the mining industry as Nautilus moves to establish seafloor mining as the new frontier and a valuable alternative source to satisfy the world’s increasing demand for minerals,” Nautilus said.

Nautilus president and chief executive Mike Johnston said the company was on the tip of starting a new industry.

“Given that 70 per cent of the planet is covered by water and that significant high grade mineral resources have been identified on the ocean floor, the mining industry is prepared to move offshore in much the same way that the oil and gas industry moved offshore 40 – 50 years ago,” he said.

Nautilus said it is the first company to commercially explore the ocean floor for polymetallic seafloor massive sulphide deposits and was granted the first mining lease for such deposits by the Independent State of Papua New Guinea in 2011 for the Solwara 1 deposit.

The Solwara 1 deposit sits on the seafloor at a depth of 1,600 metres and is estimated to conservatively contain 1.02 million tonnes at 7.2% copper, 5.0 grams per tonne of gold, 23 grams per tonne of silver and 0.4% zinc, indicated with 74,000 tonnes contained copper and 165,000 ounces of contained gold in an area 0.1 square kilometres in size.

This compares to copper mines on land where grades average about 0.6% copper leading Mr Johnston to comment that the Solwara 1 deposit is “orders of magnitude higher grade than what you can find on land. There is more known copper on the seafloor than all the reserves on land.”

PNG is a key partner in the project and in December of 2014 it fully funded its 15% interest, amounting to US$120 million for costs to date and formed a joint venture with Nautilus and the State’s nominee Eda Kopa (Solwara), a fully owned subsidiary of Petromin PNG Holdings, Nautilus said.

“We look forward to a close working relationship with the state and the support of Eda Kopa , our joint venture partner on Solwara 1, which will generate economic activity within the state and New Ireland province,” Mr Johnston said.