Subsea mining proponent Nautilus Minerals has issued a number of warnings regarding its funding requirements for its offshore PNG project.
In its latest update, the Canadian company reported that it is discussions with a number of parties about potential financial support as it has a some significant payment requirements looking by year end in order to maintain the development of the Solwara 1 Project.
The company aid it requires significant additional funding in order to complete the build and deployment of the seafloor production system to be utilised at the Solwara 1 Project by it and its joint venture partner the PNG Government.
Nautilus said that it needs to obtain new funding of approximately US$41 million prior to the end of 2017 and, in particular, at least approximately US$15 million is required before October 31, 2017 in order to meet its contractual commitments in relation to certain of the equipment forming part of the seafloor production system.
While the company revealed it is in active discussions with various parties, including existing shareholders, regarding potential financing transactions and alternatives, there could be no assurances it 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 engaging specialist advisors and taking various steps aimed at maximizing shareholder value such as undertaking various transactions including, without limitation, asset sales, joint ventures and capital restructurings,” Nautilus stated.
Nautilus Minerals is the first company to commercially explore the seafloor for massive sulphide systems, a potential source of high grade copper, gold, zinc and silver. Nautilus is developing a production system using existing technologies adapted from the offshore oil and gas industry, dredging and mining industries to enable the extraction of these high grade Seafloor Massive Sulphide (“SMS”) systems on a commercial scale.
Nautilus’ copper-gold project, Solwara 1, is under development in the territorial waters of PNG. The company has been granted the Environment Permit and Mining Lease required for resource development at this site.