solwara1map

Project map (Image: Nautilus Minerals)

Nautilus Minerals (NUS.T) has chartered a vessel for the Solwara 1 seafloor mining project in Papua New Guinea. This is a significant milestone for the company and will trigger the release of  $113 million in escrow from joint venture partner Eda Kopa (Papua New Guinea`s state nominee). The ship building will be completed by Fujian Mawei Shipbuilding Ltd out of south-eastern China.

Marine Assets Corp out of Dubai will own and provide support for the vessel. Nautilus has agreed to charter the vessel for a minimum period for 5 years at a rate of $199,910 per day ($364,835,750). After five years Nautilus will have an option to purchase the vessel or extend the contract.

The vessel is expected to be completed before the end of 2017.

The Sowara 1 project has an resource estimate of

  • Indicated Mineral Resource: 1,030kt @ 7.2% Cu, 5.0 g/t Au, 23 g/t Ag, 0.4 % Zn
  • Inferred Mineral Resource: 1,540kt @ 8.1 % Cu, 6.4 g/t Au, 34 g/t Ag, 0.9% Zn

Mike Johnston, Nautilus' CEO, commented "We are excited to achieve this significant milestone and secure a vessel contract with such an experienced vessel provider as MAC. We appreciate the continued support we have received from Eda Kopa, our joint venture partner, in reaching this milestone and, together with them, look forward to working with MAC and the shipyard in seeing the delivery of our first vessel and making seafloor mining a reality".

NUS 3 year chart

Nautilus stock is trading up 7% today at press time, which is understandable as this a major step forward.

This is definitely an interesting story but there aren't many catalysts in the near future to encourage significant share price appreciation.

Vessel construction will take up to 2 years, potentially a long time for investors to wait. The same thing happens when mining companies are building mines: the stock will usually show little movement while the mines are under construction unless commodity prices move one way or the other.

Symbol: NUS.T

Share price: $0.56

Shares outstanding: 445.30 M

Market cap: $249.4 M

Read:  Nautilus enters into Vessel Charter or Mining the seafloor in Papua New Guinea

I have no position in any of the stocks mentioned. This is not investment advice. As always please do your own due diligence.