Nautilus CEO sees end to Papua dispute soon

Thu Jun 21, 2012 5:14pm EDT
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By Julie Gordon

TORONTO (Reuters) - Nautilus Minerals Inc (NUS.TO: Quote) expects to resolve an ownership dispute with Papua New Guinea over its Solwara 1 underwater mine after the country's national elections, which start on Saturday and run for two weeks, the company's chief said on Thursday.

Nautilus says it also expects to have a financing plan in place within the next month to fund construction of the project's support vessel after the miner's European partner scaled back its investment in the ship, which will be the operations base for the seafloor mining project.

Once the ownership and financing issues have been resolved, the copper and gold project will move forward, CEO Stephen Rogers told Reuters, noting that construction of the underwater mining infrastructure is progressing on schedule.

"We're not anticipating huge delays here," he said. "We're not talking a year or anything like that. It's going to be months."

Solwara 1 is located in the Bismarck Sea in Papua New Guinea's territorial waters, and is the world's first underwater copper-gold mine. It was originally expected to start production in late 2013.

Last year the Papua New Guinea government exercised an option to acquire 30 percent of the project, but earlier this month, Nautilus warned that it could scrap Solwara 1 unless a dispute with the government over development costs is resolved.

Rogers said on Thursday the project would go ahead, though he declined to set an exact timetable for its start-up, saying it would be clearer once the vessel's financing is in place and the ownership conflict is resolved.

"Our mining leases and permits are not at risk. That's not what's being threatened here," he said. "This is a commercial issue."   Continued...