Key points
- The Solwara joint venture covers 17,500 square kilometres of exploration licences in Papua New Guinea’s territorial waters plus an exploration agreement spanning 17 West Pacific countries.
- Barrick, through subsidiary Placer Dome, has spent over $12.2-million (U.S.) in project expenditures under its farm-in agreement with Nautilus Minerals Nuigini Ltd.
- Nautilus will issue Barrick a special warrant that converts into 4,783,163 common shares on Sept. 11, 2006, subject to TSX Venture Exchange approval.
- Barrick has agreed to five-year non-competition terms and to transfer exploration data, equipment and staff, including a trial ocean-floor cutting machine, to Nautilus.
Nautilus Minerals Inc. has entered into an agreement with Barrick Gold Corp. whereby Barrick will convert its interest in the Papua New Guinea (Solwara) joint venture into a 9.59-per-cent stake in the company.
The Solwara joint venture comprises exploration licences in the territorial waters of Papua New Guinea covering 17,500 square kilometres and an exploration agreement covering 17 countries throughout the West Pacific. It is focused on the assessment of gold-copper-zinc-silver massive sulphide mineralization on the ocean floor. A total of 48 ocean-floor sulphide samples collected by Placer Dome Oceania Ltd. in the 2005 and 2006 field programs over Solwara 1 were calculated by Nautilus to average 15.5 grams per tonne gold and 10.8 per cent copper.
Barrick, through it subsidiary Placer Dome, has spent over $12.2-million (U.S.) in project expenditures under the farm-in agreement with Nautilus’s subsidiary, Nautilus Minerals Nuigini Ltd. (NMNL). Nautilus has agreed, subject to the prior receipt of approval from the TSX Venture Exchange, to issue to Barrick on closing a special warrant that will automatically convert into 4,783,163 common shares of Nautilus on Sept. 11, 2006.
President and chief executive officer David Heydon says: “This agreement with Barrick transfers all of Placer Dome’s expertise, intellectual property, know-how, key consultants and relevant business relationships to Nautilus, allowing Nautilus to manage and operate the project, and determine the development timeline and scale that maximizes value to Nautilus shareholders. Importantly, it also gives Nautilus a 100-per-cent interest in any future gold production from the project. Nautilus is now well positioned to expedite the work on the project using the proceeds from its $25-million financing that closed in May, 2006.”
Mr. Heydon says he look forward to having Barrick, a leading international gold mining company, as a significant shareholder.
Alex Davidson, Barrick’s executive vice president of exploration and corporate development, said, “We are pleased to have a significant equity stake in Nautilus so that we can participate in the future upside of this project.”
Under the agreement, affiliates of Barrick will transfer all their right, title and interest in the exploration data, engineering data, software and equipment, including a trial ocean-floor cutting machine and an airlift-riser test rig, to Nautilus. Barrick will release all contractors, consultants and relevant staff so they can work with Nautilus directly. As reported in Stockwatch on May 15, 2006, Nautilus has already employed three ex-Placer Dome managers, which will facilitate a smooth transition of the project. On closing, the Solwara joint venture will terminate and Placer Dome will transfer all its interests in the tenements to NMNL.
To preserve Nautilus’s first-mover advantage of commercial ocean-floor sulphide exploration, Barrick has agreed to certain non-competition terms for a period of five years. Barrick has also agreed that, if a takeover bid is made for Nautilus that is recommended by the directors, it will either accept the bid or within 21 days, acting in a bona fide manner, announce its intention to make its own bid for the outstanding shares of Nautilus. Furthermore, if Barrick wishes to sell the shares to a third party, other than through the facilities of a stock exchange, it will provide Nautilus with a 28-day prior notice of intention to sell and agrees to sell to a third party introduced by Nautilus in that time frame on the same terms. The shares issuable to Barrick under the special warrant shall be subject to a statutory four-month hold period from the date of issue, being the closing date of the transaction.
