Key points
- Numis Securities Ltd. will act as nominated adviser and broker for Nautilus’s planned admission to AIM, expected at the end of January 2007.
- The AIM placing aims to raise $100-million (U.S.), which alongside existing cash of approximately $112-million (U.S.) will fund subsea mining equipment, a 1,800-metre riser pipe, and an onshore concentrator plant for Solwara 1.
- Jan De Nul is building the 191-metre mining support vessel Jules Verne under an agreement announced October 4, 2006, and will provide contract mining services to Nautilus.
- Separately, a syndicate led by Salman Partners Inc. will conduct a North American private placement to raise up to $60-million (U.S.), expected to close in the second half of February 2007.
Nautilus Minerals Inc. has entered into an engagement letter with London-based investment bank Numis Securities Ltd. to act as nominated adviser and broker in respect of a proposed admission to trading of its common shares on the Alternative Investment Market (AIM) of the London Stock Exchange PLC early in 2007.
The Numis mandate includes an equity capital raising (the AIM placing) to raise $100-million (U.S.) or such higher amount as may be agreed between Numis and the company by the issue of new common shares contemporaneously with admission which is expected to take place at the end of January, 2007.
The net proceeds of the AIM placing are expected, when taken in conjunction with other anticipated sources of capital, to be sufficient to finance the company through the permitting process and into production at its primary project, Solwara 1, in the territorial waters of Papua New Guinea.
The net proceeds of the AIM placing will be deployed by the company, alongside its existing cash resources of approximately $112-million (U.S.) and other sources of capital, in the detailed design and construction of subsea mining equipment, including two mechanical miners, power umbilicals, pumps, a 1,800-metre riser pipe and related handling equipment, as well as the construction of an onshore concentrator plant and the acquisition of the necessary land on which to build the plant.
The subsea equipment will be connected to and will be serviced by the 191-metre, purpose-built, deep-sea mining vessel Jules Verne that is to be constructed at its own cost by Jan De Nul, one of the world’s leading dredging companies, under an agreement announced by the company on Oct. 4, 2006, in Stockwatch. Jan De Nul will provide contract mining services to Nautilus, including the delivery of mined ore to the onshore concentrator, under the same agreement.
David Heydon, Nautilus chief executive officer, comments: “Numis have followed our progress closely for some time and have witnessed our development from a small private company 12 months ago to a well-capitalized quoted company with a number of the world’s major mining companies as shareholders. This financing will allow us to continue this rapid growth.”
The final terms for the AIM placing will be settled and disclosed in due course and will be subject to the approval of the TSX Venture Exchange.
Numis will receive a 5-per-cent cash commission of the gross proceeds of the AIM placing on closing and broker warrants exercisable in the total for common shares equal in number to 330,000 plus 1 per cent of the number of common shares sold pursuant to the AIM placing.
North American private placement
In a separate announcement and under a separate engagement letter, Nautilus has announced that a syndicate of agents led by Vancouver-based Salman Partners Inc. has been retained by the company to conduct a private equity placing of units consisting of one common share of the company and one-half of one common share purchase warrant as discussed below to raise up to $60-million (U.S.) in North America, immediately subsequent to the AIM placing. Further details of the North American placing are contained in that announcement.
In accordance with applicable Canadian law and TSX Venture Exchange policies, the securities issued under the North American placing and the AIM placing may not be sold or otherwise traded on or through the facilities of the TSX Venture Exchange or otherwise in Canada, or to or for the benefit of a Canadian resident for a four-month period following the closing of the placings. The common shares issued in the AIM placing will be free trading in the United Kingdom immediately following admission. In order to recognize the different positions of placees under the two placings, the placees under the North American placing will receive one-half of one warrant, in addition to each share, which will be exercisable at 130 per cent of the North American placing price at any time within 24 months following the closing of the North American placing.
Neither the North American placing nor the AIM placing is dependent one upon the other and each is an unconnected event, save that the company has agreed that, if gross proceeds of $100-million (U.S.) are raised under the AIM placing and the North American placing closes within 90 days of the AIM placing, the North American placing will not take place at a price below that at which common shares are issued pursuant to the AIM placing.
The company does not intend to use the North American placing to finance its primary project, Solwara 1, into production. The net proceeds of the North American placing will be available to the company to finance further exploration on its other Solwara projects and for further corporate development. The North American placing is expected to close in the second half of February, 2007.
