Key points
- Teck Cominco paid $15-million (U.S.) to acquire 3 million Nautilus common shares at $5 (U.S.) per share.
- Teck Cominco and Nautilus agreed Teck Cominco may use its $12-million (U.S.) option payment to fund a ship based exploration program in 2008 in designated areas of Papua New Guinea, Tonga and New Zealand.
- The Solwara 1 to 8 projects, a 17,500-square-kilometre Papua New Guinea tenement package, and certain Tonga and Fiji licences applied for before Oct. 20, 2006 remain 100 per cent owned by Nautilus.
- Teck Cominco must commit to the 2008 program by June 30, 2008 or pay Nautilus any shortfall in the $12-million (U.S.) expenditure requirement.
Nautilus Minerals Inc. shareholder, Teck Cominco Ltd., has agreed to exercise, six months early, its share purchase warrants to acquire three million additional common shares of the company at a price of $5 (U.S.) ($5.05 (Canadian), 2.47 pounds sterling) per share for a total of $15-million (U.S.), taking Teck Cominco’s shareholding to approximately 7.2 per cent of the issued shares of the company.
David Heydon, Nautilus’s chief executive officer, commented, “The exercise of these warrants brings to $52-million (U.S.) the funds committed by Teck Cominco to the company following an earlier placement of $25-million (U.S.) and a commitment to pay $12-million (U.S.) as an option to form joint ventures with Nautilus.”
Teck Cominco and Nautilus have today agreed that Teck Cominco may use the $12-million (U.S.) option payment to conduct and manage a ship based exploration program in 2008 in one or more of four designated areas in Papua New Guinea, Tonga and New Zealand. Excluded from the areas are the Solwara 1 to 8 projects, a 17,500-square-kilometre tenement package in Papua New Guinea and exploration licences and applications in Tonga and Fiji applied for before Oct. 20, 2006, which remain 100 per cent owned by Nautilus.
Today’s agreement calls upon Teck Cominco to establish an exploration team to develop and carry out a ship based program in 2008 in the areas, and to commit to that sea-based program by notice to Nautilus by June 30, 2008.
Mr. Heydon added: “Nautilus and Teck Cominco are already working together to co-ordinate plans for a substantial exploration program for the coming year which would involve several vessels operating across our title areas. An accelerated exploration program with an increased budget provides the opportunity to extend our project pipeline.”
If Teck Cominco does not make the commitment for any particular area before June 30, 2008, it will lose the right to form a joint venture with Nautilus in that area and will be restrained from competing with Nautilus until Aug. 31, 2011, in that area. If Teck Cominco does not make a commitment to any of the areas before June 30, 2008, it has agreed to pay Nautilus any shortfall in the $12-million (U.S.) expenditure requirement.
Teck Cominco will not earn an equity interest in any tenements through this $12-million (U.S.) expenditure but, rather will then have the right to select, by Dec. 31, 2008, various countries for a country earn-in. For details of the circumstances under which Teck Cominco can earn an interest in tenements and mineral properties, refer to Nautilus’s website.
Major shareholders
In addition to Teck Cominco, Nautilus, has among its largest shareholders, Epion Holdings Ltd. and Anglo American PLC.
Epion (22.4-per-cent shareholder)
After investing to date a total of $109-million (U.S.), Epion now holds 22.4 per cent of the company’s issued shares. Epion is a company that is wholly owned by the Metalloinvest Group controlled by Alisher Usmanov who is a prominent Russian investor in the mining and metal industries. The Metalloinvest Group is Russia’s largest iron-ore producer and owns several integrated steel operations.
Anglo American (5.7-per-cent shareholder)
Anglo American holds a one-off anti-dilution right on Oct. 31, 2008, entitling it on that date to 11.1 per cent of the company’s issued common shares at a purchase price premium of between 10 per cent and 20 per cent above the volume weighted average trading price of all the common shares traded during the month of October, 2008. For details, refer to Nautilus’s website.
Epion, Anglo American and Teck Cominco have agreed that if a takeover bid is made for Nautilus and recommended by the board, that they will accept the bid or make a higher counteroffer.
