Nautilus Minerals Discovers Five High Grade Copper-zinc Systems

Nautilus Minerals Inc. has discovered five high-grade sea floor massive sulphide (SMS) systems, designated Solwara 12, 13, 14, 16 and 18, during its 2009 exploration campaign. Copper grades up to 32.4 per cent and zinc grades up to 52.6 per cent were reported from grab samples collected from these discoveries using a hand-held X-ray fluorescence (XRF) meter. Final assays on samples collected from Solwara 12 and 13, have also been received, and indicate gold up to 39.7 grams per tonne and silver up to 682 g/t. Additionally, the company has made a further high-grade discovery at Solwara 11 (11i) in the Western Bismarck Sea.

Stephen Rogers, chief executive officer of Nautilus, commented: “Further success in the Bismarck Sea, PNG, combined with good assay results clearly highlights this region as a significant SMS domain. Our work is now focused on the evaluation and ranking of the new systems in preparation for an intensive drilling campaign in 2010.”

The exploration vessel MV Fugro Solstice was successfully demobilized in Singapore on Jan. 12, 2010, after completing a 132-day program of water geochemistry studies, geophysics, remotely operated vehicle (ROV) mapping and ROV sampling. A total of 18 SMS systems have now been defined within the Bismarck Sea, along with numerous zones of hot water venting, smaller chimney fields and barite-rich zones.

Final assay results, including gold (Au) and silver (Ag), on samples collected from Solwara 12 and 13, which were previously reported in Stockwatch Nov. 4, 2009, indicate high precious metal grades, which is consistent with other SMS systems in the Bismarck Sea. Assays up to a maximum of 39.70 g/t Au and 682 g/t Ag were recorded from the 10 sulphide samples collected at Solwara 12, and a maximum of 9.23 g/t Au and 1,550 g/t Ag were recorded from the seven samples collected at Solwara 13.

A further two lower grade systems (Solwara 17 and 19) were also discovered in the Bismarck Sea and one new system (Solwara 15) where samples were not taken due to an ROV breakdown. All three systems will require further investigation. Nautilus considers the presence of hydrothermal mineralization and alteration at these sites encouraging, especially given that the two lower grade systems occur in the older part of the Bismarck Sea. Additional exploration work is planned to test this potential.

Solwara 12 and 13

Solwara 12 and 13 systems occur in the eastern Manus basin, approximately 40 to 60 kilometres north-northwest of Solwara 1. Preliminary XRF results were reported previously. Final assay results are shown in the tables, and highlight the high grade of the samples, particularly with regard to precious metals.

SOLWARA 12 FINAL ASSAY RESULTS

(sulphide samples only)

Sam- Sam- Wei- Au Ag East- North- Dep-

ple ple ght Cu Zn Pb (g/ (g/ ing ing th Lith-

No. type (g) (pct) (pct) (pct) t) t) (2) (2) (2) ology

22561 Chim- 4700 0.006 52.000 3.150 less 451 375817 9590023 -1876 Mass-

ney- than ive

ROV 0.01 sulp-

hide

22562 Chim- 4900 0.101 22.900 2.290 0.63 538 375856 9590023 -1866 Mass-

ney- ive

ROV sulp-

hide

22564 Chim- 5500 0.044 20.900 0.890 0.01 186 375870 9589991 -1910 Mass-

ney- ive

ROV sulp-

hide

22565 Chim- 3900 21.800 3.420 0.095 16.20 313 375849 9590083 -1922 Mass-

ney- ive

ROV sulp-

hide

22566 Chim- 5200 0.530 30.200 2.520 12.05 453 375888 9590088 -1907 Mass-

ney- ive

ROV sulp-

hide

22568 Chim- 5500 0.512 36.100 2.430 39.70 458 375915 9590092 -1899 Mass-

ney- ive

ROV sulp-

hide

22569 Chim- 3700 0.257 17.350 10.400 24.80 682 375949 9590085 -1887 Mass-

ney- ive

ROV sulp-

hide

22570 Chim- 7300 13.400 14.500 0.222 3.70 271 375852 9590082 -1923 Mass-

ney- ive

ROV sulp-

hide

22571 Chim- 4500 32.400 9.900 0.730 5.65 292 375877 9590024 -1901 Mass-

ney- ive

ROV sulp-

hide

22573 Chim- 5200 0.932 18.900 12.700 34.20 601 375961 9590118 -1905 Mass-

ney- ive

ROV sulp-

hide

Minimum 0.006 3.420 0.095 less 186

than

0.01

Maximum 32.400 52.000 12.700 39.70 682

Average 6.998 22.617 3.543 13.69 425

1. Results received from ALS Laboratory

2. Co-ordinates projected as UTM zone 56 south using a WGS 1984 datum

3. Less than 0.01 equals below detection limit

SOLWARA 13 FINAL ASSAY RESULTS

(sulphide samples only)

Sam- Sam- Wei- Au Ag East- North- Dep-

ple ple ght Cu Zn Pb (g/ (g/ ing ing th Lith-

No. type (g) (pct) (pct) (pct) t) t) (2) (2) (2) ology

22574 Chim- 2600 16.450 13.900 0.424 4.35 140 360741 9587443 -2006 Mass-

ney- ive

ROV sulph-

ide

22576 Chim- 3800 0.409 43.900 8.280 1.34 987 360740 9587427 -2002 Mass-

ney- ive

ROV sulph-

ide

22577 Chim- 6500 0.254 52.600 0.897 7.27 631 360766 9587467 -2004 Mass-

ney- ive

ROV sulph-

ide

22578 Chim- 3650 28.000 7.580 0.211 9.23 105 360750 9587449 -2005 Mass-

ney- ive

ROV sulph-

ide

22579 Chim- 6700 0.131 43.400 11.450 0.03 1550 360776 9587466 -2006 Mass-

ney- ive

ROV sulph-

ide

22581 Chim- 1600 13.250 23.700 0.810 6.72 170 360757 9587438 -2001 Mass-

ney- ive

ROV sulph-

ide

22582 Chim- 6000 5.460 30.000 0.794 4.10 241 360759 9587433 -1997 Mass-

ney- ive

ROV sulph-

ide

Minimum 0.131 7.580 0.211 0.03 105

Maximum 28.000 52.600 11.450 9.23 1550

Average 9.136 30.726 3.267 4.72 546

1. Results received from ALS Laboratory

2. Co-ordinates projected as UTM zone 56 south using a WGS 1984 datum

3. Less than 0.01 equals below detection limit

Solwara 14

Solwara 14 occurs approximately two km south-southwest of Solwara 10 on the central Manus spreading centre. The system consists of two subparallel northeast-trending lenses of strong sulphide development, each slightly more than 150 metres in strike. A total of 14 sulphide samples were collected from the two systems, with maximum XRF results of 17.7 per cent Cu and 41.5 per cent Zn.

SOLWARA 14 XRF ANALYSIS RESULTS

(sulphide samples)

XRF (average %(1))

East- North-

Sample Sample Weight ing ing Depth

No. type (g) Cu Zn Pb (2) (2) (2) Lithology

22583 Chimney- 1000 2.4 14.6 less 177326 9633105 -2238 Massive

ROV than sulphide

LOD

22585 Chimney- 2100 1.1 11.4 less 177328 9633098 -2237 Massive

ROV than sulphide

LOD

22586 Chimney- 4620 17.7 5.8 less 177072 9633120 -2244 Massive

ROV than sulphide

LOD

22587 Chimney- 2670 1.7 13.6 less 177390 9633178 -2243 Massive

ROV than sulphide

LOD

22588 Chimney- 3065 2.4 16.1 less 177401 9633220 -2243 Massive

ROV than sulphide

LOD

22590 Chimney- 3245 2.3 18.4 less 177359 9633168 -2246 Massive

ROV than sulphide

LOD

22591 Chimney- 5097 2.4 27.1 less 177337 9633144 -2242 Massive

ROV than sulphide

LOD

22592 Chimney- 3966 1.3 14.5 less 177331 9633122 -2238 Massive

ROV than sulphide

LOD

22594 Chimney- 1102 2.0 30.1 less 177057 9633141 -2242 Massive

ROV than sulphide

LOD

22595 Chimney- 4895 2.7 17.8 less 177063 9633142 -2240 Massive

ROV than sulphide

LOD

22597 Chimney- 6175 16.5 13.9 less 177046 9633088 -2244 Massive

ROV than sulphide

LOD

22598 Chimney- 2870 0.8 27.4 less 177015 9633059 -2247 Massive

ROV than sulphide

LOD

22599 Chimney- 5038 0.7 41.5 less 176995 9633034 -2244 Massive

ROV than sulphide

LOD

22601 Chimney- 5209 1.7 23.7 0.2 177082 9633170 -2248 Massive

ROV sulphide

Minimum 0.7 5.8 less

than

LOD

Maximum 17.7 41.5 0.2

Average 4.0 19.7 0.0

1. Average of 10 analyses per subsample using hand-held XRF(i).

2. Co-ordinates projected as UTM zone 56 south using a WGS 1984 datum

3. Less than LOD equals below detection limit

Solwara 15

Solwara 15 occurs approximately five km south-southwest of Solwara 10 within the central Manus spreading centre. The system consists of a cluster of small, generally northeast-trending/elongated chimney occurrences scattered along about one km of the main spreading ridge axis. No samples were recovered from this occurrence due to operational issues.

Solwara 16

Solwara 16 occurs approximately 20 km SSW of Solwara 10 in the SW portion of the Manus spreading centre. The system consists of sulphide occurrences, algal mats and hydrothermal indicators along an approximate four km northeast strike. Six samples were recovered and recorded maximum XRF results of 5.7 per cent Cu and 24.3 per cent Zn.

SOLWARA 16 XRF RESULTS

(sulphide samples)

XRF (average %(1))

East- North-

Sample Sample Weight ing ing Depth

No. type (g) Cu Zn Pb (2) (2) (2) Lithology

22602 Chimney- 1420 2.1 18.6 less 830088 9619519 -2162 Massive

ROV than sulphide

LOD

22603 Chimney- 894 5.7 20.5 less 830099 9619505 -2147 Massive

ROV than sulphide

LOD

22604 Chimney- 3070 0.9 17.2 less 830124 9619542 -2149 Massive

ROV than sulphide

LOD

22605 Chimney- 2319 1.0 24.3 less 830095 9619634 -2159 Massive

ROV than sulphide

LOD

22607 Chimney- 1276 0.7 23.9 less 829893 9619433 -2163 Massive

ROV than sulphide

LOD

22608 Chimney- 1425 1.8 18.9 less 829946 9619369 -2160 Massive

ROV than sulphide

LOD

Minimum 0.7 17.2 less

than

LOD

Maximum 5.7 24.3 0.1

Average 2.0 20.6 0.0

1. Average of 10 analyses per subsample using hand-held XRF(i).

2. Co-ordinates projected as UTM zone 55 south using a WGS 1984 datum

3. Less than LOD equals below detection limit

Solwara 17

Solwara 17 occurs within the older Willaumez spreading centre approximately 60 km northeast of Solwara 11. The system consists of a 110 m by 60 m zone of oxidized outcropping sulphides and extensive algal mats and hydrothermal oxide coatings in relatively shallow waters (around 450 m). XRF analysis suggests the samples collected from the system outcropping at surface are close to the detection limit of the portable Niton XRF machine.

SOLWARA 17 XRF RESULTS

(sulphide samples)

XRF (average %(1))

East- North-

Sample Sample Weight ing ing Depth

No. type (g) Cu Zn Pb (2) (2) (2) Lithology

22614 Chimney- 587 0.5 0.2 0.8 558688 9664152 -528 Semi-

ROV massive

sulphide

22615 Chimney- 0.5 0.5 0.4 558717 9664138 -535 Semi-

ROV massive

sulphide

22617 Chimney- 781 0.4 less 0.3 558730 9664126 -533 Semi-

ROV than massive

LOD sulphide

Minimum 0.4 less 0.3

than

LOD

Maximum 0.5 0.5 0.8

Average 0.5 0.2 0.5

1. Average of 10 analyses per subsample using hand-held XRF(i).

2. Co-ordinates projected as UTM zone 55 south using a WGS 1984 datum

3. Less than LOD equals below detection limit

Solwara 18

Solwara 18 also occurs within the older Willaumez spreading centre, approximately 20 km north-northeast of Solwara 11. The system consists of east-west elongated chimney clusters scattered over about 80 m of strike, hosted within a broader footprint of hydrothermal indicators. XRF analyses from two samples collected returned values up to a maximum of 1.1 per cent Cu and 14.1 per cent Zn.

SOLWARA 18 XRF RESULTS

(sulphide samples)

XRF (average %(1))

East- North-

Sample Sample Weight ing ing Depth

No. type (g) Cu Zn Pb (2) (2) (2) Lithology

22618 Chimney- 2980 1.1 14.1 0.6 526570 9660001 -1308 Semi-

ROV massive

sulphide

22619 Chimney- 2995 0.8 7.8 0.5 526600 9659998 -1308 Semi-

ROV massive

sulphide

Minimum 0.8 7.8 0.5

Maximum 1.1 14.1 0.6

Average 1.0 10.9 0.6

1. Average of 10 analyses per subsample using hand-held XRF(i).

2. Co-ordinates projected as UTM zone 55 south using a WGS 1984 datum

3. Less than LOD equals below detection limit

Solwara 19

Solwara 19 occurs within the Sherburne Rifts region of the central Bismarck Sea approximately 150 km west-southwest of Solwara 10. The system defined consists of a northerly trending zone of barite chimneys outcropping for approximately 110 m, situated on a mound east-southeast of a large old caldera system. The sample collected did not contain significant base metals under XRF analysis. Analysis for precious metals is pending.

SOLWARA 19 XRF RESULTS

(barite samples)

XRF (average %(1))

East- North-

Sample Sample Weight ing ing Depth

No. type (g) Cu Zn Pb (2) (2) (2) Lithology

22650 Chimney- 1890 0.4 less less 695878 9594555 -1025 Barite-

ROV than than rich

LOD LOD precip-

itate

22651 Chimney- 180 0.4 less less 695891 9594804 -1039 Barite-

ROV than than rich

LOD LOD precip-

itate

Minimum 0.4 less less

than than

LOD LOD

Maximum 0.4 less less

than than

LOD LOD

Average 0.4 0.0 0.0

1. Average of 10 analyses per subsample using hand-held XRF(i).

2. Co-ordinates projected as UTM zone 55 south using a WGS 1984 datum

3. Less than LOD equals below detection limit

Solwara 11i

Solwara 11i occurs as part of the Solwara 11 system, previously found by Teck Resources in 2008, in the Willaumez spreading centre. The Solwara 11 region consists of a minimum of nine known sulphide clusters, with additional outcrops of isolated sulphide, all within a general two km by two km area. The system defined at Solwara 11i consists of a generally east-west-trending zone of sulphide clusters. Maximum values returned from the two samples recovered were 1.2 per cent Cu and 35.4 per cent Zn.

SOLWARA 11I XRF RESULTS

(sulphide samples)

XRF (average %(1))

East- North-

Sample Sample Weight ing ing Depth

No. type (g) Cu Zn Pb (2) (2) (2) Lithology

22622 Chimney- 2150 0.9 35.4 1.2 520503 9650798 -1457 Massive

ROV sulphide

22623 Chimney- 3160 1.2 20.4 0.2 520476 9650740 -1458 Massive

ROV sulphide

Minimum 0.9 20.4 0.3

Maximum 1.2 35.4 1.2

Average 1.0 27.9 0.7

1. Average of 10 analyses per subssample using hand-held XRF(i).

2. Co-ordinates projected as UTM zone 55 south using a WGS 1984 datum

3. Less than LOD equals below detection limit

Future work

The 2009 exploration program generated a large parcel of geophysical and bathymetric data, as well as rock samples and maps which will drive the next round of resource drilling and evaluation in the Bismarck Sea. The results of this work will be reported in the company’s continuing NI 43-101 regulatory filings as and when the finished products become available. Final assay results for base metals and precious metals are pending for all samples other than those collected from Solwara 12 and 13.

Target testing procedure

Sulphide mineralization at the various prospects was observed using a FCV3000 ROV during target testing traverses. The planned traverses were generally a series of parallel lines, nominally 200 or 300 metres apart. When chimney structures are located, using a combination of video and sonar apparatus, that area is mapped in greater detail with the ROV, and samples collected.

Sampling procedure

Grab samples were collected from the sea floor using a manipulator arm mounted on the ROV. Chimney samples averaging 37 kilograms (from five kg to 70 kg) were placed in a separate sample cage for recovery to the ship. They were then processed on board. Subsamples averaging 4.8 kg (from 1.6 kg to 7.3 kg) were taken from each of the sulphide samples using a pneumatic jack hammer, generally taking a cross-section of the sample toward the base of the block. The remaining portions of each sample were retained for reference purposes.

Equipment spread

The mapping work described herein was completed using a Fugro FCV3000 series ROV. The ROV is equipped with sensors used to map the sea floor. These include: various video cameras and two magnetometers provided by Ocean Floor Geophysics Inc. In addition, high-resolution mapping sonars housed on the ROV are being successfully used for the first time to identify real-time sea floor features ahead and to the sides of the ROV beyond the range of the video camera systems used previously.

For sea floor sampling purposes, the ROV is equipped with two manipulator arms and a custom-built sample tray, or geobox, for storing up to 10 hand-sized grab samples or scoop samples. Larger samples are stowed and recovered using a custom-built array of salvage bins.