Nautilus First Quarter Results

Nautilus Minerals Inc. has made significant progress in the development of its pioneering sea floor resource project at Solwara 1, in the Bismarck Sea of Papua New Guinea (PNG), in the first quarter of 2011.

The highlights of the quarter were as follows:

In January, the PNG government granted

Nautilus the first mining lease in the Pacific region to allow deep-sea resource development in the Bismarck Sea. The lease provides

Nautilus with a 20-year licence to mine an area of approximately 59

square kilometres surrounding Solwara 1, 30 kilometres north of Rabaul, where Nautilus

intends to mine high-grade copper and gold deposits on the sea floor

at depths of approximately 1,600 metres.On March

29, 2011, the PNG government exercised an option to acquire a 30-per-cent

stake in Nautilus’s Solwara 1 project. The state’s share will be held

through Petromin PNG Holdings Ltd., which holds the state’s mining

and petroleum assets. The state’s initial payment to secure its 30-per-cent

holding will be approximately $20-million (U.S.) to $25-million (U.S.), which represents its

share of the exploration and development costs incurred up to the

date of grant of the mining lease in January, 2011. The final amount

will be determined through an audit process, with payment to be made

by Aug. 1, 2011. In the future, Petromin will contribute funds to the

Solwara 1 project in proportion to its ownership interest.During the quarter, an

exploration drilling campaign was conducted in the Bismarck Sea in

PNG with encouraging results. As part of the 2010/2011

drilling program, another potential development project has been

identified at Solwara 12, which is 25 kilometres to the northwest of Solwara

1. The drilling program was completed in May, 2011. Results of the

program are currently being assessed and will be released later this

year.Nautilus completed the quarter with

a strong cash position, holding $139-million in cash and cash

equivalents. Two milestone payments were made for engineering and

construction of sea floor production tools during the quarter, and

additional cash drawdowns were associated with the exploration

campaign.

• In January, the PNG government granted

Nautilus the first mining lease in the Pacific region to allow deep-sea resource development in the Bismarck Sea. The lease provides

Nautilus with a 20-year licence to mine an area of approximately 59

square kilometres surrounding Solwara 1, 30 kilometres north of Rabaul, where Nautilus

intends to mine high-grade copper and gold deposits on the sea floor

at depths of approximately 1,600 metres.

• On March

29, 2011, the PNG government exercised an option to acquire a 30-per-cent

stake in Nautilus’s Solwara 1 project. The state’s share will be held

through Petromin PNG Holdings Ltd., which holds the state’s mining

and petroleum assets. The state’s initial payment to secure its 30-per-cent

holding will be approximately $20-million (U.S.) to $25-million (U.S.), which represents its

share of the exploration and development costs incurred up to the

date of grant of the mining lease in January, 2011. The final amount

will be determined through an audit process, with payment to be made

by Aug. 1, 2011. In the future, Petromin will contribute funds to the

Solwara 1 project in proportion to its ownership interest.

• During the quarter, an

exploration drilling campaign was conducted in the Bismarck Sea in

PNG with encouraging results. As part of the 2010/2011

drilling program, another potential development project has been

identified at Solwara 12, which is 25 kilometres to the northwest of Solwara

1. The drilling program was completed in May, 2011. Results of the

program are currently being assessed and will be released later this

year.

• Nautilus completed the quarter with

a strong cash position, holding $139-million in cash and cash

equivalents. Two milestone payments were made for engineering and

construction of sea floor production tools during the quarter, and

additional cash drawdowns were associated with the exploration

campaign.

Since the end of the quarter, the company has announced the formation of a partnership with a German shipping company, Harren & Partner, to own and operate a production-support vessel (PSV), which will serve as the operational base for Nautilus to extract high-grade copper and gold at the Solwara 1 project.

On May 24, 2011, Nautilus launched a marketed public offering of common shares. The company received a positive response from investors during the marketing of the proposed transaction, but adverse market conditions meant that it was not in the interests of shareholders for the transaction to proceed, and on June 10, 2011, the offering was withdrawn. The company will evaluate a range of alternative options available to it to access capital in the future.

The company’s chief executive officer, Steve Rogers, said the first quarter had seen a number of important milestones achieved for Nautilus: “The granting of the mining lease was a major step forward for us, and we also were very pleased to welcome the PNG government as a partner in this important project. The subsequent formation of the Harren joint venture has secured a state-of-the-art vessel for the project.

“Nautilus has now developed significant momentum. We are looking at alternative capital raising plans and look forward to announcing the results of our exploration campaigns in the coming months,” said Mr. Rogers.

The company has today released its unaudited consolidated financial results for the first quarter ended March 31, 2011, together with its management’s discussion and analysis (MD&A).

The financial statements and MD&A have been filed on SEDAR and are also available on the company’s website.