Nautilus Reports Solid First Half Results

Nautilus Minerals Inc. achieved a series of important operational milestones in its pioneering sea-floor production project during the first six months of 2011 and ended the period with a healthy cash balance of $112-million (U.S.).

The highlights of the first half were as follows:

In January, the Papua New Guinea government granted Nautilus a mining lease to enable

production at the company’s first development project at Solwara 1 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, 50 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.

In March, the PNG government confirmed its intention to take a 30-per-cent stake

in the Solwara 1 project as a joint venture partner. The government will

contribute funds to the project in proportion to its interest, including

its share of the exploration and development costs incurred to date. The

initial contribution to be made by the government’s nominee, Petromin

PNG Holdings Ltd., will be approximately $24-million (U.S.). The audit of

the final amount has recently been completed with payment to be made in

accordance with detailed project agreements being finalized by the

parties.

In April, the company announced an agreement to form a joint venture

with German shipping company Harren & Partner to own and operate a

production-support vessel which will serve as the operational base for

Nautilus at Solwara 1. Under the terms of the partnership,

Harren will design and construct the vessel at a cost of approximately

127 million euros, with delivery scheduled for the first half of 2013.In May, the company completed a major exploration drilling campaign

in the Bismarck Sea, which has delivered an enhanced understanding of

the Solwara 1 deposit and identified potential subsequent development

sites.

• In January, the Papua New Guinea government granted Nautilus a mining lease to enable

production at the company’s first development project at Solwara 1 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, 50 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.

• In March, the PNG government confirmed its intention to take a 30-per-cent stake

in the Solwara 1 project as a joint venture partner. The government will

contribute funds to the project in proportion to its interest, including

its share of the exploration and development costs incurred to date. The

initial contribution to be made by the government’s nominee, Petromin

PNG Holdings Ltd., will be approximately $24-million (U.S.). The audit of

the final amount has recently been completed with payment to be made in

accordance with detailed project agreements being finalized by the

parties.

• In April, the company announced an agreement to form a joint venture

with German shipping company Harren & Partner to own and operate a

production-support vessel which will serve as the operational base for

Nautilus at Solwara 1. Under the terms of the partnership,

Harren will design and construct the vessel at a cost of approximately

127 million euros, with delivery scheduled for the first half of 2013.

• In May, the company completed a major exploration drilling campaign

in the Bismarck Sea, which has delivered an enhanced understanding of

the Solwara 1 deposit and identified potential subsequent development

sites.

Since the end of the first half, the company has also announced two major advances in exploration:

Nautilus Minerals’ Tongan subsidiary, Tonga Offshore Mining Ltd. (TOML),

became one of the first private-sector organizations to be granted

exploration licences in the highly prospective Clarion Clipperton zone

(CCZ) of the eastern Pacific in July. Sponsored by the Tongan government, TOML was granted approximately 75,000 square kilometres of prime

exploration territory in the CCZ, which lies in international waters

between Hawaii and Mexico. As a result of exploration conducted in the

1980s, the CCZ is known to host hundreds of millions of tonnes of

polymetallic nodules, rich in copper, nickel, manganese and cobalt,

lying on the sea floor in water depths starting at 4,500 metres. The Fijian government this month granted Nautilus 14 special prospecting

licences in its territorial waters, covering a total of approximately

60,000 square kilometres of highly prospective territory. Nautilus is the first

private-sector organization to be granted offshore exploration permits

in Fiji.

• Nautilus Minerals’ Tongan subsidiary, Tonga Offshore Mining Ltd. (TOML),

became one of the first private-sector organizations to be granted

exploration licences in the highly prospective Clarion Clipperton zone

(CCZ) of the eastern Pacific in July. Sponsored by the Tongan government, TOML was granted approximately 75,000 square kilometres of prime

exploration territory in the CCZ, which lies in international waters

between Hawaii and Mexico. As a result of exploration conducted in the

1980s, the CCZ is known to host hundreds of millions of tonnes of

polymetallic nodules, rich in copper, nickel, manganese and cobalt,

lying on the sea floor in water depths starting at 4,500 metres.

• The Fijian government this month granted Nautilus 14 special prospecting

licences in its territorial waters, covering a total of approximately

60,000 square kilometres of highly prospective territory. Nautilus is the first

private-sector organization to be granted offshore exploration permits

in Fiji.

Following the continued extensive investment in the development phase of the Solwara 1 project during the six months to June, the company today announced a first-half loss of $7.98-million (U.S.), which was significantly reduced from $18.75-million (U.S.) in the six months to June, 2010.

The reduction in losses was largely a result of the company capitalizing exploration and evaluation expenditure at Solwara 1 following receipt of the mining lease in January.

The net cash position remained strong at $112-million (U.S.) at the end of the period, following additional investment of $42-million (U.S.) in plant, equipment and mineral properties during the six months.

“Nautilus made excellent progress in the first half of 2011, achieving a number of important milestones,” said chief executive officer Steve Rogers.

“Our financial position remains healthy and strong global commodity prices continue to enhance the business proposition. Significant value has been added over recent months as our exploration programs have yielded encouraging results, and we have gained additional highly prospective exploration territory in Fiji and international waters.

“We look forward to the delivery of components for our sea-floor production equipment and the announcement of a resource update in the second half of the year,” he said.

Conference call

A conference call and webcast will be held on Tuesday, Aug. 16, 2011, at 9 a.m. EDT (Toronto), 2 p.m. BST (London).

Dial-in numbers:

International:  61-2-8524-6650

International:  61-2-8524-6650

Australia:  1-800-148-258

Australia:  1-800-148-258

Canada:  1-866-837-4489

Canada:  1-866-837-4489

United Kingdom:  0800-056-9662

United Kingdom:  0800-056-9662

United States:  1-866-586-2813

United States:  1-866-586-2813

If your country dial-in number is not included here, please e-mail the company.

A presentation to support the conference call will be posted on the company’s website for download by 8:30 a.m. EDT (Toronto) on Tuesday, Aug. 16, 2011.

The financial statements and management’s discussion and analysis have been filed on SEDAR and are also available on the company’s website.