Key points
- Shares are being sold at C$2.52 (US$2.58) each to a group of investors, including Oman-based Mawarid Mining LLC, which will invest about US$50.1 million for 19.4 million shares, or 9.98% of the expanded share capital.
- Existing strategic shareholders Metalloinvest and Anglo American are subscribing for about 8.2 million and 4.3 million shares respectively to maintain their 21% and 11.1% stakes, with institutional investors taking the remaining seven million shares.
- The placement will close in two tranches, with final closing on October 6, 2011, and Nautilus has agreed to pay a US$1 million finder’s fee subject to regulatory and TSX approval.
- Nautilus’s board has formally sanctioned development of Solwara 1, combining the placement proceeds with US$112 million in cash reserves held at the end of June 2011 and a contribution from joint venture partner Petromin PNG Holdings Limited.
Nautilus Minerals Inc. is to raise approximately $100-million (U.S.) ($98.1-million (Canadian)) through a private placement of common shares to finance the development of its first project, Solwara 1, in the Bismarck Sea of Papua New Guinea.
The placing will involve the issue of approximately 39 million shares to a number of investors at a price of $2.52 (Canadian) ($2.58 (U.S.)) per share.
Nautilus president and chief executive officer Steve Rogers said the private placement would provide finances for the construction of the seafloor resource production system, which initially will be deployed at Solwara 1 — the company’s first deepwater copper and gold project.
The net proceeds of the non-brokered private placement, combined with the $112-million (U.S.) in cash reserves held at the end of June, 2011, and the contribution from joint venture partner Petromin PNG Holdings Limited are expected to be sufficient to finance the development of the offshore component of the mining joint venture excluding contingency and any working capital requirements.
Investors participating in the placing include Mawarid Mining LLC, a subsidiary of MB Holdings Company LLC, an oil and gas, mineral mining and processing group based in Muscat, Oman. It will make an investment of approximately $50.1-million (U.S.) to purchase 19.4 million shares, equivalent to 9.98 per cent of the expanded share capital of the company.
Existing Nautilus strategic shareholders, iron ore producer Metalloinvest and mining group Anglo American, also are participating in the private placement. Metalloinvest has subscribed for approximately 8.2 million shares to maintain its interest in Nautilus at 21 per cent, and Anglo American has subscribed for approximately 4.3 million shares on the basis that its stake will be maintained at 11.1 per cent. Institutional investors have subscribed for the remaining seven million shares to be issued.
Under the terms of the agreements, the private placement will be completed in two tranches, with the final closing taking place on Oct. 6, 2011.
Nautilus has granted an anti-dilution right to the investors that will enable them to maintain their percentage ownership in the shares of Nautilus, as and when and at the price at which any common shares, or securities convertible into or exercisable for common shares, are issued by Nautilus until the earlier of the date of commencement of first production and Feb. 28, 2014.
Nautilus has agreed to pay a finder’s fee of $1-million (U.S.) in cash to arm’s-length parties.
The private placement and payment of the finder’s fee are subject to regulatory approval, including acceptance of the Toronto Stock Exchange. All securities will be subject to the statutory four-month hold period in Canada.
As a result of the financing announced today, the board of Nautilus has formally sanctioned the development of Solwara 1, subject to the closing of the private placement in full.
Steve Rogers said he was pleased to welcome Mawarid Mining, with its strong mining and oil and gas pedigree, as a shareholder of Nautilus and noted the continued support from Metalloinvest and Anglo American.
The MB group employs more than 6,500 employees from 51 nationalities in the oil and gas, manufacturing and mining industries. First established in 1982, the group has operations and subsidiaries spread across the globe, including the Middle East, Europe, North Africa, Asia, Asia-Pacific, Australia and New Zealand. It was the first private sector organization to engage in gold and copper exploration in Oman, where it operates several open pit copper mines and processes ore at its copper concentrate facility in the Al Batinah region.
The MB group is owned by Dr. Mohamed Barwani and his family. Dr. Barwani is a petroleum engineer who has built the business over the past three decades.
“This is a growing organization with expertise in areas that are very relevant to our business. Its decision to participate as a shareholder represents another major vote of confidence in Nautilus and in the emerging seafloor resources industry,” said Mr. Rogers.
