Nautilus Upgrades and Increases CCZ Mineral Resource to Over 685 Million Tonnes

Nautilus Minerals Inc.’s wholly owned subsidiary, Tonga Offshore Mining Ltd. (TOML), has upgraded its mineral resource estimate for its polymetallic nodule project to include portions in the inferred, indicated and measured categories. This follows on from the successful completion of exploration campaigns in the Clarion-Clipperton fracture zone (CCZ) in the central Pacific Ocean in 2013 and late 2015.

Nautilus’s chief executive officer, Mike Johnston, commented, “It is exciting to announce this increase in the CCZ project’s inferred mineral resource base from 410 million tonnes (wet) to 685 million tonnes (wet), as well the upgrade of an additional 68 Mt (wet) into the indicated category and 2.6 Mt into the measured category.”

The mineral resource includes portions in the inferred, indicated and measured categories, and has been reported in the table. The mineral resource estimate at an abundance cut-off of six wet kilograms/square metre is the selected base-case scenario considering a non-selective bulk mining operation. Mathew Nimmo, independent qualified person for the project, has assessed the available information regarding mining and processing of the polymetallic nodules and concluded that there are reasonable prospects for economic extraction. The effective date for the estimate is March 30, 2016 (being the date when the QP received the nodule sample data from TOML).

MINERAL RESOURCE ESTIMATE

Mineral resource Abundance Mn Ni Cu Co Polymetallic nodules

classification (wet kg/m2) (%) (%) (%) (%) (x106 wet t)(i)

Measured 11.81 27.57 1.33 1.05 0.23 2.6

Indicated 12.19 30.32 1.35 1.18 0.21 68.1

Inferred 11.52 29.05 1.29 1.14 0.20 685.3

(i) Abundance cut-off of six wet kg/square m used. As the nodules

effectively form a single layer on the sea floor, abundance (kg/square m2)

is used to define the mineral resource tonnage. Variations in totals are due

to rounding of individual values manganese, nickel, copper and cobalt assays

on samples dried at 105 C. Moisture content of nodules is estimated at 29

per cent (free water removed after drying at 105 C).

Mr. Johnston also noted: “Our updated mineral resource for the CCZ highlights again the significant potential of sea-floor resources. Technological advances in mining, oil and gas, and maritime technologies over the last 20 years now mean there are reasonable prospects for economic extraction of these massive mineralized systems. At Nautilus, we are both excited and privileged to be leading the development of this significant, currently untapped potential, first with our high-grade Solwara 1 sea-floor massive sulphide (SMS) project and other SMS systems in the southwest Pacific, and now with this updated polymetallic nodule mineral resource in the CCZ.”

Mr. Nimmo has prepared the technical information that forms the basis for this press release. He has completed this work on behalf of TOML and his work has been independently reviewed by AMC Consultants Pty. Ltd. The results set out in this press release will be reported in detail in a technical report prepared in accordance with National Instrument 43-101 and submitted on SEDAR within the next 45 days.

Basis of the mineral resource estimate

The QP for mineral resource estimates is Mr. Nimmo. Mr. Nimmo is a member of the Australian Institute of Geoscientists, an independent consulting geologist, and fulfills the requirements to be a qualified person for the purposes of National Instrument 43-101.

A summary of technical items of interest follows.

Tenure:

All resources are held by TOML, a 100-per-cent-owned subsidiary of

Nautilus. TOML is registered in the Kingdom of Tonga and is subject to

all applicable Tongan mining and civil laws, and Tongan taxes and

royalties.

The resource falls within the six areas within the exploration area

granted to TOML, which covers the exploration for polymetallic nodules

and formalizes the rights of TOML to apply for a contract for

exploitation.

• All resources are held by TOML, a 100-per-cent-owned subsidiary of

Nautilus. TOML is registered in the Kingdom of Tonga and is subject to

all applicable Tongan mining and civil laws, and Tongan taxes and

royalties.

• The resource falls within the six areas within the exploration area

granted to TOML, which covers the exploration for polymetallic nodules

and formalizes the rights of TOML to apply for a contract for

exploitation.

Exploration:

Historic samples were collected by pioneer contractors prior to TOML

acquiring the property (Japanese, French and Russian research

organizations) and provided to TOML and the QP by the International

Seabed Authority.

Box-core and photo-profile data were collected by TOML during its 2015

cruise.

Box-core sampling: Nodules were separated from the mud, washed and

weighed using a motion compensating scale. The nodules were then laid

out on a grid and photographed, and then air dried for 30 to 90 minutes.

Reference and duplicate samples were selected, and all samples placed

into plastic bags and then put into drums. The drums were sealed with

tamper-proof tape.

The sample chain of custody and sample security were maintained. There

was no evidence of tampering of the samples.

Nodule abundance was determined from box core using the weight of the

nodules divided by the area of the box core used. Additional nodule

abundance observations were derived from one in every 100th photo from the

photo-profile lines using the manual long-axis estimation method. The

long-axis estimation method involves measuring every nodule long axis

within the photo and then using this in the equation derived from D. Felix, 1980 “Some problems in making nodule abundance estimates from sea floor photographs,” Marine Mining, Volume 2, No. 3. The parameters in

the equation were calibrated from box-core abundance and the sea-floor

photos at the same location as the box core.

• Historic samples were collected by pioneer contractors prior to TOML

acquiring the property (Japanese, French and Russian research

organizations) and provided to TOML and the QP by the International

Seabed Authority.

• Box-core and photo-profile data were collected by TOML during its 2015

cruise.

• Box-core sampling: Nodules were separated from the mud, washed and

weighed using a motion compensating scale. The nodules were then laid

out on a grid and photographed, and then air dried for 30 to 90 minutes.

Reference and duplicate samples were selected, and all samples placed

into plastic bags and then put into drums. The drums were sealed with

tamper-proof tape.

• The sample chain of custody and sample security were maintained. There

was no evidence of tampering of the samples.

• Nodule abundance was determined from box core using the weight of the

nodules divided by the area of the box core used. Additional nodule

abundance observations were derived from one in every 100th photo from the

photo-profile lines using the manual long-axis estimation method. The

long-axis estimation method involves measuring every nodule long axis

within the photo and then using this in the equation derived from D. Felix, 1980 “Some problems in making nodule abundance estimates from sea floor photographs,” Marine Mining, Volume 2, No. 3. The parameters in

the equation were calibrated from box-core abundance and the sea-floor

photos at the same location as the box core.

Assaying:

Assays were performed at ALS laboratory (Brisbane) and Jacobs

University in Bremen, Germany.

Additional duplicate samples were selected at the ALS laboratory by TOML

during subsampling prior to submission to ALS.

ALS used its chromite/manganese ore-fused disk XRF method to analyze

elements including Mn, Ni, Cu and Co. They also used high-grade four-acid ICP-AES for selected samples.

Jacobs used 0.5M HNO3 ICP-MS and 0.5M HNO3 ICP-MS to analyze selected

samples.

• Assays were performed at ALS laboratory (Brisbane) and Jacobs

University in Bremen, Germany.

• Additional duplicate samples were selected at the ALS laboratory by TOML

during subsampling prior to submission to ALS.

• ALS used its chromite/manganese ore-fused disk XRF method to analyze

elements including Mn, Ni, Cu and Co. They also used high-grade four-acid ICP-AES for selected samples.

• Jacobs used 0.5M HNO3 ICP-MS and 0.5M HNO3 ICP-MS to analyze selected

samples.

Quality control:

There is no duplicate or quality assurance/quality control laboratory data available for the historic

sample results.

There were six groups that sampled the CCZ deposit over various parts

using different sampling and assaying methods. Comparison of the data

between each of the groups shows that the different sampling achieved

similar results over vast areas.

TOML subsampled the box-core samples and collected a random set of 25

duplicate samples for assay by ALS. Comparison of the box-core duplicate

subsamples shows no issues with subsampling or assaying.

TOML also submitted 15 duplicate samples to Jacobs laboratory.

Comparison between Jacobs and ALS shows good agreement for nickel and cobalt, while the Jacobs analyses for Mn show a slight bias low and a slight

bias high for copper.Both ALS and Jacobs also analyzed internal standards (certified

reference material), blanks and duplicates. All analyzed results were

within acceptable limits.

• There is no duplicate or quality assurance/quality control laboratory data available for the historic

sample results.

• There were six groups that sampled the CCZ deposit over various parts

using different sampling and assaying methods. Comparison of the data

between each of the groups shows that the different sampling achieved

similar results over vast areas.

• TOML subsampled the box-core samples and collected a random set of 25

duplicate samples for assay by ALS. Comparison of the box-core duplicate

subsamples shows no issues with subsampling or assaying.

• TOML also submitted 15 duplicate samples to Jacobs laboratory.

Comparison between Jacobs and ALS shows good agreement for nickel and cobalt, while the Jacobs analyses for Mn show a slight bias low and a slight

bias high for copper.

• Both ALS and Jacobs also analyzed internal standards (certified

reference material), blanks and duplicates. All analyzed results were

within acceptable limits.

Resource estimation:

Polymetallic nodules occur on the surface of the sea floor at varying

abundance across the CCZ.

Grades were estimated from sample assays using ordinary block kriging.

Based on the sampling process it was conservatively assumed that the

weights in the abundance measurements reported/collected by pioneer

contractors were wet but there was some uncertainty as it was not

clearly specified by each of the pioneer contractors who collected the

data or the ISA which supplied it.

Based on the reported sample analysis processes, the metal grades were

reported on a dry-weight basis.

Estimate of tonnage was based on area and nodule abundance (wet kg/square m).

Area was used as there was no effective sampling below the immediate

sea floor and mining is only expected to recover nodules from the top 10

centimetres.Abundance was estimated using free-fall-grab (FFG) and box-core

samples, supplemented by estimates derived from photo profiling.

Calculation of abundance from photo profiling using nodule long axis

follows a previously published procedure, confirmed by laboratory

measurements by TOML.

Estimate of inferred mineral resource abundance is likely to be biased

low as most of the historic samples, including FFG samples, were within

the inferred mineral resource area. FFG samples typically underestimate

the abundance of nodules. Correction factors to adjust the likely nodule

abundance bias have not been applied.

Quantitative kriging neighbourhood analysis was performed to check

selected estimation parameters.

• Polymetallic nodules occur on the surface of the sea floor at varying

abundance across the CCZ.

• Grades were estimated from sample assays using ordinary block kriging.
• Based on the sampling process it was conservatively assumed that the

weights in the abundance measurements reported/collected by pioneer

contractors were wet but there was some uncertainty as it was not

clearly specified by each of the pioneer contractors who collected the

data or the ISA which supplied it.

• Based on the reported sample analysis processes, the metal grades were

reported on a dry-weight basis.

• Estimate of tonnage was based on area and nodule abundance (wet kg/square m).

Area was used as there was no effective sampling below the immediate

sea floor and mining is only expected to recover nodules from the top 10

centimetres.

• Abundance was estimated using free-fall-grab (FFG) and box-core

samples, supplemented by estimates derived from photo profiling.

Calculation of abundance from photo profiling using nodule long axis

follows a previously published procedure, confirmed by laboratory

measurements by TOML.

• Estimate of inferred mineral resource abundance is likely to be biased

low as most of the historic samples, including FFG samples, were within

the inferred mineral resource area. FFG samples typically underestimate

the abundance of nodules. Correction factors to adjust the likely nodule

abundance bias have not been applied.

• Quantitative kriging neighbourhood analysis was performed to check

selected estimation parameters.

Mineral resource uncertainty:

The highest uncertainty is in estimating nodule abundance due to the

nature of the spatial distribution of nodules. However, the photo-profile lines demonstrate the continuity in nodule abundance between

sample locations and confirm the range of spatial continuity

(autocorrelation). The variogram range determined from photo profile

percentage nodule coverage is consistent with the range determined from the

wider-spaced samples used in estimating the mineral resource. Multibeam

backscatter survey results cover the entire area in 30 to 60 m resolution

and were used to aid in domaining areas with nodules from areas with

very low or no nodules.

Classification of the mineral resource into measured, indicated and

inferred categories, in accordance with Canadian Institute of Mining,

Metallurgy and Petroleum definitions, considered: the nodule

sample quality, uncertainty in the nodule sample abundance and grades,

continuity of nodule abundance, and grade and scale of the deposit.

Inferred mineral resource classification was based on sampling by

pioneer contractors on a nominal spacing of 20 kilometres, the variation and

uncertainty in the sample quality, and the likely presence of short-range variation to nodule abundance.

Indicated mineral resource classification was based on box-core sampling

by TOML on a nominal spacing of approximately seven km by seven km (including

photo profiling in some cases at seven km by three km), supplemented by sampling

by pioneer contractors.

Measured mineral resource classification was based on box-core sampling

by TOML on a nominal spacing of approximately seven km by seven km plus photo

profiling on a nominal spacing of 3.5 km by three km, supplemented by

sampling by pioneer contractors.

• The highest uncertainty is in estimating nodule abundance due to the

nature of the spatial distribution of nodules. However, the photo-profile lines demonstrate the continuity in nodule abundance between

sample locations and confirm the range of spatial continuity

(autocorrelation). The variogram range determined from photo profile

percentage nodule coverage is consistent with the range determined from the

wider-spaced samples used in estimating the mineral resource. Multibeam

backscatter survey results cover the entire area in 30 to 60 m resolution

and were used to aid in domaining areas with nodules from areas with

very low or no nodules.

• Classification of the mineral resource into measured, indicated and

inferred categories, in accordance with Canadian Institute of Mining,

Metallurgy and Petroleum definitions, considered: the nodule

sample quality, uncertainty in the nodule sample abundance and grades,

continuity of nodule abundance, and grade and scale of the deposit.

• Inferred mineral resource classification was based on sampling by

pioneer contractors on a nominal spacing of 20 kilometres, the variation and

uncertainty in the sample quality, and the likely presence of short-range variation to nodule abundance.

• Indicated mineral resource classification was based on box-core sampling

by TOML on a nominal spacing of approximately seven km by seven km (including

photo profiling in some cases at seven km by three km), supplemented by sampling

by pioneer contractors.

• Measured mineral resource classification was based on box-core sampling

by TOML on a nominal spacing of approximately seven km by seven km plus photo

profiling on a nominal spacing of 3.5 km by three km, supplemented by

sampling by pioneer contractors.

Development:

No development of deep-sea resources has been attempted or demonstrated

other than some historical trial mining.

In the considered opinion of the QP, the mineral resource estimate meets

the requirement of reasonable prospects for economic extraction.

Particular factors of note are:

Seabed and sea conditions in the TOML exploration area are not

materially different from other parts of the CCZ.Nodules have been successfully extracted in trials in the past and

technological advances are likely to make the next attempts much

more efficient; currently there are 12 other parties considering

development.While TOML and Nautilus have not published any economic assessment

for mining sea-floor nodules in the CCZ, others have and they

consider cut-off values in line with those listed in the table.

• No development of deep-sea resources has been attempted or demonstrated

other than some historical trial mining.

• In the considered opinion of the QP, the mineral resource estimate meets

the requirement of reasonable prospects for economic extraction.

Particular factors of note are: Seabed and sea conditions in the TOML exploration area are not

materially different from other parts of the CCZ. Nodules have been successfully extracted in trials in the past and

technological advances are likely to make the next attempts much

more efficient; currently there are 12 other parties considering

development. While TOML and Nautilus have not published any economic assessment

for mining sea-floor nodules in the CCZ, others have and they

consider cut-off values in line with those listed in the table.

• Seabed and sea conditions in the TOML exploration area are not

materially different from other parts of the CCZ.

• Nodules have been successfully extracted in trials in the past and

technological advances are likely to make the next attempts much

more efficient; currently there are 12 other parties considering

development.

• While TOML and Nautilus have not published any economic assessment

for mining sea-floor nodules in the CCZ, others have and they

consider cut-off values in line with those listed in the table.

This mineral resource estimate is based upon and accurately reflects data compiled or supervised by Mr. Nimmo. Mr. Nimmo has sufficient experience that is relevant to the style of mineralization, the type of deposit under consideration and to the activity which he has undertaken to qualify as a competent person as defined in the 2012 edition of the Australasian code for the reporting of exploration results, mineral resources and ore reserves and as a qualified person under National Instrument 43-101.