Key points
- Nautilus completed a private placement of 12.5 million shares at $2 per share for gross proceeds of $25-million, with no warrants issued.
- Placer Dome Oceania Ltd. notified Nautilus subsidiary NMC that it wishes to proceed with the joint venture under the October, 2004 farm-in agreement.
- The 40-day program at Solwara 1, in Papua New Guinea’s Bismarck Sea at water depths of approximately 1,600 metres, completed 32 diamond drill holes totaling 381 metres, 287 drill and grab samples, and about 15 tonnes of bulk sample.
- Directors and officers of the company are chairman Geoffrey Loudon, president and CEO David Heydon, and directors David De Witt and Russell Debney.
Nautilus Minerals Inc. will commence trading May 10, 2006, following the completion of a private placement of 12.5 million shares at $2 per share for gross proceeds of $25-million. No warrants were issued as part of this placement.
The directors and officers of the company are Geoffrey Loudon (chairman and director), David Heydon (president, chief executive officer and director), David De Witt (director) and Russell Debney (director).
Mr. Loudon, an experienced geologist and successful entrepreneur, was the chief executive officer and chairman of Niugini Mining, which, in joint venture with Kennecott (Rio Tinto), discovered and developed the Lihir gold deposit in Papua New Guinea. The Lihir deposit has 40 million ounces of gold in reserve and resource; its owner is the NASDAQ stock market listed Lihir Gold Ltd. of which Mr. Loudon is still a director. Mr. DeWitt, a former securities lawyer, is a director of Bear Creek Mining, and a founder and director of Peru Copper. He was previously a director of Arequipa Resources. Mr. Debney is a lawyer and founder of Nautilus Minerals. He spent over a decade as a senior vice-president and director of an offshore oil and gas engineering firm.
Placer Dome agreement
Nautilus subsidiary Nautilus Minerals Corporation Ltd. (NMC) has received notice from Placer Dome Oceania Ltd. that it wishes to proceed with the joint venture contemplated in the farm-in agreement that the parties entered into in October, 2004. Discussions are under way between representatives of NMC and Placer Dome concerning the terms under which the parties will move forward.
Update on drilling and bulk sampling program
Nautilus is pleased to announce the completion of NMC’s drilling and bulk sampling program, with the arrival of bulk samples from the cutting trials to Vancouver, B.C.
Drilling and sampling program
The drilling and sampling program was undertaken by Placer Dome, on the sea floor of NMC’s exploration licence 1196 during January and February of 2006, in water depths of approximately 1,600 metres. The Solwara 1 project (formerly referred to as “Suzette”) is located in the Bismarck Sea within the territorial waters of Papua New Guinea.
The successful program comprised a 40-day cruise during which a total of:
32 diamond drill holes (for 381 metres) were completed;287 drill and grab samples were collected and submitted for assay;approximately 15 tonnes of bulk sample was collected;450 hours of ROV (remote operated vehicle) time was logged, using video and detailed sonar to map the sea floor; andover 3,000 environmental and geological observations were logged as part of NMC’s rapidly developing database of the physical environment.
- 32 diamond drill holes (for 381 metres) were completed;
- 287 drill and grab samples were collected and submitted for assay;
- approximately 15 tonnes of bulk sample was collected;
- 450 hours of ROV (remote operated vehicle) time was logged, using video and detailed sonar to map the sea floor; and
- over 3,000 environmental and geological observations were logged as part of NMC’s rapidly developing database of the physical environment.
Drilling and grab samples have been submitted to ALS Laboratory in Brisbane, Australia, while the bulk sample is being sub-sampled by Placer Dome, and submitted to ALS Chemex in Vancouver for analysis. Placer Dome has not yet advised Nautilus of the results of these analyses.
Bulk sampling
The 15 tonnes of bulk sample were recovered by Placer Dome Technical Services (PDTS) engineers using a pick cutting head situated on a marinised excavator arm attached to a 200 horse-power ROV.
The cutting head specifications, and test program, were designed by PDTS after initial rock hardness testwork completed by the Colorado School of Mines (CSM) on samples recovered from the Placer Dome/NMC 2005 geophysical program. The CSM testwork indicated that the submarine massive sulphide material at Solwara 1 is relatively friable, with rock strengths in the range of 20 to 40 MPa, and should be readily mined by continuous miner picks.
Operation of the cutting unit confirmed the earlier CSM testwork. The material recovered is currently being subsampled to provide representative samples for assaying, and further engineer analysis (sizing, rock properties and density). Bulk metallurgical composites will also be submitted for preliminary testwork.
Drilling
Coring operations were performed by Seacore, an English-based company, and a recognized expert in deep-sea core drilling. Due to the friable nature of the sulphide material, core recoveries were low, averaging 40 per cent. The recovered core has been subsampled, and submitted by Placer Dome to ALS Brisbane for analysis. A review of drilling performance has indicated that a suitably engineered, ROV mounted carrousel rig would probably handle the friable sulphide material better than conventional wire-line drilling, as was used in the recent program. An ROV drill deployed on the seafloor may avoid the disturbance of the core/sample from the movement of the 1,600 metres of drill string required for the ship-based drilling system deployed on the Placer Dome program.
Mr. Heydon said: “The drilling and sampling program has been a world first, successfully sampling submarine massive sulphide deposits with a view to their eventual commercial extraction. The PDTS cutting trials have shown that these submarine sulphide deposits can be disaggregated and recovered on the ocean floor, using existing cutting heads and technology. When we have the results of the land-based engineering studies and assays from Placer Dome, we will input this data into our design work and business plan, and advise the market accordingly.
“The friable nature of the sulphide material, whilst making for relatively easy cutting, did present core recovery issues for the drilling program. The drilling and sampling program did however recover copper sulphide material and this has been subsampled. Placer Dome has not yet advised Nautilus of the results of these analyses.
“As well as the drilling and sampling, the cruise allowed us to collect a significant body of data about the physical environment, fauna, and ecosystems present in the area of interest. This data is currently being compiled, interpreted, combined with our existing database obtained from earlier marine scientific research cruises, and will form the basis of our on going environmental work.” Mr. Heydon says that the company is progressing its innovative exploration and environmental base line studies under the banner of “New Vision — New World — New Resources” in collaboration with members of the international scientific community.
Information in this news release relating to mineralization for the Solwara 1 project is based on information compiled by a qualified person as defined in NI 43-101, being Mr. Heydon (BSc geology), MAusIMM), the company’s president and chief executive officer.
