Key points
- The 20-year lease covers approximately 59 square kilometres around Solwara 1, located 50 km north of Rabaul at depths of about 1,600 metres.
- The PNG government has a one-month option to take up to a 30-per-cent stake in the project as a joint venture partner, contributing costs in proportion to its interest.
- Solwara 1 has a stated resource of 2.2 million tonnes of ore, including an indicated resource of 870,000 tonnes at 6.8 per cent copper and 4.8 grams per tonne gold.
- Nautilus expects production to start about 2-1/2 years after full project sanction, at an annual rate of more than 1.3 million tonnes of ore containing about 80,000 tonnes of copper and 150,000 to 200,000 ounces of gold.
The government of Papua New Guinea has today granted the world’s first deep-sea mining lease to Nautilus Minerals Inc. for the development of its Solwara 1 project in the Bismarck Sea.
The lease covers an area of approximately 59 square kilometres surrounding Solwara 1, 50 km 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.
The mining lease has been granted for an initial 20-year term and the PNG government has retained an option to take up to a 30-per-cent stake in the Solwara 1 project as a joint venture partner. The option is exercisable within one month. If the option is exercised, 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.
Nautilus will now press ahead to conclude its strategic partnering discussions and continue the development of the Solwara 1 deposit, which has a stated resource of 2.2 million tonnes of ore, including an indicated resource of 870,000 tonnes at grades of 6.8 per cent copper and 4.8 grams per tonne gold.
When it commences production, which is expected approximately 2-1/2 years after full project sanction, Nautilus plans to produce ore at an annual rate of more than 1.3 million tonnes, containing approximately 80,000 tonnes of copper and 150,000 to 200,000 ounces of gold. Continuing deep-sea drilling is also expected to lead to expansion of the resource base before the start of production.
Nautilus chief executive officer Stephen Rogers said the granting of the mining lease was an important step for the company and for PNG.
“This historic decision to grant a lease over a deep-sea deposit is a major step forward for this new frontier, and it reflects the fact that the Solwara 1 project is being recognized as an exciting, commercially valuable undertaking,” he said.
“We are grateful to the PNG government for its support and welcome its participation in the project. We look forward to working closely with the government on Solwara 1, which will generate significant investment for the economies of New Ireland, East New Britain and PNG. The successful development of Solwara 1 will pave the way for the expansion of operations to other sea floor deposits in the future, creating an exciting growth industry further benefiting PNG,” he said.
The mining lease gives Nautilus the exclusive right to import and construct required equipment, and to extract, process and sell minerals in accordance with the project development plan submitted by the company and the environmental permit granted by the PNG government in 2009.
