Key points
- Papua New Guinea’s nominee holds a 15 per cent joint-venture interest in the Solwara 1 project.
- Nautilus and its subsidiaries are exploring delayed project spending, bridge financing possibly from a major shareholder secured against company assets, and alternative transactions.
- Failure to secure financing could lead to suspension or termination of the seafloor production system’s development and steps such as asset sales or capital restructuring.
- The seafloor production system’s construction was previously scheduled for initial deployment and testing in the first quarter of 2018, but the company now expects a delay of undetermined length.
NAUTILUS MINERALS PROVIDES UPDATE
Nautilus Minerals Inc., further to its news release dated April 8, 2016, continues to seek and consider various alternative sources of financing in order to maintain the development of the Solwara 1 project and the company’s operations.
As previously disclosed, the company requires significant additional financing in order to complete the build and deployment of the seafloor production system to be utilized at the Solwara 1 project by the company and its joint venture partner (as to 15 per cent), Papua New Guinea’s nominee.
In view of the company’s financing requirements, the company and its operating subsidiaries are currently exploring alternatives for delaying project spending and securing immediate bridge financing to facilitate the time required to secure the significant additional project financing that is needed and/or to explore alternative transactions aimed at maximizing shareholder value. Any such bridge financing may include a loan facility provided by a major shareholder of the company on commercial terms for such a facility with security over certain of the company’s assets.
There can be no assurances that the company will be able to obtain the necessary bridge financing or project financing on acceptable terms or at all. Failure to secure bridge financing and/or project financing may result in the company taking various steps aimed at maximizing shareholder value, including suspending or terminating the development of the seafloor production system and the Solwara 1 project, and engaging in various transactions, including, without limitation, asset sales, joint ventures and capital restructurings. The company’s independent directors will be looking to engage a financial adviser to assist them in this process.
There can be no assurances that any transaction will result from these matters and the company will provide updates as circumstances warrant. Any transaction(s) will be subject to all necessary stock exchange, and, if applicable, shareholder approvals as well as compliance with all other regulatory requirements.
The company previously disclosed that the construction and development of the entire seafloor production system for initial deployment and testing operations at the Solwara 1 project were scheduled to occur during the first quarter of 2018 based on the company’s project timetable and subject to securing additional project financing. However, since, as indicated above, the necessary additional project financing has not been secured, the company now believes that, in the event that the required financing is secured and the company is able to continue development of the Solwara 1 project, the schedule would be delayed, but the company is unable to determine the extent of the delay at this time. The company will provide updates as circumstances warrant.
