Sea Discovery

Nautilus Raises Funds to Continue Construction of Seafloor Production System

Image: Nautilus Minerals Nautilus Minerals is to raise approximately CAD$34 million through a private placement of common shares to assist with the continued funding of its Seafloor Production System. The placement will involve the issue of approximately 37.7 million shares to a number of investors at a price of CAD$0.90 per share. Nautilus President and CEO, Steve Rogers, said the private placement would provide funds to continue the build of the company’s Seafloor Production System (the “System”) including key pieces of equipment such as the Seafloor Production Tools and Riser and Lift System. “At the end of June 2012, the major equipment items of the System were 51% complete, and a significant percentage of the sub components have been delivered,” said Mr. Rogers.

Existing Nautilus strategic shareholders, MB Holdings, Metalloinvest and Anglo American, are participating in the private placement. MB Holdings, through its wholly-owned subsidiary Mawarid Offshore Mining Ltd. (“Mawarid”), has subscribed for 20.0 million shares, increasing its stake to 16.9%, Metalloinvest has subscribed for approximately 8.3 million shares to maintain its interest in Nautilus at 21%, and Anglo American has subscribed for approximately 4.4 million shares on the basis that its stake will be maintained at 11.1%. The subscription numbers and post-closing percentage holdings assume the completion of the private placement as planned. Other large investors have subscribed for the remaining 5.0 million shares to be issued.

Mr. Rogers said that there was strong support from the major shareholders for the company to maintain the build program for the System and ensure the realization of deep-sea resource production as an industry. Under the terms of the agreements, the private placement will be completed in two tranches, with the first closing taking place on August 3, 2012. Nautilus has also increased the anti-dilution right previously granted to Mawarid as part of its 2011 subscription to reflect its new percentage ownership in the company. Mawarid has also been granted the right to nominate a director to the board of Nautilus as long as it maintains its ownership interest in Nautilus at 15% or more. Mawarid’s nominee, Dr. Mohamed Al Barwani, is the Chairman of MB Holdings LLC. His appointment will be made effective on closing of the second tranche and receipt of regulatory approval.

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