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September 2019

Nautilus Reports Solid 1H Results

Nautilus Minerals Inc achieved a series of important operational milestones in its pioneering seafloor production project during the first six months of 2011, and ended the period with a healthy cash balance of US$112 million.
The highlights of the half-year were as follows:
· In January, the PNG Government granted Nautilus a Mining Lease to enable production at the company’s first development project at Solwara 1, in the Bismarck Sea. The lease provides Nautilus with a 20 year license to mine an area of approximately 59 km2 surrounding Solwara 1, 50 km north of Rabaul, where Nautilus intends to mine high-grade copper and gold deposits on the seafloor, at depths of approximately 1600 metres. (For the full release see Links section below)

· In March, the PNG Government confirmed its intention to take a 30% stake in the Solwara 1 project as a joint venture partner. 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. The initial contribution to be made by the Government’s nominee, Petromin PNG Holdings Limited, will be approximately US$24 million. The audit of the final amount has recently been completed with payment to be made in accordance with detailed project agreements being finalised by the parties.

· In April, the company announced an agreement to form a joint venture with German shipping company Harren & Partner, to own and operate a production support vessel which will serve as the operational base for Nautilus at Solwara 1. Under the terms of the strategic partnership, Harren will design and construct the vessel at a cost of approximately EUR127 million, with delivery scheduled for the first half of 2013.

· And in May, the company completed a major exploration drilling campaign in the Bismarck Sea, which has delivered an enhanced understanding of the Solwara 1 deposit and identified potential subsequent development sites.
Since the end of the first half, the company has also announced two major advances in exploration.

· Nautilus Minerals’ Tongan subsidiary, Tonga Offshore Mining Ltd. (TOML), became one of the first private sector organisations to be granted exploration licences in the highly prospective Clarion Clipperton Zone (CCZ) of the Eastern Pacific in July. Sponsored by the Tongan Government, TOML was granted approximately 75,000 km2 of prime exploration territory in the CCZ, which lies in international waters between Hawaii and Mexico. As a result of exploration conducted in the 1980s, the CCZ is known to host hundreds of millions of tonnes of polymetallic nodules, rich in copper, nickel, manganese and cobalt, lying on the seafloor in water depths starting at 4500 metres.

· The Fijian government this month granted Nautilus 14 special prospecting licences in its territorial waters, covering a total of approximately 60,000 km2 of highly prospective territory. Nautilus is the first private sector organisation to be granted offshore exploration permits in Fiji.

Following the continued extensive investment in the development phase of the Solwara 1 project during the six months to June, the company today announced a first half loss of US$7.98 million, which was significantly reduced from US$18.75 million in the six months to June 2010.
The reduction in losses was largely a result of the company capitalising exploration and evaluation expenditure at Solwara 1 following receipt of the Mining Lease in January.
The net cash position remained strong at US$112 million at the end of the period, following additional investment of US$42 million in plant & equipment and mineral properties during the six months.
“Nautilus made excellent progress in the first half of 2011, achieving a number of important milestones,” said CEO Steve Rogers.

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