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Nautilus to Raise $100m to fund Solwara 1 Project

08/31/2011

Nautilus Minerals announced that it will raise approximately $100m through a private placement of common shares to fund the development of its first project, Solwara 1, in the Bismarck Sea of Papua New Guinea.
The placing will involve the issue of approximately 39 million shares to a number of investors at a price $2.58 per share.
Nautilus President and CEO Steve Rogers said the private placement would provide funds for the construction of the seafloor resource production system, which initially will be deployed at Solwara 1 – the company’s first deepwater copper and gold project.
The net proceeds of the non-brokered private placement, combined with the $112m in cash reserves held at the end of June 2011 and the contribution from joint venture partner Petromin PNG Holdings Limited are expected to be sufficient to fund the development of the offshore component of the mining joint venture excluding contingency and any working capital requirements.
Investors participating in the placing include Mawarid Mining LLC, a subsidiary of MB Holdings Company LLC, an oil and gas, mineral mining and processing group based in Muscat, Oman. It will make an investment of approximately $50.1m to purchase 19.4 million shares, equivalent to 9.98% of the expanded share capital of the company.
Existing Nautilus strategic shareholders, iron ore producer Metalloinvest and mining group Anglo American, also are participating in the private placement. Metalloinvest has subscribed for approximately 8.2 million shares to maintain its interest in Nautilus at 21%, and Anglo American has subscribed for approximately 4.3 million shares on the basis that its stake will be maintained at 11.1%. Institutional investors have subscribed for the remaining 7 million shares to be issued.
Under the terms of the agreements, the private placement will be completed in two tranches, with the final closing taking place on 6 October, 2011.
Nautilus has granted an anti-dilution right to the investors that will enable them to maintain their percentage ownership in the shares of Nautilus, as and when and at the price at which any common shares, or securities convertible into or exercisable for common shares, are issued by Nautilus until the earlier of the date of commencement of first production and February 28, 2014.
Nautilus has agreed to pay a finder’s fee of $1m in cash to arm’s length parties.