PAPUA NEW GUINEA - The government of Papua New Guinea has granted the world's first deep sea mining lease to Nautilus Minerals of Toronto for the development of its Solwara 1 project in the Bismarck Sea.
The lease covers an area of approximately 59 km2 surrounding Solwara 1, 50 km north of Rabaul, where the company intends to mine high-grade copper and gold deposits on the seafloor, 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% stake in the 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 mineralized material, including an indicated resource of 870,000 tonnes at grades of 6.8% Cu and 4.8 g/t Au.
Solwara 1 could reach commercial production approximately two and a half years after full project sanction. Nautilus plans to produce at an annual rate of more than 1.3 million tonnes of ore, containing approximately 80,000 tonnes of copper and 150,000 to 200,000 oz of gold. Ongoing deep sea drilling is also expected to lead to expansion of the resource base before the start of production.
A gallery of photos from the Solwara project is available at www.NautilusMinerals.com.