Nautilus Minerals (TSX: NUS) Advances Sea Floor Mining Project with High Grades of Copper and Gold in New Guinea
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By Dr. Allen Alper
on 2/17/2016
Nautilus Minerals (TSX: NUS) is a pioneer in developing deep-water mining in New Guinea, offering extremely high grades of copper and gold. It is the first company to explore the seafloor, commercially, for massive sulphide systems, a potential source of high grade copper, gold, zinc and silver. Nautilus is developing “disruptive technology” for mining valuable metals economically. A disruptive technology “is one that displaces an established technology and shakes up the industry”. Nautilus is developing a production system adapting technologies, used by the offshore oil and gas industry and dredging and mining industries, to enable the extraction of these high grade Seafloor Massive Sulphide ("SMS") systems on a commercial scale. Three of the world’s largest resource companies are among Nautilus’ significant shareholders. The nature of its alliances and technical partners place it firmly in position as the world leader in deep-water exploration and development of mineral systems.
Michael Johnston, President and CEO of Nautilus Minerals (TSX: NUS), updated investors on the progress his company is making, developing a unique deep sea floor mine in New Guinea. He said, “The company is focused on deep sea floor mining. We don’t look at shallow water dredging operations that are down two or three hundred meters in the photic zone. That is where most of the mining occurs in the oceans at the moment, where they are looking for diamonds and tin and things like that. It is also an important source for gravel, which is used for building, especially in Europe. We focus on much deeper waters, usually 1000 meters and deeper.”
This deep water process is relatively new to the mining sector, though it has been used before. Johnston said, “Those deep waters, when you are working in that environment, offer some certain technical challenges because you have a lot of pressure from the water around you. The oil and gas industry has been active in producing from deep waters during the last forty or fifty years now. So there is a lot of knowledge and technology that has been developed. We listed Nautilus Minerals (TSX: NUS) on the Toronto Stock Exchange in May of 2006 .”
Nautilus Minerals has been working on their flagship Solwara 1 deposit in New Guinea. Johnston said, “We have initially been focused on developing our first mine, which is a deposit in Papua, New Guinea. We drilled the deposit out in 2007 and produced the first NI 43-101 compliant resource for a sea floor massive sulfide system. We then submitted a detailed environmental impact assessment. We were granted an environmental permit in late 2009 and then a mining license in early 2011. Since then we have been designing and building the tools required for the project, and working on the environmental aspects, working with the regulators and key stakeholders, and developing detailed environmental management plans for the project. We are scheduled to be in production at the end of the first quarter of 2018.”
Johnston has a lot of experience he is leveraging for this project. He said, “As for my background, I am a geologist by training. I have been in the mining industry for over thirty years. Prior to working here at Nautilus, I was the general manager for Exploration for Placer Dome in Asia Pacific, responsible for all exploration in the Asia Pacific time zone. Before that I was Technical Services Manager for Placer Dome at the giant Porgera Gold Mine in the highlands of Papua New Guinea. At the time, it was the largest gold mine in the world and by far the richest. We used to move around 210,000 tons per day from the open pit and about 6,000 tons per day from the underground. So, both were very large mines, producing up to 1 and a half million ounces of gold. My job was to make all of that happen properly. Prior to that, I was chief geologist at several smaller companies in Australia and New Zealand.”
In addition to Johnston, the team has a lot of startup experience. Said Johnston, “Our management team consists of Kevin Cain, who is our Project Director. Kevin’s background is in oil and gas and he has delivered a number of offshore projects over the past 30+ years. Originally, he started in the North Sea and then moved to Qatar in the Middle East. He has thirty plus years in delivering these offshore projects. Adam Wright is our VP Operations, and is currently focused on Papua New Guinea. He has a strong background in mine start ups, in PNG, Australia, Africa and Canada. I’ve always considered him to be one of the best mine managers I have ever worked with. John Lowe heads up our small exploration team, and his team focus is on building a resource inventory. Finance is headed up by Shontel Norgate. She has worked in the offshore mining space for around ten years, and has developed a strong understanding of this emerging industry and its nuances.”
The focus of the team is to keep the build and project delivery on track, and on budget. Johnston said, “The other thing that is pretty prevalent in our team and Board is that we have the ability to tackle startups and “disruptive technologies”. Most of us have been there and done that, at various times in our careers, and that includes our board. I think that is a real bonus for us, and something not many small companies in mining can point to.”
Johnston believes one of the benefits of working on the sea floor is that the materials can be accessed easily. He said, “The deposits all sit “proud” on the sea floor. They all outcrop on the sea floor. That is one of the benefits of sea floor mining. We use ROV’s with cameras so we can physically see and measure things right on the floor. It is really unusual for mining projects. It is a bit like when you open up an open pit coal mine after all the surface stuff is stripped off, except we do not have the cost of all that “pre-strip.”
The grades are also much higher than comparable deposits seen on land. Johnston said, “Undersea mining has very high grades. The average grade of copper mined from open pits on land last year was around 0.65% copper. We are seeing average grades of close to 8%. It is an amazingly high grade. As well as the copper grade, there are also high gold grades of over 6 grams per ton. The average grade of an open pit gold mine on land is about 2 grams per ton. The gold grade is three times what it would be on land. These grades are very, very high.. Another key point with sea floor massive sulfide mines is that the foot print is very small compared to what you would see on land. What you get are very high grades of minerals in a small compact area.”
Johnston believes their mining operation is critical for future uses of minerals. He said, “For some key minerals, like copper, 20% of future production could potentially come from the sea floor, given the mineralisation that is already known, and looking at the development of the offshore oil and gas industry as a parallel. Seafloor mining has a much lower environmental footprint and much lower CO2 emissions per tonne of copper produced. Environmentally friendly technology, like electric cars, wind mills, etc need more mined elements. Seafloor mining is a “disruptive technology” and we will need this for a greener economy to “lighten” our environmental footprint. That is one of the key reasons to invest.”
http://www.nautilusminerals.com
Corporate Office
Suite 1702, 141 Adelaide Street West
Toronto, Ontario
Canada M5H 3L5
Telephone: +1
(416) 551-1100 (416) 551-1100
Fax: +1 (416) 703-5246
Email: investor@nautilusminerals.com
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