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Nautilus Minerals (LSE:NUS), the world’s first company to explore the seafloor for mining copper, gold, zinc, and silver producing deposits, announced an agreement for the sale of 1.1 million metric tonnes of ore per year to Tongling Non-Ferrous Metals Group Co Ltd.
The Agreement
The agreement is expected to commence with the first delivery of product from Nautilus’ Solwara 1 deposit in the Bismark Sea , near the end of 2013. The deal will run for three years, but it includes an option for an extension to the agreement. Tongling is one of the world’s largest smelters of copper and zinc. It also produces gold concentrates, copper wire and rods, brass and copper sheets and strips, sulphuric acid, and copper and nickel sulphates, in addition to a large variety of related items. Tongling will pay 90% of the price of each shipment upon loading of the carrier vessel in Papua New Guinea. The final 10% will be paid post processing at Tongling’s plants alongside the Yangtze River and will be based on the amount and quality of the recovered copper, gold, and silver less certain processing costs. Pricing will be based on prices set by the London Metal Exchange for copper and the London Bullion Market Association for gold and silver. Nautilus will also gain from a 50/50 split of profits of the sales of by-products from Tongling’s processing, including sulphuric acid and calcine. Nautilus will be issuing bank guarantees to Tongling, not exceeding $11.5 million over nine months, as 50% security for Tongling’s investment in concentrator equipment costs.
Corporate Comments
Stephen Rogers, Nautilus’ CEO:
“The quality of this relationship with China’s largest importer of copper concentrates provides further evidence that there is considerable interest in the high grade massive sulphides being found by the emerging seafloor resource production industry.” “We have now closed the value chain on the project, established our first customer for seafloor massive sulphides and look forward to building a long term relationship with Tongling.”
Company Spotlight
Nautilus Minerals is the first company to explore the seafloor for commercially viable deposits of sulfides deposits as a source of high grade copper, gold, zinc, and silver. It’s first project, Solwara 1 is located off the shores of Papua New Guinea. Future plans include development of similar projects off the shores of Fiji, the Solomon Islands, Vanuata, Tonga, and New Zealand.
References
↑ Reuters
↑ Official Company Information
