Canada-based Nautilus Minerals Inc. (TSX:NUS)(OTCQX:NUSMF)(AIM:NUS) said Friday it is in dispute with Papua New Guinea as to the parties' obligations to complete the agreement reached in March last year for its Solwara 1 copper project.
The company, the first to explore the ocean floor for polymetallic seafloor massive sulphide deposits, warned Solwara 1 copper project could be delayed or cancelled because of the dispute with Papua New Guinea over their ownership agreement for the underwater mine.
The country optioned to acquire 30% of the Solwara 1 project, located in its territorial waters in the Bismarck Sea, last year and, as part of the agreement, Papua New Guinea have to pay its share of development costs for the mine.
“Unless and until the dispute is resolved, completion will be delayed or may not occur and Nautilus must continue to carry these costs,” said Nautilus in a release.
Not long ago, the future looked promising for Nautilus. In late April, the company announced it had signed China's Tongling Non-ferrous Metals Group as the first customer of its pioneering Papua New Guinean sea-floor mine.
The project, in the minerals-rich Manus basin of PNG's Bismarck Sea, is claimed by Nautilus as the world's first commercial sea-floor mine, and is slated to begin production in the fourth quarter of 2013.
Nautilus shares fell over 12% in the Toronto Stock Exchange after the announcement.