Nautilus rockets 27% as investors speculate on what's next for seabed mining
Nautilus Minerals (TSX/AIM:NUS) shot up 26.8% to $0.355 in heavy volumes on Monday as investors speculated about the future of the embattled company after it decided to stop working on specialized seabed mining equipment for its Papua New Guinea gold-silver-copper project.
"We were paying for it all ourselves and it was becoming too costly," Mike Johnston, interim president and CEO Johnston told SciDev.Net. "We were at an expensive stage of the build. We were spending US$3 million or US$4 million a week. For a company of our size, we couldn't continue to pay for that ourselves."
The Toronto-based company has run into serious troubles at its flagship project off the Papua New Guinea coast, most recently with the departure of a long-time CEO, layoffs and a petition landowners sent to the PNG government to cancel the firm’s seabed mining permit.
The company's Solwara project – what would be the world's first seabed mine – is already half built and was slated to begin production in the fourth quarter of 2013, but a dispute with the PNG government over ownership and funding issues with its partners building a surface vessel for the operation have the put the project on ice.
Shareholders in Nautilus – even after today's jump worth only $84 million on the Toronto big board – have seen the value of their investments evaporate by more than 80% since the company initiated a legal battle on June 1 over the copper-gold-silver project in the Bismarck Sea and the troubles with its German shipbuilders.
Nautilus also owns vast exploration tracts in the central Pacific Ocean and in September announced it has found nodules that occur in 4,000 and 6,000 meter deep waters that contain significant grades of manganese, nickel, copper and cobalt.
Nautilus said at the time the regulatory framework the International Seabed Authority has put in place since 1994 and what the company terms "reduced social disturbance" due to the nature of deep water mining versus "large land based resource developments" counts heavily in favour of this project, to be managed through a 100%-owned Tonga subsidiary.