Nautilus Minerals Share Discussion Threads

[dcomd99] 30/9/2007 18:20

I don't think the risks for NUS are that bad. I primarily see two risks:

Award of Production Licence from PNG. All politicians cannot resist some cash to help raise prosperity. I never thought North Sea oil should have been extracted when it was (at low oil prices), but the politicians wanted it NOW. Politicians in PNG will do the same. I see the environmental risks as very low.

Production risk. Basically we are talking about a ship, a pipe, a cutting platform and some pumps. The biggest risk IMO, is the reliability of the pumps and pipes. Replacing these with different ones wouldn't be a disaster if the first attempt fails. The ship may require modifications, but these shouldn't be too expensive. In fact, some early failures might provide a late buying opportunity.

The last commercial deep sea production attempt was about 20 years ago. A lot has changed in the last 20 years. 20 years ago, you bought a car and had to "run it in" and then change the oil. Today, you just run the car as normal from day 1. The difference is because of the advent of computer controlled machinery. This sort of precision is very important at 2500psi.

[mattybuoy] 29/9/2007 00:32

It is right to say that NUS is primarily a base metals stock. However, the beauty of VMS (or SMS) deposits is that they comprise a basket of copper, zinc, lead, silver and gold in varying quantities. So, each metal helps the others to get out of the ground as it were. Or, looking it another way the rock value is not just dependent on one commodity price. One particular tonne may have most of the value in copper, while in another tonne it is zinc and in another gold. The key point is being able to process the mixture, but this is probably not a problem since it has been done for years.

Both Rio and BHP got their start in life by developing large VMS deposits. Strangely enough these were called Rio Tinto (in Spain) and Broken Hill (in Oz) ;)

[dcomd99] 28/9/2007 22:49

Based on where I have seen you elsewhere, I suspect we have several stocks in common. However, I don't have 15:

MCR, LRL, AVM, CEY, UGY, HMB

I only have about 20% total in Gold stocks. Slightly more in Base metals (counting NUS as Base metal because of the Cu). 30% oil.

[wolstencroft] 28/9/2007 22:42

Actually, NUS is 6% of my portfolio, I have about 15 golds each taking about 2-4%.

[dcomd99] 28/9/2007 22:42

I think the worst that can happen is that the first attempts fail. However, IMO the majors will keep pumping money in until it does work.

I suspect they know enough to be fairly confident. It simply requires being aware of the basic physics, and designing the equipment properly.

I have emailed some questions to the company, but haven't had any replies yet.

[dcomd99] 28/9/2007 22:37

I suspect I'm more diversified than you. It's only about 7%, and it's quite close to 4th, 5th etc.

[wolstencroft] 28/9/2007 22:31

dcom: Sorry, I meant to say that this is my 3rd of 4th largest holding but by growth, i.e. I wouldnt put quite so much in as an initial investment but now its a capital gain I am happy to hold at these levels.

The maths is simply amazing if they pull it off - I can see this being a £20 or more stock in late 2008/2009. But it could still be a 20p stock as well if they blow all the money for nothing. Of course I think the former.

[dcomd99] 28/9/2007 22:29

wolstencroft: After this week, it's now my 3rd largest holding. In retrospect, I wish I had had more courage earlier in the week, but it's easy to be wise with hindsight.

[wolstencroft] 28/9/2007 22:21

dcom99: This is now my 3rd or 4th largest holding, but I did but a lot more at $2.70. I think that the recent placing 1) means that they have monies tied up to buy equipment, so news should be forthcoming on that 2) means that the institutions (or at least one of them) still strongly believe in the story

Heydon has said Oct 07 is when they announce the new ship - lets hope they deliver!

[dcomd99] 28/9/2007 22:09

Been buying NUS all this week, after doing lots of homework last weekend, and Monday evening. For those interested in how they could get the ore to the surface (the biggest challenge, IMO), this gives some ideas:



For more general understanding I suggest the following lecture notes:



Obviously none of this is directly relevant, but NUS basically need a very deep cutter suction dredge operation. I'm convinced it's solveable, given sufficient brainpower. Seems to me that there are minimal environmental concerns. Of course this won't stop the environmental lobby from trying to stop it, but they will have a very weak case. By contrast the PNG government will want the revenue stream that this will produce.

This is a real bargain, and it's gone up again tonight in TSX. Closed at 3.88, which is roughly £1.90. I suspect (hope) it's headed for £3 in the short term. Long term, I really believe this could be a 50+ bagger. It could really revolutionise the Cu market. The gold is much less valuable.

[wolstencroft] 27/9/2007 21:35

I guess there migt be a brokers note somehow funded out of this. Thats how the game works sometimes.

[mattybuoy] 27/9/2007 16:22

Nice work if you can get it ...

Good to see that Epion are now on the same terms as the other big boys. That's a potential 4 way bidding war you've got there.

[rapier686] 27/9/2007 15:04

What grates with me are these finders fees.
10% of the cash raised - plus a million warrants. And for what?

Epion know Nautilus and Nautilus know Epion. What exactly have M&A Advisors Ltd done to earn their very hefty fee?

[wolstencroft] 27/9/2007 14:58

It shows that the majors still have faith, buying in above the current share price.

[mad jack mcmad] 27/9/2007 14:46

Ah, RNS may have something to do with it.

[mad jack mcmad] 27/9/2007 10:36

Nice, taking off again.

[dcomd99] 26/9/2007 22:55

Pumping cold deep water in the ocean to the surface is good for the environment.



Sounds like Nautilus should receive a subsidy for its planned mining activities!

[rapier686] 24/9/2007 18:25

dcomd99 - yes that certainly is a concern. Jan de Nul's involvement and the 'fixed' contract mining price of $75/tonne was a significant comfort.

And the relationship falling apart is a discomfort for just the possible reason you suggest. Or it could be that JdN realised it looked good and wanted to force a bigger share of the pie in various respects but NUS felt strong enough to call their bluff rather than fold.

We have other comforts - the significant presence of majors on the shareholder register, and the move to the main board would be odd if they were privately short of confidence and playing some spivvy trick.

Listen to the conference call and decide if you believe them. There's now only a couple of weeks left in the 3 months they gave themselves, so we should hear their revised plan soon.

[ariane] 24/9/2007 14:20

Nautilus Minerals In Nautilus receives high-grade copper, gold assays at Solwara 1, Papua New Guinea


LONDON (Thomson Financial) - Nautilus Minerals Inc said its drill assay
results at Solwara 1, Papua New Guinea, show high-grade copper and gold assays,
and it is looking to extend the prospect.
The mining company said a total of 107 holes were drilled during the
programme.
David Heydon, Nautilus's chief executive, said: "The results show remarkable
consistency of the Cu and Au grades within the mineralised massive sulphide
zones. It is rare to see an assay below 2 pct Cu within the mineralised zones."

[e-mail]
ukn/cm2

[callumross] 24/9/2007 14:18

I suspect we'll rise big time when the canadian market opens and digests this news

[utwiq] 24/9/2007 14:16

genius - very economically viable

The rock is rather valuable - say 10% copper and 7.5g/t gold - with copper at $1/lb and gold at $600 each ton is worth $370. Cost to extract, smelt, etc. $100. That is quite a high opex actually, especially given that the technology they plan to use to extract is rather simple ($100/t was the conservative estimate from last year by the way). But be ultra conservative. Double the opex. You still have a colossal margin for each ton extracted. Vastly high enough to justify the capex. Say 1.8mt mined/yr which is the plan. The return, with very low metal price assumptions (remember copper is circa $3.5/lb and gold $730/oz) and very high opex estimates, is $306m/yr. That is your capex covered, and then some. Then consider the fact that this is scalable - get two ships going, pick off more of the obvious deposits. wolstencroft is right - the upside is amazing. Risks remain however, as he says, but the same is true of any mining investment, indeed any investment. Technical execution is doable in my view - management have the skills - and the environmental impact is also acceptable, again in my view - the high grade of the ore helps as we're only going to be removing a modest amount of rock (compared to dredging industries; and think about oil and gas offshore industry).

[wolstencroft] 24/9/2007 14:04

utwig: Agreed and one of my larger investments, but the environmental lobby have to be overcome still. But the returns are simply amazing if it comes right.

[genius85uk] 24/9/2007 13:58

New to this share, grades look promising. But how economically viable is underwater mineral recovery?

[utwiq] 24/9/2007 13:54

Ah good, we are getting the start of a sane reaction to more continuous high-grade results. It is simply astonishing that this stock isn't trading at +£3/share. One of the very best mining stock investments one can ever make in my view, and by 2010/11 the whole world will know it!

[mad jack mcmad] 24/9/2007 13:52

It will. Give people a few minutes to read it!