Neptune Minerals Share Discussion Threads

[rapier686] 19/6/2007 00:11

Hmm yes. If I had been more alert to following up 20-20 Copper day, I might have been in Nautilus post Jan-de-Nul (the main derisker) but pre-Anglo (the main price booster) too.

My asset allocation reflects my time-to-the-party. I think congratulations are in order to your decisive self!

But from where we are now - yes I think 2nd mover has a lot to recommend itself.

[wolstencroft] 18/6/2007 23:49

Agreed and good luck to them both - I have 6 times in Nautilus than in Neptune BTW but wish I had bought more Neptune!
And there may be some advantage is being a fast-follower where Neptune can learn by the mistake of Nautilus, if they make any!

[rapier686] 18/6/2007 23:40

Yep I'm in both too - but rather more in Neptune.

Neptune has considerably more reward - I waved a hand at 3 times more risk-adjusted a few posts back - but undeniably higher risk. So there's only so much a sensible investor would want to have exposed to Neptune and frankly I've probably overdone it!

Nautilus have pointed at a specific deposit(s) and said we'll mine this, this is how we'll do it and look we've already raised the finance and sorted one of the more problematic aspects (the other is the disaggregation machinery which is still on their account with a $120m budget if memory serves).

Whereas it is an act of faith (though IMHO not an unreasonable one) to suppose that Neptune have such on their acreage and will find it, and will put together the deals to make it happen. Although today goes a long way towards the latter part and helps to imply Conical Seamount (found by academic cruises) looks like an example.

IMHO though, the greater act of faith is whether it will all work out subsea - and both Nautilus and Neptune stand or fall by that common risk.

[wolstencroft] 18/6/2007 22:36

mattbuoy - have a look at their recent sampling campaign news! Especially solwara 8

Anyway I think any sensible investor would be in both

NUS news announcing solwara 8:
------------------------------------------------------------
Indicative average of analysis using hand held XRF Unit
------------------------------------------------------------
Site No. of Samples Cu (%) Zn (%) Pb (%)
------------------------------------------------------------
Solwara 5 5 0.6 11.0 1.9
------------------------------------------------------------
Solwara 6 7 11.3 11.4 0.8
------------------------------------------------------------
Solwara 7 7 3.6 13.9 0.6
------------------------------------------------------------
Solwara 8 30 9.3 21.0 0.8
------------------------------------------------------------

[mattybuoy] 18/6/2007 22:29

I think you'll find that several of we "happy few" are in Nautilus too. However, they are basically just waiting for the ship to be built and other practicalities so there's not really much to talk about.

The reference to "North Sea" was just saying that the oil industry successfully went offshore some time ago, so why is there so little interest in the mining equivalent?

[champnchip] 18/6/2007 22:17

thanks for your replies ,it's intriguing (my spell checker accepted that!).judging from sawbones' last post on the nautilus board i take it no one here is in nautilus.
ps......any chance of you reminding me what the north sea experience was.

[wolstencroft] 18/6/2007 18:35

or the Gulf of Mexico!!

Of course it is new but just look at the grades. Seems to be a very good candidate for the Next Big Thing in mining. e.g. Look at TMC and direct shipping of limonite/saprolite Nickel laterites, no one really believed it until they did it and now quite a few miners are trying to do it.

[mattybuoy] 18/6/2007 18:26

Absolutely :)

It continues to amaze me how little interest there seems to be in this concept. You would have thought that the North Sea oil experience would rub off a bit ...

[rapier686] 18/6/2007 17:52

Both have a fair few dilutive warrants out (which I shall ignore).
Accounting for Nautilus's cash there's still a factor of 9 in the enterprise values.

Nautilus
130m shares * £2.5 = £325m. Less cash of $112m at 31 Dec + $188m subsequently.
Enterprise value £175m.

Neptune
65m shares * .33 = £21.5m. Previous cash probably more or less spoken for, £2.5m raised today.
Enterprise value £19m.

If Nautilus makes a success of Solwara then it will be raking in cash – but the main value in Nautilus will not be the substantial value of Solwara but that the seabed SMS concept is demonstrated and they've a huge prospective landgrab.

That landgrab value should accrue to Neptune too with, on the face of it, comparable acreage. Quite apart from that they're likely to have their own project a couple of years behind. Other dredgers might be quick to follow Jan-de-Nul's example – like Newmont today followed Barrick/Anglo/Teck.

Should Nautilus fail – both companies are up a gum tree without a paddle.

A factor of 3 in enterprise values might be fair enough – but a factor of 9 looks excessive to me.

[wolstencroft] 18/6/2007 17:08

Remember nautilus is 50% cash and they are having a ship built for them

[rapier686] 18/6/2007 16:20

Oh, champnchip, for a quick overview of Nautilus and the proposed Solwara development you can't beat one of David Heydon (Nautilus CEO)'s presentations.

This one's from April 27th



I quite agree with Matt that Nautilus is the place to start - and then consider whether Nautilus's lead (which just shrank today) is adequate to warrant the difference in enterprise values.

[rapier686] 18/6/2007 16:15

Hmmm, this is following reasonably hot on the heels of the PNG licence grant.

I wonder if Conical Seamount in particular is Newmont's interest - and £2.5m is just what's required to "complete high resolution surface mapping and
geophysics and to collect surface samples" on the PNG tenements, all of which "cover features similar to Conical and in similar locations on the flanks of the Lihir seamount massif".

Maybe the better parallel is not the Anglo placement, but Barrick/Pacer Dome. Which ultimately ended up as explo work for a 10% interest (and "certain non competition terms for a period of five years").

[mattybuoy] 18/6/2007 14:41

Nautilus is listed on TSX and LSE. Canadian quote information may be found at:

[champnchip] 18/6/2007 14:40

thanks i'll have a good read later,...are nautilus listed in oz?

[mattybuoy] 18/6/2007 14:37

Some quick answers though (re. SMS deposits):

1) The plan is to mine collapsed defunct chimneys, which have formed "sediments".
2) Sucked up via a long tube, with ROVs breaking up the ore on the seabed.
3) There is no waste as such since the ore is directly on the seabed and no stripping is required. The processing plant (on land) will of course produce tailings as per normal.
4) Estimated mining costs are about $75/tonne. Which is dwarfed by the value of the high-grade ore.
5) There are probably no substantive environmental issues, but of course some people will kick up a stink anyway.

It's worth noting that some of Neptune's prospects are not SMS deposits, but instead are "hydrothermal" gold deposits. There is currently no detail as to how these might be mined, but I would guess it's going to be similar.

[mattybuoy] 18/6/2007 14:31

The best thing to do is have a look at and read the blurbs there. Nautilus is much nearer to actual mining than Neptune and has detailed plans. Which are, in theory at least, very economically viable.

The idea is that Neptune will be able to do pretty much exactly the same thing in its license areas once they have pin-pointed some useful deposits.

[champnchip] 18/6/2007 14:27

new to this so sorry for ignorance...are they mining around the chimneys,how do they get it to the surface, what do they do with the waste,how expensive is it compared to traditional mining,do they have any environmental issues? could be a long answer ( unless its DYOR !) so some pointers to where to look for answers is acceptable and appreciated.

[mattybuoy] 18/6/2007 14:17

It's also interesting that the deal leaves out some of of Neptune's license areas. Namely those in Federated States of Micronesia (Pac), Marianas (Pac), Vanuata (Pac) and Italy (Med). Whether that means these are not much cop, or it's because they are only applications (which may progress slowly) is anyone's guess.

P.S. Yes Neptune is Rusina's only potential challenger in the competition as far as I'm concerned. Since I hold both I don't really mind who wins! ;)

[rapier686] 18/6/2007 14:10

Well Matt, the last two times I saw you call deals stonking were on 26th April and 25th May. Since when the share in question is up 30%.

Perhaps the PPP competition will hot up now!

In the meantime, well if the market always had stuff correctly priced, there'd be no money to be made and we wouldn't be here. There's no hurry, so long as it's corrected its oversight by 31 Dec I'll be happy!

Wols, I'm sure Nautilus would be keen to tie another co in and could have found room for £2.5m - it's not like they'd be giving away 10%!

So it must be #2 motivating #3 & #4. Nice summary.

[wolstencroft] 18/6/2007 13:43

Well something akin to this happenend with Nautilus which also saw a placing above market price and the market took a while to respond (Nautilus is Neptune's big-brother so to speak). What can you do - buy whilst the market is asleep?

There are several interpretations for this

1, Newmont tried to buy into Nautilus but could not - after all they are almost fully funded to production.
2, Newmont realise that they have been left out with regard to sea-bed mining and/or Nautilus (Anglo, Barrick etc) and need to make some investment
3, Newmont see the value of Neptune looking at the comparative market caps
4, Newmont like the assets of Neptune - I can partially believe this a they seem to be politically more secure.

Whatever, this is bullish for both Neptune and Nautilus.

[mattybuoy] 18/6/2007 13:39

Yes I've just re-read it, more carefully this time. The door is still very much open for others to join the party.

As I said in the HoL, "totally stonking" :) The market is totally un-interested though, what can you do?

[rapier686] 18/6/2007 13:35

That's how I read the non competition bit.

But in fact I think I've underestimated the deal - for some reason I read that Newmount could back into what Neptune find. No - they merely have right of first refusal on terms to be agreed at the time!

[mattybuoy] 18/6/2007 13:12

OK looks like I am wrong again, as usual ;)

"Newmont has agreed a non-competition clause" - what exactly does that mean though? Does it mean that Newmont won't directly compete with Neptune in those areas?

[rapier686] 18/6/2007 13:08

Yes, odd lack of reaction. It's been a case of "if you want a share buying, buy it yourself" for me as I've bought back the 38k I sold 3 weeks ago to finance my warrant splurge. I've got enough already – but the tax effect's rather pleasing (restoring the December date for BATR and realising a CGT loss on the repurchase instead of a gain on the sale).

I don't quite get your point on the exclusivity – it seems pretty closely modelled on Nautilus's AA deal.

Neptune : "Neptune has granted to Newmont the right of first refusal to negotiate a majority interest in joint ventures on Neptune projects within New Zealand, Japan, and Papua New Guinea. Newmont has agreed a non-competition clause in the Exclusive Economic Zones of those countries"

Nautilus : "subject to Anglo entering in to a non-compete agreement, Nautilus would offer to Anglo the opportunity to enter in to a Joint Venture should Nautilus consider entering in to a Joint Venture on any areas over which it held exploration rights or applications for such rights on October 20, 2006"

Neptune : "Newmont has agreed to conduct metallurgical test work on the bulk SMS samples that Neptune intends to collect during the current Kermadec 07 exploration work program. Newmont may also second, at its cost, specialist technical staff to Neptune to assist the Company with geological, engineering and metallurgical Studies"

Nautilus : "Anglo may assist Nautilus in its development of Solwara and other projects by seconding personnel with specialist skills to the project at Anglo's cost"

Neptune : "Newmont has been granted a non-dilution right that will enable it to maintain ownership of 10% of the outstanding shares of Neptune, by subscribing for further ordinary shares as and when and at the price at which any ordinary shares are issued by the Company over a two year period following the placement"

Nautilus : "Anglo has been granted an anti-dilution right that will enable it to maintain its percentage ownership in the shares of the Company until October 31, 2008"

Note the Anglo agreement didn't stop a similar one for Teck: "Teck Cominco will have the exclusive right for a term of five years, to form joint ventures on tenements acquired by Nautilus in certain countries since October 20, 2006 ("New Tenements")."

And likewise Neptune might be lining up further applications.

[mattybuoy] 18/6/2007 12:48

Excellent news!

It looks like the deal is an "exclusive", unlike Nautilus's more catholic partnering.

Bizarre lack of reaction by the market. I can only suppose that the City boys have never seen a placing at a premium before ;)