Shipyard notifies Nautilus of default by major contractor
11 December 2017 - 12:15PM
Nautilus Minerals Inc. (TSX:NUS)
(OTC:NUSMF) (the "Company" or "Nautilus") announces that
Fujian Mawei Shipbuilding Ltd (the “Shipyard”), the owner of the
shipyard where Nautilus’ Production Support Vessel (the “PSV”) is
being built, has notified the Company that MAC Goliath Pte Ltd
(“MAC”), the buyer of the PSV, has failed to pay the third
installment of the contract price (~US$18M + interest). Under the
shipbuilding contract between the Shipyard and MAC (the
“contract”), MAC is required to rectify the default immediately,
and perform corresponding obligations under the contract.
If MAC fails to remedy the default within 21
days of the receipt of a notice to MAC from the Shipyard, then the
Shipyard may rescind the contract. In the event that the contract
is rescinded, the Shipyard has the right to either complete or not
complete the PSV and to sell the PSV by private sale either in a
complete or incomplete state.
In accordance with the terms of the contract,
Nautilus Minerals Singapore Pte Ltd has the option to either remedy
the default on behalf of MAC and/or replace MAC as a party to the
contract by way of a novation or assignment within fourteen days of
receipt of the notice to the Company from the Shipyard.
Nautilus notes that the current build of the PSV
is progressing well, with construction over 70% complete. The
derrick substructure was recently delivered to the Shipyard for
installation on the PSV. Foundations for two of the three Launch
and Recovery Systems (LARS) are being installed, the Bulk Cutter
winch has been installed, work on the cargo handling system is
progressing, and both the 100T and 200T cranes have now also been
installed (see links below).
Nautilus is in discussions with the Shipyard,
MAC and third parties with respect to the default and potential
remedies, and will issue further updates as matters develop.
Links
http://www.nautilusminerals.com/irm/PDF/1942_0/NautilusProvidesUpdate
Some recent pictures of the vessel build from the
shipyard
http://nus.live.irmau.com/irm/PDF/1943_0/latestpicturesfromtheshipyard
For more information please refer to www.nautilusminerals.com or
contact:
Investor Relations Nautilus Minerals Inc. (Toronto) Email:
investor@nautilusminerals.com Tel: +1 416-551-1100
The TSX does not accept responsibility for the adequacy
or accuracy of this press release.
Certain of the statements made in this news
release may contain forward-looking information within the meaning
of applicable securities laws, including statements with respect to
the default notice. We have made numerous assumptions about
such statements, including assumptions relating
to project funding and completion and
operation of the Company's seafloor
production system. Even though our management believes
the assumptions made and the expectations represented by such
statements are reasonable, there can be no assurance that they will
prove to be accurate. Forward-looking information
by its nature involves known
and unknown risks, uncertainties and
other factors which may cause the actual results to be
materially different from any future results expressed or implied
by such forward-looking information. Please
refer to our most recently
filed Annual Information Form in
respect of material assumptions and risks related to
the prospects of extracting minerals from the seafloor and other
risks relating to the Company's
business and plans for development
of the Solwara 1 Project. Risks
related to advancing towards production include the risk that the
Company will be unable to rectify or arrange for the rectification
of the default under the shipbuilding contract in order to enable
the continuation of the build of the PSV, the risk that MAC’s
negotiations with a third party for the novation of the agreements
will not be successfully concluded and the risk that the Company
will be unable to obtain at all or on acceptable terms the
remaining financing necessary to fund completion of the build,
testing and deployment of the Company's seafloor production system
and that agreements with third party contractors for building slots
within certain timeframes are not secured as required.
As the Company has not
completed an economic study in
respect of the Solwara 1
Project, there can be no assurance
that the Company's production plans will, if fully funded and
implemented, successfully demonstrate that seafloor resource
production is commercially viable. Risks related to the
previously announced restructuring plan include the risk that the
plan cannot be implemented as expected, the risk that the plan does
not result in the cost savings expected and the risk that the
restructuring plan and the bridge financing do not provide
sufficient time for the Company to secure project financings for
the Solwara 1 Project. Except as required by law, we do not
expect to update forward-looking statements and
information as conditions change and
you are referred to the full
discussion of the Company's business
contained in the Company's reports
filed with the securities regulatory
authorities in Canada.
About Nautilus Minerals Inc.
Nautilus is the first company to explore the ocean floor for
polymetallic seafloor massive sulphide deposits. Nautilus was
granted the first mining lease for such deposits at the prospect
known as Solwara 1, in the territorial waters of Papua New Guinea,
where it is aiming to produce copper, gold and silver. The Company
has also been granted its environmental permit for this site.
Nautilus also holds highly prospective exploration acreage in the
western Pacific (granted and under application), as well as in
international waters in the Central Pacific. A Canadian registered
company, Nautilus is listed on the TSX:NUS stock exchange and is
also a member of the Nasdaq International Designation program. Its
corporate office is in Brisbane, Australia. Its major shareholders
include MB Holding Company LLC, an Oman based group with interests
in mining, oil & gas, which holds a 29.3% interest and
Metalloinvest, the largest iron ore producer in Europe and the CIS,
which has a 18.5% holding (each on a non-diluted basis, excluding
loan shares outstanding under the Company’s share loan
plan).