Nautilus to Place Order for Mining Ship in First Quarter

Nautilus Minerals Inc. (NUS), the Toronto-based company that won the first lease to mine the ocean floor for gold and copper, expects to place an order for a vessel that will separate ore from seawater in the first quarter.

The company has quotes ranging from $180 million to $260 million for the ship, Chief Financial Officer Shontel Norgate, said during a call with investors today. The vessel will take two to three years to build, depending on which shipyard gets the order, she said.

“We’ll firm that up more over the next couple of months,” Norgate said. Nautilus plans to use tracked robots to cut ore from the sea floor and pump it up to the surface ship. The vessel will remove water from ore pumped up from the ocean floor and transfer the mineral to a transport ship.

Nautilus won leasing rights in January 2011 from the government of Papua New Guinea to explore for gold and copper off the nation’s coast. The company has an agreement to supply ore to Tongling Nonferrous Metals Group Co. (000630), a Chinese copper refiner.

Nautilus is open to funding the vessel with partners or paying for it alone, Norgate said. The company would pay 20 percent to 30 percent of the cost through equity and the rest would be debt-financed, she said.

“We want to get the best mix of cost, schedule and risk mitigation,” Chief Executive Officer Michael Johnston said during the call.

Nautilus gained 2.2 percent to 47 Canadian cents at 3:55 p.m. in Toronto. The stock has climbed 33 percent this year.

To contact the reporter on this story: Gerrit De Vynck in Toronto at gdevynck@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

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