Undersea Miner Resolves Dispute With Papua New Guinea

Nautilus Minerals Inc. (NUS), the Toronto-based company that won the first lease to mine the ocean floor for gold and copper, said it resolved a dispute with Papua New Guinea and that its Solwara 1 project can now proceed. The shares jumped as much as 30 percent.

Papua New Guinea paid Nautilus a $7 million non-refundable deposit and will take a 15 percent stake in Solwara, with an option to acquire another 15 percent, the company said today in a statement. The accord is conditional on the government funding its $113 million share for the first phase of the project, Nautilus said.

The company won an arbitration case against the government in October after Papua New Guinea failed to purchase 30 percent of Solwara under an earlier accord.

Nautilus said today it’s still looking for a suitable ship. The company said in October it received quotes ranging from $180 million to $260 million for the vessel, which will separate ore from seawater.

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

The shares rose 17 percent to 27 cents at 10:10 a.m. in Toronto after earlier gaining the most on an intraday basis since October.

To contact the reporter on this story: Simon Casey in New York at scasey4@bloomberg.net

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

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