NAUTILUS Minerals has confirmed the deadline for the Papua New Guinea government to purchase its 30 per cent stake in the Solwara 1 project has passed without any action.
PNG was recently ordered to pay Nautilus US$118 million plus interest for the minority stake in the project by October 23, however the deepsea explorer said the deadline had passed without the receipt of any funds.
“The Independent State of Papua New Guinea has not yet completed the purchase of its 30% interest in the Solwara 1 project,” the Toronto-based company said on October 24.
“The company is in discussions with senior officials of the State and it remains Nautilus’preference to resolve these matters amicably with the State.”
An ongoing dispute between the government and Nautilus around Solwara 1 looked to be resolved earlier in October when independent Australian arbitrator Murray Gleeson found the PNG government has breached an agreement signed between the parties in failing to complete the purchase of a 30% interest in the Solwara 1 in November 2011.
MR QC Gleeson also ordered the state to pay 30% of all project expenditure incurred to date, as alleged to be stated in the original agreement.
The total amount payable by the government as a stakeholder in the project was determined to be $118 million, or K$333.3 million.
PNG now has no option but to pay up as the arbitrator’s decision is final and binding. It is unclear when the government will make the payment since missing deadline, with local media outlets reporting that Prime Minister Peter O’Neill had sought legal advice on the tribunal’s decision.
While Nautilus had set its sights on moving the project forward in the wake of the arbitrator’s award, it’s safe to say progress on that front may not be top priority with the outstanding capital owed to it still nowhere in sight.
But Nautilus interim chief executive Mike Johnston has reassured shareholders it has its eyes set firmly on the prize.
“Our immediate plan is to complete the build of the seafloor production equipment,” he said. “Now that we have received the arbitration decision we are in a better position to select a shipyard and finalise the vessel financing structure.”
The Solwara 1 project, located in the Bismarck Sea, will involve the company mining copper and gold deep on the seafloor.
Extraction of ore will take place using spaceage subsea mining robots brought to surface by a flexible riser and pumping system connected to a production support vessel. From there, the sulphides will be dewatered and processed to extract commercial quantities of copper and gold.