Nautilus Solwara 1 project delayed
Nautilus Minerals Inc. has issued a statement saying that the company has decided to adopt a more cautious strategy to preserve its strong cash position by delaying the construction of equipment for the Solwara 1 mining system. The company says that this decision has been directly fuelled by the speed and severity of the global economic downturn and the uncertainty in the financial and commodity markets. Nautilus will continue to move forward with permitting for its Solwara 1 Project but at a reduced pace.
In November 2008 Mining Magazine reported the agreement of three new equipment contract awards for the Solwara 1 project located in the Bismark Sea. Nautilus now states that in order to preserve capital, the company plans to suspend or cut contracts and purchase orders with equipment suppliers depending on their importance to the revised development program. In particular, the order of a mining support vessel from North Sea Shipping Holding AS, announced on June 20, 2008 is currently in the process of being terminated.
As a result of this decision, Nautilus plans to reduce its workforce by approximately 30% to a level that will allow it to preserve cash while continuing to seek approval for its Solwara 1 Mining Licence application, and for its environmental permit. The company will also continue engineering work on the Solwara 1 mining system to enable a prompt restart when conditions allow. As a consequence, the previously announced timetable for first ore production at the Solwara is expected to be delayed beyond December 2010.
Nautilus' CEO, Stephen Rogers, commented: "Given market conditions, the Board of Directors and management have undertaken a thorough review of all operations. Deferring the equipment build for the Solwara mining system is a difficult yet appropriate decision. It also provides an opportunity to realise cost savings and possible benefits presented by the current market downturn. These may include reduced material and equipment costs, faster manufacturing times and lower logistics costs given a less heated market. The company remains committed to its objective of developing the world's first seafloor massive sulphide recovery operation.”