TORONTO, ONTARIO--(Marketwired - Jan 18, 2016) - Nautilus Minerals Inc. (NUS.TO) (NUSMF) (OTC:NUSMF Nasdaq Intl Designation) (the "Company" or "Nautilus") announces that it has signed agreements with United Engineering Services LLC ("UES") to provide support services associated with wet testing the Company's Seafloor Production Equipment and storing the equipment as it is delivered from various suppliers prior to integration onto the Company's Production Support Vessel ("PSV").
The first of the equipment to be tested will be the three Seafloor Production Tools (SPTs). The SPTs are due for delivery from the Soil Machine Dynamics facility in Newcastle upon Tyne early in 2016. Each machine is undergoing rigorous commissioning and factory acceptance testing which has been conducted in dry conditions on land. Once delivered, the SPTs will undergo extensive wet testing at Duqm Port in Oman which is designed to provide a submerged demonstration of the fully assembled SPTs and will involve submerged testing of:
Control systems operations and feedback
Collection system functions
Survey and visualization systems
On completion of the wet testing, the SPTs will be stored at UES facilities in Duqm, Oman for preservation and maintenance until integration on the PSV which is expected to occur in 2017.
Mike Johnston, Nautilus' CEO, commented, "It is very exciting to have the SPTs all fully assembled as we prepare for wet testing. We appreciate the ongoing support from our largest shareholder, MB Holding Company LLC, who is assisting us with the wet testing and provision of storage facilities in Oman. We look forward to the next phase of development to wet test our equipment as we work towards commencing our seafloor operations in Q1 2018."
UES is a wholly-owned subsidiary of MB Holding Company LLC ("MB"), which holds, directly or indirectly, approximately 27% of the Company's issued and outstanding shares and has two nominee directors sitting on the Company's board (Dr. Mohammed Al Barwani and Tariq Al Barwani). Accordingly, the support services and equipment storage contracts with UES constitute a "related party transaction" of the Company under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101").
The board of directors of the Company, excluding the two interested directors, unanimously approved the contracts with UES, and determined that the transaction is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 in reliance on the exemptions set forth in sections 5.5(a) and 5.7(1)(a) of MI 61-101, on the basis that, at the time the transaction was agreed to, neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the transaction exceeds 25% of the Company's market capitalization.
UES has been a pillar of Oman's Engineering services for over 3 decades catering to the fields of Oil & Gas and Power Generation & Water. Recognized for HSE Excellence, its quality products and on-time delivery, UES has grown from strength to strength since its inception in 1979. Today, UES is an international company with multiple facilities in Oman, UK and Malaysia with more facilities expected to be setup internationally in the near future. In addition to catering to the fields of Oil & Gas and Power Generation & Water, UES has successfully integrated into the fields of Mining, Marine & Defence. UES has operations in over 22 countries worldwide and over 6000 employees. UES is strategically placed and with the support provided by its parent company MB, has taken advantage of and has access to markets all over the world.
An animation of how the seafloor production system works can be viewed on the Company's website: www.nautilusminerals.com/irm/content/video-gallery.aspx?RID=421
Neither the TSX nor the OTCQX accepts 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 expected timing of delivery of the SPTs, and the plan to commence seafloor operations in Q1 2018. We have made numerous assumptions about such statements, including assumptions relating to the funding, 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. The Company is assuming that the seafloor production system, including the SPTs, will be built and operate according to the Nautilus specifications and that delivery and testing operations will occur on schedule. Risks related to such arrangements include delay to the planned delivery and/or testing operations of the seafloor production equipment, including the SPTs, and a consequent delay to the commencement of seafloor operations. Risks related to advancing towards production include 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 and deployment of the Company's seafloor production system. 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. 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 trades on the OTCQX:NUSMF, 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 28.14% interest, Metalloinvest, the largest iron ore producer in Europe and the CIS, which has a 20.89% holding and global mining group Anglo American, which holds a 5.99% interest (each on a non-diluted basis, excluding loan shares outstanding under the Company's share loan plan).