Nautilus Minerals is the first company to start mining minerals on the sea bed. The targets are SMSs (Seafloor Massive Sulphides) and quite a few have been found in the Bismarck Sea off northeast Papua New Guinea. So, following a three-year exploration programme, the company is now holding a beauty parade to find a joint venture partner with deep pockets.
That partner will finance the cutting of rock in water 1,500 metres deep, crushing it and turning it into slurry. Then it will be sucked up onto a barge to be transported ashore some 50km away. The main target this year is Solwara 1 which is rich in copper and gold but assay results from other sites indicate a high zinc content. One potential partner is major Canadian miner Teck Resources which holds a 6.8 per cent stake in Nautilus. A Russian oligarch has control of 21 per cent of the shares and Anglo American owns 11 per cent.
Nautilus’s losses fell in 2009 because it spent fewer (but it says more productive) exploration days at sea. Costs will be even lower in 2010 because the lease on the exploration vessel terminated in December. Any production vessel probably won’t be chartered until late 2010.
Broker Numis Securities forecasts a losses of $17.9m and $25.3m in 2010 and 2011, followed by a $29.7m profit in 2012.
NAUTILUS MINERALS (NUS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 136.5p | MARKET VALUE: | £212m | |
| TOUCH: | 133-140p | 12-MONTH HIGH: | 151p | LOW: 55.5p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 150¢ | CASH: | $209m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2005 | nil | -0.6 | -1.0 | nil |
| 2006 | nil | -8.7 | -16.0 | nil |
| 2007 | nil | -31.3 | -24.0 | nil |
| 2008 | nil | -82.0 | -55.0 | nil |
| 2009 | nil | -27.1 | -17.0 | nil |
| % change | - | - | - | - |
Aim: Mining: £1 = US$1.5193 | ||||
