Join our community of smart investors

Nautilus advances

RESULTS: Sub-sea miner Nautilus Minerals is advancing its Solwara 1 project to potential production next year
March 30, 2012

Sub-sea mining pioneer Nautilus Minerals remains on course to become the first company to produce copper and gold from the seafloor as it continues to develop its Solwara 1 project in the Bismarck Sea, Papua New Guinea (PNG). That potential leaves us reiterating our buy advice.

IC TIP: Buy at 168p

The company has achieved many of the landmarks required of mining projects. It declared, and is increasing, a mineral resource; it has received a mining lease for production in the Bismarck Sea; and the PNG government has exercised an option to acquire a 30 per cent contributing stake in the Solwara 1 project. Nautilus has also formed a joint venture with German shipping company Harren & Partner to construct and operate a vessel that will serve as floating operational base for the project.

Exploration drilling has increased the total resource to over 2.8m tonnes, which contains almost 200,000 tonnes of copper and 483,000 ounces of gold, all at the high grades that are typical of the so called 'seafloor massive sulphide mineralisation' that the company is targeting. With Solwara 1 progressing towards potential first production late next year, Nautilus is exploring a second project at Solwara 12 and has acquired further exploration licences in the eastern Pacific and Fiji.

NAUTILUS MINERALS (NUS)
ORD PRICE:168pMARKET VALUE:£329m
TOUCH:165-170p12-MONTH HIGH:220pLOW: 118p
DIVIDEND YIELD:nilPE RATIO:na
NET ASSET VALUE:132¢NET CASH:$149m*

Year to 31 DecTurnover ($m)Pre-tax profit ($m)Earnings per share (¢)Dividend per share (¢)
2007nil-31.3-24nil
2008nil-82.0-55nil
2009nil-27.1-17nil
2010nil-43.0-28nil
2011nil-34.0-20nil
% change

*Excludes $2.27m of restricted cash

£1=$1.60