Nautilus Minerals has decided to preserve its cash position by terminating the construction of the equipment for its Seafloor Production System. It announced in June 1, 2012 that it was in dispute Papua New Guinea as to the parties' obligations to complete the agreement entered into in March 2011.
To date, an agreed commercial resolution has not been achieved and Nautilus believes the avenues for achieving such a resolution within the timeframe that Nautilus could reasonably continue to carry the total development costs for the project have now been exhausted.It has decided to terminate construction and all of the relevant supplier agreements contain provisions for termination without penalty. The company has also been forced to reduce staff numbers with approximately 60 positions being made redundant.
Nautilus' CEO, Mike Johnston, commented: "While terminating the equipment build for the Seafloor Production System and reducing staff numbers to this extent was a difficult decision, it was appropriate. Nautilus has a highly prospective ground position, which includes 19 identified prospects in Tonga, including the recent high grade discoveries in the NE Lau Basin and a 410m tonne Inferred Mineral Resource in the Central Pacific.
"Despite this setback, the company remains committed to maximising shareholder value by achieving its objective of developing the world's first commercial seafloor copper-gold project and launching the deep water seafloor resource production industry, whilst maintaining an environmentally and socially responsible approach."