Bridge loans continue to be made for pioneering seabed miner Nautilus Minerals Inc (TSX: NUS; OTC: MUSMF) by Deep Sea Mining Finance Ltd to help finalise the Solwara-1 seafloor massive sulphides project in Papua New Guinea waters.
The company said on Monday it has received bridge loans from Deep Sea totalling $US11.25 million, with the most recent being $US1.6 M. Nautilus has issued the lender an additional 6,872,852 warrants, which entitle Deep Sea to purchase a common share per warrant at C23 cents within the next five years.
To date, Nautilus has issued Deep Sea a total of 48,324,740 share purchase warrants. The loans bear interest at 8% per annum, payable bi-annually in arrears with a one year maturity date.
Deep Sea is owned equally by USM Holdings Ltd, an affiliate of Metalloinvest Holding (Cyprus) Ltd, and Mawarid Offshore Mining Ltd, a subsidiary of MB Holding Company LLC – already two major shareholders in Nautilus.
Remaining project finance for Solwara-1 to produce high grade copper, gold and other minerals was expected to be $US350 M.
On the previously detailed default on the production support vessel for Solwara-1, Nautilus said Fujian Mawei Shipbuilding Ltd, which was building the vessel said that MAC Goliath Pte Ltd, as vessel purchaser, had failed to pay the third instalment of the contract price (about $US18 M plus interest).
The vessel is to be chartered to the Company by MAC and is an essential component of the company's seafloor production system.
If MAC fails to remedy the default, the shipyard may rescind the shipbuilding contract. In the event the contract is rescinded, Mawei has the right to either complete or not complete the vessel and to sell the vessel by private sale either in a complete or incomplete state.
In accordance with terms of the contract, Nautilus Minerals Niugini Ltd, a subsidiary of Nautilus, has the option to either remedy the default or replace MAC as a party to the contract.
Nautilus said it was continuing talks with Mawei, MAC and third parties and this included the scope for third parties to assume responsibility to complete the vessel.
The vessel has already been launched by the shipyard and remains docked near Mawei facilities in China.
On timing of a mining start on Solwara-1 Nautilus and 15% partner, owned by the PNG Government, the company said there were no assurances Solwara-1 could be completed.
Nautilus has said earlier it was targeting commissioning Solwara-1 in the third quarter of 2019 after securing all financing, finalising the ship build contract and also completing the vessel integration methodology.
Because of the delays, the company was now expecting the production start could be delayed past the third quarter of 2019.