By MALUM NALU
Nautilus Nautilus Minerals, which is set to start revolutionary underwater mining at Solwara 1 in the Bismark Sea between East New Britain and New Ireland provinces in 2013, has already secured a Chinese buyer for its first three years of operation, The National reports.
This was confirmed by Nautilus country manager Mel Togolo at a mining and petroleum workshop for PNG media at the Gateway Hotel in Port Moresby last Friday.
He said indicated resource was one metric tonne at 7.2% copper and 5 grammes/tonne gold while inferred resource was 1.5 metric tonnes at 8.1% copper and 6.4 g/t gold.
The material will be treated by conventional grinding and flotation and will produce a copper concentrate of 25-30% with recoveries of between 85-90%.
Fifty per cent of the gold will be recovered in the copper concentrate.
“We have recently signed a landmark offtake agreement with Tongling Nonferrous Metals Group Co for a period of three years commencing upon the first delivery of product from Solwara 1,” he said.
“So in the first phase there will be no treatment at site, no tailings and minimal shore based infrastructure required.
“We currently estimate the operating cost to bring material from the seafloor and get it to shore will be approximately US$80/tonne, and then on top of that there will be shipping and processing costs.
“We have not produced a feasibility full feasibility study outlining the project economics, but our competitors are producing copper at a cost of around $1 per pound and we would expect to be very competitive.”
Togolo said based on current metal prices, a tonne of Nautilus material currently was worth about US$, 1,000.
“We expect to produce around 1.3 million tonnes per year, leading to production of 80,000 tonnes of copper and 150,000 ounces of gold a year.
“So there will be a healthy margin, giving us a payback of about a year to 18 months.
“The capital cost of the seafloor production system will be $407 million, including a $50 million contingency.
“The government will contribute 30% of that.”
Togolo said in phase two of the project, Nautilus could then look at potentially constructing its own concentrator facility to enable it to capture more of the value from the project.
Nautilus now controls an area in PNG, Vanuatu, Fiji, Tonga, New Zealand and the Solomon Islands of over 600,000 square kilometres, about the size of France, “which makes Nautilus one of the largest landowners in the world”.
“Our exploration success to date has identified 19 prospects in the Bismarck Sea and a further 16 prospects in Tonga,” Togolo said
“Already in 2012 Nautilus has been out on the water in the Bismarck conducting further exploration activities over our tenements in the Bismarck with a drilling campaign scheduled for later in 2012.”