Nautilus Minerals Inc. - Solwara 1 Project – High Grade Copper and Gold

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Solwara 1 Project – High Grade Copper and Gold

Environment Drill Data Resource Report

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Recent Updates

26-Aug-10 - Nautilus Issues Options (more...)
10-Aug-10 - Nautilus Minerals Announces Financial Results for Q2 2010 (more...)
03-Aug-10 - Nautilus Minerals Conference Attendance Update (Second Half 2010) (more...)

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Our current focus remains on delivering a cost effective and efficient system for our first commercial development, the Solwara 1 Project, which is located at 1600 metres water depth in the Bismarck Sea, Papua New Guinea.

The Company released an independent Definition and Cost Study ("Study") for the Solwara 1 Project in the second quarter of 2010. The Study provides in depth details on resources, production planning and equipment to be used in the proposed operations. The key conclusions for the Solwara 1 Offshore Production System are:

Capital costs, including those associated with barging to the Port of Rabaul, estimated to be US$383 million (including a 17.5% contingency).
Average operating costs to the Port of Rabaul estimated at US$70 per tonne (including a 10% contingency) based on a 1.35 million tonnes per year production rate.
Production rate commencing at 1.2 million tonnes per year (dry equivalent) with capacity to ramp up to 1.8 million tonnes per year.
Once approved by the Board of Nautilus, the build program is 30 months to commence commercial production.

Through strategic partnerships and collaboration with industry leaders from around the globe, the Company is refining existing technologies for the Solwara 1 project. Technologies from surface mining (rock cutting), dredging (slurry pumping/hard rock cutting/gathering) and offshore oil and gas (trenching/Remotely Operated Vehicles ("ROVs")/risers) sectors are being combined and adapted for the Solwara 1 Production System.

How We Plan to Extract Minerals from the Seafloor

SOLWARA 1 RESOURCE

The exploration team drilled a 43-101 resource on the Solwara 1 Project in 2007 using newly developed ROV drills. The resulting high grade copper-gold resource was the world's first Seafloor Massive Sulphide ("SMS") resource statement. Results were as follows (December 20, 2007):

Indicated Mineral Resource: 870 kt @ 6.8% Cu, 4.8 g/t Au, 23 g/t Ag, 0.4% Zn.
Inferred Mineral Resource: 1,300 kt @ 7.5% Cu, 7.2 g/t Au, 37 g/t Ag, 0.8% Zn.

The detailed 43-101 resource report can be found here.

PERMITTING

Work progresses on the Mining Lease ("ML") application and the development proposal which were both submitted to the Government of PNG in Q3, 2008 (October 3, 2008). The Environmental Permit for the development of the Solwara 1 Project was granted in December 2009, by the Department of Environment and Conservation ("DEC") of Papua New Guinea for a term of 25 years, expiring in 2035 (January 5, 2010). To download the EIS and for more information on Safety, Community and the Environment, please visit our CARES pages www.cares.nautilusminerals.com

CURRENT ACTIVITY

The Project Development team continues production planning and engineering work on, materials handling, shipping, metallurgical testing and processing equipment. The team is actively engaged in sourcing production vessels, treatment solutions and other key contracts.

NEXT GENERATION PRODUCTION

Once Solwara 1 is operational, Nautilus plans to launch additional projects on our extensive tenement holdings across the South Pacific. To prepare for this growth we continue to evaluate technology from the perspective of its application to future production systems. Among the key technology areas that we will continue to evaluate and develop are:

Mobile ore transhipment systems to increase flexibility and reduce ore handling and transportation costs.

Improved scale/efficiencies in cutting, gathering and pumping equipment.
Equipment adaptations for rougher sea conditions.