Nautilus Minerals Inc.

Nautilus Minerals Inc.

January 02, 2007 12:37 ET

RETRANSMISSION: Nautilus Minerals Equity Financing of Solwara 1 Development

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 2, 2007) -


Nautilus Minerals Inc. (TSX VENTURE:NUS) (the "Company" or "Nautilus") is pleased to announce that it has entered into an engagement letter with London-based investment bank Numis Securities Limited ("Numis") to act as Nominated Adviser and Broker in respect of a proposed admission to trading of its common shares on the Alternative Investment Market ("AIM") of the London Stock Exchange plc ("Admission") early in 2007.

The Numis mandate includes an equity capital raising (the "AIM Placing") to raise US$100 million or such higher amount as may be agreed between Numis and the Company by the issue of new common shares contemporaneously with Admission which is expected to take place at the end of January 2007.

The net proceeds of the AIM Placing are expected, when taken in conjunction with other anticipated sources of capital, to be sufficient to fund the Company through the permitting process and into production at its primary project, Solwara 1, in the territorial waters of Papua New Guinea.

The net proceeds of the AIM Placing will be deployed by the Company, alongside its existing cash resources of approximately US$112 million and other sources of capital, in the detailed design and construction of sub sea mining equipment, including two mechanical miners, power umbilicals, pumps, a 1,800 metre riser pipe and related handling equipment, as well as the construction of an on-shore concentrator plant and the acquisition of the necessary land on which to build the plant.

The sub sea equipment will be connected to and will be serviced by the 191 metre purpose-built deep sea mining vessel Jules Verne that is to be constructed at its own cost by Jan De Nul, one of the world's leading dredging companies, under an agreement announced by the Company on October 4, 2006. Jan De Nul will provide contract mining services to Nautilus, including the delivery of mined ore to the on-shore concentrator, under the same agreement.

David Heydon, Nautilus CEO comments: "Numis have followed our progress closely for some time and have witnessed our development from a small private company twelve months ago to a well capitalised quoted company with a number of the world's major mining companies as shareholders. This financing will allow us to continue this rapid growth."

The final terms for the AIM Placing will be settled and disclosed in due course and will be subject to the approval of the TSX Venture Exchange.

Numis will receive a 5% cash commission of the gross proceeds of the AIM Placing on closing and broker warrants exercisable in the aggregate for common shares equal in number to 330,000 plus 1% of the number of common shares sold pursuant to the AIM Placing.

North American private placement

In a separate announcement and under a separate engagement letter, Nautilus has announced that a syndicate of agents led by Vancouver-based Salman Partners Inc. have been retained by the Company to conduct a private equity placing of units consisting of one common share of the Company and one-half of one common share purchase warrant as discussed below (the "North American Placing") to raise up to US$60 million in North America, immediately subsequent to the AIM Placing. Further details of the North American Placing are contained in that announcement.

In accordance with applicable Canadian law and TSX Venture Exchange policies, the securities issued under the North American Placing and the AIM Placing may not be sold or otherwise traded on or through the facilities of the TSX Venture Exchange or otherwise in Canada or to or for the benefit of a Canadian resident for a four month period following the closing of the placings. The common shares issued in the AIM Placing will be free trading in the UK immediately following Admission. In order to recognize the different positions of placees under the two placings, the placees under the North American Placing will receive one-half of one warrant, in addition to each share, which will be exercisable at 130% of the North American placing price at any time within 24 months following the closing of the North American Placing.

Neither the North American Placing nor the AIM Placing are dependent one upon the other and are unconnected events, save that the Company has agreed that, if gross proceeds of US$100 million are raised under the AIM Placing and the North American Placing closes within 90 days of the AIM Placing, the North American Placing will not take place at a price below that at which common shares are issued pursuant to the AIM Placing.

The Company does not intend to use the North American Placing to fund its primary project, Solwara 1, into production. The net proceeds of the North American Placing will be available to the Company to fund further exploration on its other Solwara Projects and for further corporate development. The North American Placing is expected to close in the second half of February 2007.

About Nautilus Minerals Inc.

Nautilus is the first company to commercially explore the ocean floor for gold-copper-zinc-silver seafloor massive sulphide deposits and is positioned to become a world leader in underwater mineral exploration. The Company's main focus is the Solwara Project, which is located in the territorial waters of Papua New Guinea in the western Pacific Ocean. Nautilus numbers Anglo American PLC, Teck Cominco Limited and Barrick Gold Corporation amongst its major shareholders.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended or any state securities laws and may not be offered or sold within the United States or to U.S. persons unless registered under the United States Securities Act of 1933 and applicable state securities laws or an exemption from such registration is available.

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The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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