Independent State of Papua New Guinea

June 21, 2012 16:25 ET

Solwara 1 Project-Nautilus Minerals

PORT MORESBY, PAPUA NEW GUINEA--(Marketwire - June 21, 2012) - The Independent State of Papua New Guinea (State) notes the recent public statements made by Nautilus Minerals Inc. (Nautilus) and its affiliate Nautilus Minerals Niugini Limited (Nautilus Niugini) in regard to the dispute between the parties pertaining to the State Equity Option Agreement dated 29 March 2011 between the State, Nautilus and Nautilus Niugini (SEOA) (Dispute). The State has issued this news release to clarify the record in regard to the Dispute.

The State has now issued a Notice of Arbitration to the Company which asserts that Nautilus has not met certain obligations on which completion of the transactions contemplated by the Agreement is dependent, that Nautilus has breached the SEOA and that the State is entitled to terminate the SEOA.

Pursuant to the terms of the SEOA, the parties are to refrain from publicizing information relating to the SEOA absent mutual consent to do so. While the State is accordingly not at liberty at this time to unilaterally publicize information in relation to the Dispute, the State notes that it has and continues to object to the characterizations of the Dispute being made by Nautilus, and has not given its consent to those characterizations, on the basis that they are not factual and balanced.

The State also objects to the representation made by Nautilus that it has acted in reliance on statements made by parties other than the State's authorized negotiating team (Authorized Negotiators). Nautilus has repeatedly been expressly informed by the State that the only persons authorized to make representations in regard to the Dispute are the Authorized Negotiators, and Nautilus accordingly has no basis to suggest, in its public disclosure, that it has relied on representations made by other parties.

The State will continue to encourage Nautilus to consent to factual and balanced public disclosure on the details of the Dispute, and will continue to attempt to resolve the Dispute in good faith.

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