Nautilus Minerals Inc NUSMF

RE:Downside?

[goldeggs]

The downside -if any more occurs- will largely depend on WHY government does not comply. If PNG wants to resume being a partner this will sort itself out. It is very likely that finding $118 million on short notice is a problem for PNG. Governments have to satisfy their lenders too but  can do many things to offset cash like tax breaks, fee waivers etc. if they are short of funds but still want to cooperate. PNG has political realities to deal with too.
However if PNG does not want to be a partner for whatever reason then it will lose its 30% stake for breaching its agreement. Nus could in theory resell this 30% to someone else for a similar amount. The validity of the permits in PNG were not an issue so Solwara could still be developed first unless the retationship becomes hostile. Since there is no benefit, nor evidence of this becoming hostile, I predict that the two parties will sort this out before the end of this year.
NUS will be needing some money to get into operation but it now has a receivable of $118 million that it can collect. This a at least 2 years from production so what is a month or two putting this back together.  There are some wounds to heal and management knows forcing this is not wise.