Nautilus Minerals Inc. (TSX:T.NUS, Stock Forum) said it continues to attempt to work with the State of Papua New Guinea in an effort to resolve the monetary dispute over the 30% stake the State holds in Solwara 1.
Nautilus is the first company to explore the ocean floor for polymetallic seafloor massive sulphide deposits and is developing its first project at Solwara 1, in the territorial waters of Papua New Guinea, where it is aiming to produce copper, gold and silver.
According to the press release, Nautilus and the State have agreed on the appointment of former Chief Justice of the High Court of Australia, the Honourable Murray Gleeson AC QC, as the arbitrator.
The arbitration will be conducted in Sydney, Australia under UNCITRAL arbitration rules, and may take several months to conclude, provided that Nautilus and the State comply with the timetable set by the arbitrator and otherwise act in accordance with the rules.
On July 13, the State also issued the company with a second notice of arbitration in relation to disputes concerning certain statements made by the parties and whether such statements were made in accordance with the agreement dated March 29, 2011.
In a press release dated March 29, 2011, Nautilus announced the signing of the original agreement between the company and the State.
As stated in the original agreement, Nautilus will retain a 70% holding in an unincorporated joint venture to be established with the PNG government to hold the mining assets of the project. The government's 30% share of the joint venture will be held in Petromin PNG Holdings Ltd, the government owned company established to hold the State's mining and petroleum assets.
The government's initial payment to secure its holding will be approximately US$20-25 million, which represents its share of the exploration and development costs incurred up to the date of grant of the mining lease in Jan. 2011.
According to the company, the State has yet to pay for their 30% stake in the project.
Currently, the company has stated that unless and until the dispute is resolved, completion will be delayed or may not occur and Nautilus must continue to carry these costs.
On Tuesday, Nautilus was trading for $1.08 a share. The company has a market cap of $212 million, based on $196.4 million shares outstanding. The 52-week high and low was $3.40 and $0.92 respectively.