Source: Mining Weekly

Employees of Soil Machine Dynamics (SMD) work on a subsea mining machine being built for Nautilus Minerals at Wallsend, northern England April 14, 2014.

Prospective Canadian deep-sea miner Nautilus Minerals on Wednesday announced that it had started building its second seafloor production tool (SPT), the collecting machine (CM), at third-party manufacturer Soil Machine Dynamics’ (SMD) facility at Newcastle upon Tyne, in the UK.

Nautilus, which plans to mine copper and gold from the Solwara 1 seafloor project, offshore Papua New Guinea (PNG), said that it had split excavation and collecting mineralised material into three individual tasks, which would each be carried out by a different SPT.

The Toronto-based company explained that the auxiliary cutter (AC) is designed as the pioneering tool, which prepares the rugged seabed for the more powerful bulk cutter (BC), which the company had already built.

While these two tools gather the excavated material, the third – the CM – would collect the cut material by drawing it in as seawater slurry with internal pumps and push it through a flexible pipe to the subsea pump and on to the production support vessel (PSV) through the riser and lifting system (RALS).

“Having already announced in April this year, the completion of the assembly of the BC, we are delighted that the assembly of the CM has now started, with the arrival of the chassis at the SMD facility.

“This is an exciting time for the company as we continue to build the seafloor production equipment. We look forward to start the assembly of the third and final SPT, the AC, when its chassis is delivered next month,” Nautilus CEO Mike Johnston said.

Last month, Nautilus reported that the PNG government has paid $113-million into escrow, representing the balance of the State’s 15% share of capital required to complete the Solwara 1 offshore project up to first production.

At the end of last month, Nautilus announced that it had resolved the dispute with the State and signed an agreement with the State’s nominee, Eda Kopa (Solwara) Limited, a subsidiary of Petromin PNG Holdings, enabling the project to move forward toward production.

With Eda Kopa having paid its share of the project development capital, Nautilus’ focus now shifts to chartering a production support vessel and securing certain intellectual property rights within six months for Eda Kopa. The funds will be released to Nautilus when both conditions have been met.

The company is in discussion with potential vessel partners, while also undertaking a tender process with shipyards experienced in building offshore construction vessels.

Nautilus own 70% of the project, with the government of PNG holding a 30% interest.

Nautilus’s share price had more than doubled since the start of the year, spiking to its highest level in two years last month, after the company announced it had resolved its dispute with the PNG government. However, in the stock’s recent history, at C$0.53 apiece on Wednesday, the share price was nowhere close to the lofty C$3.48-level seen early in 2011.