UPDATE 1-Nautilus says underwater copper mine moving ahead

* Cash position rises to $155.1 million at end of September

* Construction of mining system underway

* Eyeing production at Solwara 1 deposit by end of 2013

Nov 11 (Reuters) - Nautilus Minerals, which plans to mine copper from the Pacific Ocean floor, said on Friday that it is on track to start production at its flagship Solwara 1 project off the coast of Papua New Guinea by the end of 2013.

The Canadian-listed, Australian-based company reported a loss of $11.4 million for the quarter ended Sept. 30, but said its cash position rose to $155.1 million and that the funds are being used to build the seafloor mining system.

"Construction of key components is now advancing rapidly, and our seafloor production equipment is beginning to take shape," Chief Executive Steve Rogers said in a release.

The company plans to mine various underwater deposits using specially designed machines. The ore will be pumped up to the surface to a support vessel and then transported to shore.

Nautilus said long lead-time items such as the support vessel are being ordered, and that it is doing scale testing of its production process.

The company raised C$70.5 million in the quarter as part of a $98.1 million share offering, with the other $27.6 million raised in October.

Among Nautilus's top shareholders are Russia's Metalloinvest and diversified miner Anglo American .