INTERVIEW-Miner Nautilus aims to tap riches of ocean floor
(Figures in U.S. dollars)
* High-grade deposits lie beneath more than mile of water
* Company targets seabed metal production by late 2010
* Uses technology from offshore oil and gas industry
TORONTO, June 24 (Reuters) - Rocketing metal prices have prompted miners to seek out deposits in nearly all corners of the globe, but Canada's Nautilus Minerals (NUS.TO) is gunning to be the first to pull gold and copper from the ocean floor.
Nautilus has spent the last year signing contracts for a ship and deep-sea mining equipment, and is targeting production from a seabed deposit located off the coast of Papua New guinea by late 2010.
The company plans to use technology from the offshore oil and gas industry to get at abnormally high-grade metal deposits that -- despite lying beneath more than a mile of water -- are actually easier to access than typical hard-rock resources, Nautilus says.
"The thing that differentiates these seafloor, massive sulphides from land-based is that they are geologically younger, and they haven't had the plate movement and tectonic movement that land-based deposits have had," Nautilus Chief Executive Steve Rogers said in an interview.
"Therefore all these deposits lie on the sea floor, so they're much easier to get at than land-based deposits."
Rather than sinking a shaft through rock to get to an ore body, Nautilus will lower a remote mining machine from a ship, which will dig out a slurry-like ore, and pump it back up through a pipe.
In a mining industry beset by soaring development costs and long lead times to develop new mines, Nautilus promises a compressed development time line and copper grades that at Solwara have been around 8 percent to 10 percent, about 10 times what's normal in the industry.
CASH AND BACKERS
The company has just over $300 million in cash, and also has deep-pocketed backers in Teck Cominco (TCKb.TO), Barrick Gold (ABX.TO), Anglo American (AAL.L) and Epion Holdings, which is owned by Russian investor Alisher Usmanov.
Solwara will be its first undersea mine, and the company also holds licenses and permits in the territorial waters of Fiji, Tonga, the Solomon Islands and New Zealand.
While reluctant to get into precise cost estimates for the process, Rogers said he expects the undersea mining should be competitive with the land-based industry. Continued...
