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TSX : NUSAIM : NUS
Deep Ocean Seafloor Mineral Extraction –
The Dawn of a New Industry
STAR SESSION
16 October, 2010
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Forward Looking Information and Disclaimer
This Presentation may contain forward-looking statements within the meaning of the United States Securities Exchange Act of 1934 and forward-looking information within the meaning of applicable Canadian securities law.
Material forward-looking statements and forward-looking information include, but are not limited to statements or information with respect to the Company’s ability to locate, mine and transport ore from the seafloor; estimates of future production; the method of transport and amount of ore from the Company’s Solwara project; estimates of anticipated costs and expenditures; and development and production timelines.
We have made numerous assumptions about the material forward-looking statements and information contained herein, including those relating to: the future price of copper, gold, silver and zinc; anticipated costs and expenditures; and our ability to achieve our goals. Even though our management believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that the forward-looking statement or information will prove to be accurate. Accordingly you should not place undue reliance on forward-looking statements or information.
Forward-looking statements and information by their nature involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those described in forward-looking statements or information. "Risk Factors" are presented in the Company's most recent Annual Information Form, available on SEDAR (www.sedar.com). Except as required by law, we undertake no obligation to update forward-looking statements and information as conditions change.
No information in this presentation shall constitute an invitation to invest in Nautilus or any entities of the Nautilus Group. Neither Nautilus, nor any entities of the Nautilus Group, nor their respective officers, employees or agents, shall be liable for any loss, damage or expense however caused (including through negligence) which you may directly or indirectly suffer in connection with this presentation including, without limitation, any loss of profit, indirect, incidental or consequential loss.
This information is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information.
While efforts are made to keep the information in this presentation accurate and timely, neither Nautilus nor any of the entities of the Nautilus Group guarantee or endorse the content, accuracy or completeness of the information herein. You are referred to the Company's documents filed on SEDAR.
All graphics, effects, processes, information and data in this Presentation are owned or used under license by Nautilus. Any reproduction or dissemination, in whole or in part, is strictly prohibited.
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Outline
Introduction Approvals Process International vs Local Perspective Nautilus’ Leading Strategy Concluding Remarks
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World’s demand for metals continues to rise Every human activity impacts on the environment Land resources are stretched A new concept
Why Go to the Sea?
Land-based mine Deep sea production
High tech, high grade, low volume, low waste, small footprint
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Nautilus is the first company to commercially explore for Seafloor Massive Sulphide (SMS) deposits – HIGH GRADES of copper, gold, zinc & silver
Minimal overburden Smaller physical footprint than land-based counterparts Minimal social disturbance
Seafloor Production Makes Sense
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Introduction
First project: Solwara 1 Bismarck Sea 1600 m depth 30 km from nearest
coast Small extraction area:
0.11 km20 20 40km
Konos
Namatanai
Rabaul
Kokopo
NEW BRITAIN
NEW IRELAND
SOLWARA 1 MLA 154
EL 1374
EL 1196EL 1196
EL 1374
BISMARCK SEA
PAPUA NEW GUINEA
BISMARCK SEA
LOCALITY MAP
NEW IRELAND PROVINCE
EAST NEW BRITAIN PROVINCE
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Legal Process
Mining Act 1992 Governs the exploration,
development, processing and transportation of minerals
Environment Act 2000 Outlines environmental
requirements of an activity EIS takes into account
social considerations
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What Makes Good Minerals Policy Framework?
Clear guidelines, timelines Transparency Consistency Efficiency Benefits justify risk(s)
Environmentally and Socially responsible
Economically viable Independence of reviewers Agreement from government and
affected stakeholders Provision for Adaptive Management
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Social License to Operate
Seafloor Production System
Seafloor Production Tools (SPTs)
Production Support Vessel (PSV)
Production Support Vessel (PSV)
Riser and Lifting System (RALS)
What are we seeking acceptance for?
1. Disaggregate seafloor material.
2. Transport the material to a ship.
3. Transport the material to market.
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Early, transparent and inclusive stakeholder engagement
Inclusive multi-stakeholder workshops Communities World-renowned experts Government NGOs
Ongoing Community Awareness and Consultations
Established CARES
www.cares.nautilusminerals.com
Nautilus Approach
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Achieving Independence
Independent researchersFreedom to publish
Independent reviewers Transparency
EIS on website
• Duke University• Scripps Institution of Oceanography• University of Toronto, Canada • WHOI• CSIRO, Australia • Hydrobiology, Australia• University of Papua New Guinea• Coffey Natural Systems, Australia • Rabaul Volcano Observatory, PNG • Asia Pacific Applied Science
Associates (APASA), Australia • Australian National University• Curtin University of Technology,
Australia• James Cook University, Australia• Charles Darwin University, Australia
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Solwara 1: Defining Features
Small scale (0.11 km2) Avoids land clearance activities compared to
typical land-based mining No construction of haul roads Minimal overburden/waste removal No chemicals, no blasting Infrastructure can be relocated (mobile) No direct impact to communities
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Potential Impacts (note: cartoon only)
International Focus
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Limiting the Impacts
Reference Site (S Su)
Temporary Refuge Areas
Animal relocation
Artificial substrates
EL 1196
MLA 154
SOLWARA 1
Solwara 5Solwara 5
North SuNorth Su
South SuSouth SuSolwara 9aSolwara 9a
Solwara 9bSolwara 9b
Mining Lease Application
Existing Exploration Licence
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Coastal, Shallow- and Mid-Water Environment
Issues raised during previous community consultations: Protect marine environments:
• Reefs and fisheries
• Whales, sharks and turtles
Nautilus response: “Engineer out” impacts to surface
waters:• No extraction impact shallower than
1300 m water depth at Solwara 1 (below where tuna, etc live)
Only impact to surface waters: presence of vessel, supporting vessels and riser pipe
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Consultation Methods
www.cares.nautilusminerals.com
Community Meetings
Local presence/Community Relations Officer
Website
PresentationsPosters
Brochures
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Delivering Community Messages Back to the Company
Name of Individual Position, Company/Affiliation Email and/or
Phone Number
Name Summary of Comments/Queries/Concerns/
Key Issues
Response/ Actions
Required
Commitment Date of
Follow-up
Responsible person
Call Date
Action by (name) Task Completed? When? Info
Attendance Sheets
Action List
Issues Register
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Training and Up-Skilling
Employment Currently ~20% of Nautilus full time
employees – PNG Nationals (May 2010)
Nautilus’ ultimate goal is for project workforce to be PNG Nationals
Supporting Education Nautilus-Duke Opportunity Bursary Training in state-of-the-art techniques
under supervision of world renowned deep sea ecologists
Initiative short-listed for an Asian Mining Congress Sustainability Award
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Concluding Remarks
Our Measure of SuccessEIS reviewed, with
commendationEIS approvedEnvironment Permit granted
Continue to have positive relationships with local communities, governments and scientific community
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Advantages to Seafloor Production
Limited social disturbance
Limited social disturbance
Reusableinfrastructure
Reusableinfrastructure
Minimal overburdenor stripping
Minimal overburdenor stripping
Minimal waste
Minimal waste
Increased worker safety
Increased worker safety
From 2006 Annual Report
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nautilusminerals.comTSX & AIM : NUS
A New Industry, Not Just a Projectp
www.cares.nautilusminerals.com
Dr. Samantha [email protected]
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Examples of Some of the Studies Conducted Biology Studies:
Macrofauna (incl., DNA studies) Benthic Habitat Assessment Bioaccumulation Bioluminescence
Existing Resource Utilisation Hazard and Risk Assessment Hydrodynamic Modelling:
Cutting Dewatering
Noise and Light Oceanography (12 mo) Sedimentation Rates (24 mo, ongoing) Sediment Chemistry Video Survey (>100,000 obs) Water Quality
Additional objective: science will also benefit from additional deep sea studies conducted to obtain data for the EIS
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Seafloor Communities – ACTIVE SITES
3 Main Habitat Zones at SW1 and SS
Alvinoconcha sp. – aka “Hairy Snails”
Infremeria nautilei – aka “Black Snails
Eochionelasmus ohtai – “Barnacles
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Seafloor Communities – DORMANT SITES
Keratoisis Stalked barnacles
Hydroids
No significant difference between samples taken from Solwara 1 and South Su (reference site) with respect to the numerically dominant species
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Advantages
Unutilised resource Create jobs – multiplier effect,
support industries Skills and technology transfer Low disturbance Little disruption of land holders Increased worker safety Royalties and taxes Education for PNG students
(e.g. Duke bursary) Community Development Fund
(voluntary)
Project Advantages - PNG
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Limiting the Impacts
Filter water prior to discharge
Dewatering discharge – 25 to 50 m above seafloor
Fast turn-around time (limit changes to water)
500 m exclusion zone (no collisions)
Fully enclosed ore delivery system (riser pipe)
Filter water prior to discharge (no chemicals)
Dewatering discharge – 25 to 50 m above seafloor
500 m exclusion zone recommended (no collisions)
Mineralised area
Legend