Nautilus Minerals advises that it is in dispute with the Independent State of Papua New Guinea (the State) as to the parties’ obligations to complete the Agreement entered into on 29 March 2011. Nautilus has initiated the dispute resolution process provided for in the Agreement, which may lead to a referral of the dispute to arbitration if it can not be resolved through further discussions amongst senior representatives of the parties over an initial 10 day period.
The State exercised its option under the Agreement to acquire a 30% interest in the Solwara 1 Project through its nominee, a subsidiary of Petromin PNG Holdings Limited. However, the State asserts that Nautilus has not met certain obligations on which completion is dependent, and that Nautilus has breached the Agreement. Nautilus refutes these assertions.
As previously disclosed, under the Agreement the State’s nominee (Petromin subsidiary) must pay (among other amounts) its share of costs incurred in the development of the Project up to completion to acquire its Project interest. Unless and until the dispute is resolved, completion will be delayed or may not occur and Nautilus must continue to carry these costs. This may lead to Nautilus needing to slow or defer the build program for Project equipment, which would have consequential impacts on the scheduled commencement of operations and overall Project costs.
Nautilus will provide a further update, including as to any slowing or deferral of the build program, in due course following any further developments.
[mappress] Subsea World News Staff, June 04, 2012; Image: Nautilus Minerals