Nautilus Minerals* (NUS : TSX : $0.41), Net Change: -0.31, % Change: -43.06%, Volume: 1,906,483
Jumping ship. Shares of Nautilus Minerals were down sharply after the company announced that it terminated the construction of equipment for its Seafloor Production System. The reason for the decision was to preserve the company’s cash position as the company is currently in a dispute with the Independent State of Papua New Guinea over funding obligations for the project.
Nautilus believes that the State has a contractual obligation to pay an amount of approximately $23.5 million in respect of costs incurred in the development of the Solwara 1 Project up to January 2011, and to make pro-rata capital contributions in respect of subsequent Project development costs which, at the end of September 2012 totalled approximately $51.5 million (excluding interest). The State disputes that it is required to meet such obligations at this time. In order to continue the construction of the Seafloor Production System, Nautilus has been forced to carry the State's share of project development costs to date. The company noted that all of the relevant supplier agreements contain provisions for termination without penalty. Nautilus has also been forced to reduce staff numbers with approximately 60 positions to be made redundant.