Nautilus Minerals, one of the world’s first seafloor miners, officially went bankrupt this week, its court-appointed monitor, Price Waterhouse Cooper reported.
Nautilus filed for protection from its debts in a Canadian Court in February 2019. The company tried to restructure but it failed to find any buyers for its assets. In August 2019, court approval was obtained for creditors to liquidate the company to get back a fraction of what they were owed.
In the process, Nautilus has left the Papua New Guinea government facing a debt equivalent to one-third of the country’s annual health budget
The Vancouver-based company was trying to develop its Solwara 1 deep sea gold, copper and silver project, off the coast of Papua New Guinea (PNG), but the project was plagued with community opposition and financial setbacks.
In June, the owner of the shipyard where the company’s support vessel was being made said it had cancelled the contract with the supplier chosen to build its ships after Nautilus failed to pay the third installment of the contract price — $18 million before interest.
Local communities opposed to Nautilus’ Solwara 1 project in their seas are still opposed to the project, and there are still legal cases in the PNG court system.
In the process, Nautilus has left the Papua New Guinea government, which still owns a 15% stake in the Solwara I project as well as equipment, facing K81.5 million ($24 million) in debt.
“The two main shareholders – MB Holding and Metalloinvest – have effectively taken control of this ‘new’ Nautilus at the expense of major creditors and hundreds of small shareholders,” Andy Whitmore, advocacy officer, Deep Sea Mining Campaign, said in a press release.
Court papers noted that Nautilus had two distinct business units, one dealing with polymetallic nodules, and one dealing with seafloor massive sulphides, which includes the Solwara 1 project in PNG. It is therefore unclear which, if either of the business units, the new company will concentrate on.
“Nautilus gave the impression that the new company was ready to roll. But it has been over a month since the confirmation and there’s been no other information on what Nautilus’ new plans will be,” Whitmore said.
Nautilus stated in court papers that once liquidation occurs, there may still be a buyer for at least some of the new company’s assets.
A PNG Business News report suggests the new Nautilus has applied to the PNG Mineral Resources Authority to vary the existing mining lease.
When Nautilus was removed from the Toronto Stock Exchange as part of the bankruptcy proceedings, it moved to unregulated trading, with a recent spike in buying.
At market close Tuesday, Nautilus Minerals’ shares had been traded 310,769 times on the OTC, with the stock priced at a penny.
