Anglo investing US$25 million in Nautilus

Vancouver – Nautilus Minerals (NUS-V, NUSMF-O) plans a US$68.5-million financing and has lined up mining giant Anglo American (AAUK-Q, AAL-L) to take down 36.5% of the deal.

The major is committing US$25 million to the non-brokered private placement that will see a planned total of 22,833,334 shares issued at US$3.00 apiece.

Nautilus gains a significant financial and technical partner for its planned development of the Solwara seabed sulphides located off the coast of Papua New Guinea. It recently entered into an agreement with Belgium-based marine engineering firm Jan De Nul Group to construct a 191-metre specialized mining vessel.

Anglo American, one of the world’s largest mining companies with a market capitalization of about US$66 billion, has been also been granted a two-year anti-dilution right to maintain its percentage ownership in Nautilus.

Nautilus had been previously been partnered with Barrick Gold (ABX-T, ABX-N) subsidiary Placer Dome, which spent about US$12.2 million toward earning a 40% joint venture interest. In mid-2006, Barrick elected to convert the interest into a 9.59% equity stake in Nautilus.

The seafloor metal deposits formed by “black smokers”, which are hydrothermal, chimney-like structures formed when ocean water is circulated through porous rock in an active volcanic zone and metal-sulphide minerals are dissolved and then redeposited into sizeable accumulations. These occurrences are essentially the modern day version of the well known volcanogenic massive sulphide (VMS) deposits that are mined throughout the world.

Shares of Nautilus rallied on TSX Venture board trading, up 80 or about 40% to the $2.70-level on strong volume. The company currently has 49.9 million shares outstanding, giving it a $135-million market capitalization. After the proposed financing, Anglo would hold about 11.5% of the estimated 72.7 million shares outstanding.