Nautilus hits massive sulphides in sea floor

Vancouver – Significant massive sulphide intercepts are helping Nautilus Minerals (NUS-V) regain some ground lost earlier in the week when development partner Jan De Nul backed out of an agreement to build the ship Nautilus needs to realize its goal of mining the ocean floor.

Nautilus has completed 29 holes of a 90-hole drill program designed to test the mineralization at depth around one of their target sites, outside of the high-grade massive sulphide volcanic vents that drew the company to the area. The 29 holes add up to 306 metres of drilling, with average massive sulphide core recovery of 72%.

Hole 64 hit 18.2 metres of massive sulphide, while hole 56 intercepted 17.9 metres. Almost 40% of the holes drilled to date terminated in massive sulphide. Assay results will be available in four to six weeks.The news brought Nautilus up 30 to $4.20 in July 11^th trading.

Nautilus holds 7 exploration licences in the Bismarck Sea off the coast of Papua New Guinea, which are collectively named the Solwara project. Solwara hosts seafloor deposits, at depths of up to 1,700 metres, of precious and base metal-rich massive sulphides formed from recently active volcanic vents or black smokers.

Recent drilling shows that the ocean floor geology around the smokers is relatively consistent. A fine-grained sediment layer typically 1-metre thick sits atop a chalcopyrite-rich massive sulphide ore zone, followed by a highly altered clay-pyrite-anhydrite footwall.

Nautilus also released assay results from surface samples from the nearby Solwara 8 site, which lies between 1,680 and 1,750 metres below the oceans surface. The preliminary results showed strong silver, gold, copper, zinc, and lead grades.

Nautilus has raised more than US$250 million through a series of financings over the past several months. A number of senior companies, wanting a stake in this attempt to open a new arena for mining, have bought into Nautilus. Anglo American (AAUK-Q, AAL-L) has a 6.4% interest, Teck Cominco (TCK.B-T, TCK-N) holds 5.8% and privately held Epion Holdings owns 16.8%.

Nautilus hit a road bump in early July when Jan De Nul backed out of a heads of agreement from October 2006 that would have led to the Belgian company constructing a 191-metre vessel to serve as a mining platform. As Jan De Nul was to have borne the costs for the vessel, the news placed the major capital item onto the shoulders of Nautilus. Nautiluss share price dropped 25% in the three days following, to $3.90 from $5.19.