Nautilus Minerals shares post gains after undersea drilling results released

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Shares in Nautilus Minerals Inc. (TSXV:NUS) gained nearly 10 per cent Wednesday after the company reported drilling results from its Solwara project in the territorial waters of Papua New Guinea.

Shares in the undersea mining company were up 37 cents at $4.27 in early-afternoon trading on the TSX Venture Exchange. "The results of the drilling at our Solwara 1 project in the territorial waters of Papua New Guinea, demonstrate that we have a strong mineral system persisting at depth," Nautilus CEO David Heydon said in a release.

"This is in addition to the system of high-grade massive sulphide spires that are often 10 metres high above the system currently being drilled."

The bounce in the company's shares follows a sharp drop in their value last week when Nautilus Minerals said it failed to sign a detailed works contract with the company that was to build the ship it was going to use for mining, forcing the company to seek alternatives.

As a result of the collapse of the deal with Jan De Nul, the Vancouver-based company has taken over the offshore development aspects of its Solwara 1 project.

Nautilus had announced last year it had reached a heads of agreement with Jan De Nul with a view to formalizing a detailed contract by July 1. However, no deal was signed.

The company said its project development team will now deal directly with the suppliers of the specialized equipment required for mining and raising the ore.

In releasing its drilling results for Solwara 1 on Wednesday, the company said it has completed 29 drill holds for a total of 305.8 metres since drilling started on June 14. Between 70 to 90 holes are planned.

The results of the program are to be used for a mineral resource statement and for metallurgical and mine planning purposes.

The company also reported high-grade assay results at Solwara 8, where 12 surface samples averaged 16.9 grams per tonne of gold, 6.1 per cent copper, 32.5 per cent zinc and 328 grams per tonne silver.

Nautilus currently has a licence for exploration only and is undertaking an environmental assessment it hopes will land it a mining licence from the government of Papua New Guinea.

The company has raised US$300 million in the last year to undertake the world's first commercial undersea exploration for gold and copper off Papua New Guinea.

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