MAC Gets $10 Mln Nautilus Deposit

Nautilus Minerals has pre-paid US$10 million of the US$18 million charterer’s guarantee that was to be provided to Marine Assets Corporation (MAC) on the start of the charter of the vessel, which is to be first deployed for use at the Company’s Solwara 1 Project.

Under the terms of the Company’s vessel charter agreement with MAC, the Company agreed to pay MAC a US$10M deposit after the contract for the construction of the vessel between MAC and Fujian Mawei Shipbuilding Ltd (Shipbuilding Contract) became effective by the payment of the first installment in late November 2014.

In December 2014, it was discovered that the Company and MAC had been victims of a cyber attack by an unknown third party and as a result, the Company paid the Deposit to a bank account which it believed to be MAC’s, but which MAC has advised was not its account.

The matter was promptly referred to the police authorities in the relevant jurisdictions and an investigation is underway. The Company has also engaged a cyber security firm to ensure the ongoing security of its and MAC’s networks and to investigate the source of the cyber attack. MAC and the Company are co-operating with each other and the authorities to facilitate the timely resolution of the investigations.

In the circumstances, the Company has agreed to pre-pay US$10M of the charterer’s guarantee on the basis that: the remaining US$8M of the charterer’s guarantee will be provided to MAC by the Company on the start of the charter of the vessel; and the parties have agreed to determine how to proceed in relation to the Deposit following the conclusion of the investigations, which may take some months.

In the meantime, the construction of the vessel continues in accordance with the terms of the Shipbuilding Contract and the Company continues to progress all aspects of the Solwara 1 Project, so that it can achieve its goal of making seafloor mining a reality by early 2018.