Nautilus setting JV to secure support vessels for Solwara 1 project

Shares in Canada's Nautilus Minerals (TSX:NUS), one of the world's first seafloor miners, climbed more than 10% on Monday as the company disclosed is negotiating the terms of an agreement with arm's length third parties that would involve the creation of a joint venture company.

The purpose of the new firm, Nautilus said, would be to fund the acquisition of the Production Support Vessel (PSV) that Nautilus had previously arranged to be procured through shipbuilder MAC Goliath.

In July, the Vancouver-based company announced that MAC Goliath Pte's had failed to pay part of a contract with the owner of the shipyard where the Nautilus's support vessel were being made.

Seafloor mining explained. . (Courtesy of Nautilus Minerals.)

Nautilus, which is in the last stages of developing its Solwara 1 gold, copper and silver project, off the coast of Papua Guinea, said the support ship would be used at that venture.

The miner, which also is developing another underwater project, off the coast of Mexico, secured in May $34 million from lender Deep Sea Mining Finance, to finish Solwara 1, which is set to become the world's first commercial deep-sea mine.

However, it lost support from Anglo American's (LON:AAL), which decided to divest its 4%-stake in Nautilus.

Environmental groups have criticized the project, which will use three robotic machines weighing up to 310 tonnes to mine copper and gold from extinct hydrothermal vents on the ocean floor.

Nautilus plans to then mix the ore with seawater to create a slurry, which can be drawn to the surface, stored and then put on other ships for transport. The extracted seawater is then pumped back to the seabed.

Nautilus' shares were trading up 10% in Toronto at 0.5 Canadian cents by 11:35 am Toronto time.