Nautilus Minerals Signs Offtake with Tongling for Solwara 1

Nautilus Minerals (TSX:NUS,OTCQX:NUSMF) has signed a new Master Ores Sales and Processing Agreement with  Tongling Nonferrous Metals Group for material from its Solwara 1 deposit in the Bismarck Sea of Papua New Guinea. This build on an earlier heads of agreement signed with Tongling.
As quoted in the press release:

Compared to the HOA, the terms of the MOSPA offer significant cost savings and reduced business risk to Nautilus, whilst giving Tongling the freedom to process the Solwara 1 material in a manner which optimizes its return. The MOSPA has simplified the arrangements between the parties in many respects and it now operates as a more conventional material sales agreement where Tongling will pay Nautilus for a fixed proportion of copper, gold and silver in the mineralized material.
The copper payment will be for 95% of recoverable copper as determined by locked cycle testwork on samples of shipments. The gold payment is fixed at 50% of the contained gold in the mineralized material which represents a premium payment for gold compared to the HOA. Payment for silver is fixed at 30% of contained silver in the mineralized material. The Asian international copper concentrate benchmark will still be used as the basis for smelter treatment and refining charges related to the recoverable copper.

Nautilus CEO Mike Johnson said:

This new agreement provides improved terms for both Nautilus and Tongling and can be truly described as a “win-win” outcome. The MOSPA gives greater flexibility to Tongling with respect to its operations, while providing Nautilus with certainty and an improved Net Smelter Return. I am delighted to be continuing our relationship with Tongling as a key business partner supporting the development of the world’s first Seafloor Massive Sulphide mining project.

Click here for the full press release.