Nautilus Minerals has awarded a contract worth about UK£33 million to UK company Soil Machine Dynamics for the design and build of two Seafloor Mining Tools (SMTs) for its Solwara 1 Project in the territorial waters of Papua New Guinea.

The contract also allows for the UK company to provide a development update for the project.

Nautilus' CEO David Heydon says: "The placing of this first order is an historic step in the creation of a new industry and a major milestone for the Nautilus team, who continue to meet development timelines for the delivery of the Solwara 1 Project. Nautilus is on track to commence commissioning for mining operations by the third quarter of 2010, subject to PNG government approval.
'Significant steps have been taken in the design and build process for the three key components of the mining system. The SMT contract, which is the first of the three contracts, was awarded after a four month competitive tendering process that involved several other major offshore Remote Operated Vehicle (ROV) and mining equipment supply contractors.

'Nautilus chose SMD for the strength of its design and competitive approach. We look forward to working with the SMD team to deliver the world's first seafloor massive sulphide (SMS) mining tool."

Nautilus continues to make considerable progress in the delivery of the Solwara 1 Project. Recent focus has been on the tendering for the provision of the three key mining system components ' the Seafloor Mining Tool, the Riser and Lifting System (RALS), and mining services, including provision of the mining vessel.

The approach has been to first lock-down contracts for the SMT and the RALS. The mining services contract will then be awarded as the configuration of these subsea systems has bearing on the optimal surface vessel configuration that the mining contractor will be required to provide.

Nautilus expects to select the RALS design and build contractor shortly and the mining services contract will be finalized in the second quarter.

www.nautilusminerals.com