1. Contribution of the private sector to the development of
a sustainable DSM industry in support of P-SIDS Blue
Economy
Paul Taumoepeau & John Parianos (TOML)
PACIFIC SMALL ISLAND DEVELOPING STATES REGIONAL TRAINING
AND CAPACITY BUILDING WORKSHOP ON DEEP-SEABED MINING
NUKU’ALOFA, KINGDOM OF TONGA
12-14 February 2019
2. • All information of a scientific or technical nature contained in this Presentation has been reviewed and approved by Mike Johnston, President and CEO of Nautilus Minerals Inc.
(the “Company” or “Nautilus”), who is a qualified person under National Instrument 43-101.
• This Presentation may contain forward-looking statements within the meaning of the United States Securities Exchange Act of 1934 and forward-looking information within the
meaning of applicable Canadian securities law (collectively “forward looking statements”).
• Material forward-looking statements include statements or information with respect to the Company’s plans and ability to locate, mine and transport mineralized material from
the seafloor; any estimates of or expectations regarding anticipated costs and expenditures; additional funding requirements and the Company’s capital raising strategy and
plans; the revised work program and the timing of delivery and effectiveness of the seafloor production tools, the riser and lifting system and the production support vessel
(collectively the “Seafloor Production System”); and expectations regarding the advantages of seafloor mining over terrestrial mining.
• We have made numerous assumptions about the material forward-looking statements contained herein, including assumptions relating to the future price of copper, gold,
silver and zinc; that anticipated costs and expenditures will be as planned; that the remaining key components of the Seafloor Production System will, if funded, be built on
schedule and in accordance with Nautilus’ specifications; and our ability to achieve our goals. Even though our management believes that the assumptions made and the
expectations represented by such statements are reasonable, there can be no assurance that the forward-looking statements will prove to be accurate. Accordingly you should
not place undue reliance on forward-looking statements.
• Forward-looking statements by their nature involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from
those described in forward-looking statements. "Risk Factors" are presented in the Company's most recent Annual Information Form and subsequent disclosure documents,
available on SEDAR (www.sedar.com). Except as required by law, we undertake no obligation to update forward-looking statements and information as conditions change.
• As discussed in the Company’s disclosure documents under the headline “Risk Factors”, the production decision for the Solwara 1 Project was not based on a preliminary
economic assessment, pre-feasibility or feasibility study of mineral reserves demonstrating economic and technical viability. Accordingly, there is increased uncertainty and
economic and technical risks of failure associated with this production decision. Production and economic variables may vary considerably due to the absence of a completed
and detailed analysis as would be included in a feasibility study.
• Nautilus requires significant additional funding to advance the Solwara 1 Project towards production. There can be no assurance that the Company will be able to obtain at all
or on acceptable terms the remaining financing necessary to fund the completion of the build and the deployment of the Seafloor Production System. If such financing is not
obtained in the near term, the Company will be required to further slow or halt the development of the Seafloor Production System, which may result in the suspension or
termination of the Solwara 1 Project and the Company's operations.
• This Presentation does not constitute an offer to sell or a solicitation of an offer to buy any Nautilus securities. Neither Nautilus, nor any entities of the Nautilus Group, nor their
respective officers, employees or agents, shall be liable for any loss, damage or expense however caused (including through negligence) which you may directly or indirectly
suffer in connection with this Presentation including, without limitation, any loss of profit, indirect, incidental or consequential loss.
• This information is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information.
• While efforts are made to keep the information in this Presentation accurate and timely, neither Nautilus nor any of the entities of the Nautilus Group guarantee or endorse the
content, accuracy or completeness of the information herein. You are referred to the Company's documents filed on SEDAR.
• All graphics, effects, processes, information and data in this Presentation are owned or used under license by Nautilus. Any reproduction or dissemination, in whole or in part, is
strictly prohibited.
Disclaimer and Legal Notice
3. Agenda
Nautilus Minerals, Nautilus Minerals Tonga
and TOML
Polymetallic Sulfides within Tongan waters
Polymetallic Nodules in International waters
Capacity Building & Developments over Time
5. Agenda
Nautilus Minerals, Nautilus Minerals Tonga and
TOML
Polymetallic Sulfides within Tongan waters
Polymetallic Nodules in International waters
Capacity Building & Developments over Time
6. Tongan Polymetallic Sufides
Tonga
bulge
“Potsdam Potato” (exaggerated)
Illustrates the difference between the
earth’s surface and an ideal sphere –
between Philippines and Tonga there is
the biggest bulge in the world due to
record plate subduction!
dent Tonga:
Has some of the fastest subduction
in the world.
As the earth stretches to
accommodate, this very interesting
tectonics attract researchers from
all over the world.
Like elsewhere in the bulge, the
region is also known to have rich
copper and gold, but so far no one
has found something they could
mine.
Nautilus have over 40 targets and prospects in Tonga
7. Sulphide Mound at Niua
Massive Sulfide sampled from ~30m high mound in
centre of caldera with assays up to:
7.3% Cu, 13.7% Zn, 22.4 g/ton Au; 267 g/t Ag
9. Agenda
Nautilus Minerals, Nautilus Minerals Tonga and
TOML
Polymetallic Sulfides within Tongan waters
Polymetallic Nodules in International waters
Capacity Building & Developments over Time
10. Tongan Polymetallic Nodules
• The developing state contractor…
• Significant developments relating to Nodules, through contributions to:
a. Mineral Resource
b. Geological Understanding
c. Environmental Survey
d. Mining System
Some examples follow
11. World First: Measured Mineral Resource Estimation
Also first NI 43-101 revived use of images (calibration etc)
12. Integration of structure, morphology, sediment, surface productivity
Also refined classification, improved genetic model,
New details on physical and chemical attributes
13. Nodules Mining System – Cheaper and Cleaner
(a) Concentrate on
the seabed – small
boat
(b) Reclaim
from seabed –
big boat
(c) Lift to surface –
reduced power
(d) Surface
vessel – big boat
Plan view
Section view
Includes most of system engineering and peer review
14. Selected providers
Deep Reach Technology Inc.
Sound Ocean Systems Inc
Residue Solutions
JHA
Vessel study Lift system dynamics Process metallurgy
Pilot scale concepts
Working equipment and past trials
15. Agenda
Nautilus Minerals, Nautilus Minerals Tonga and
TOML
Polymetallic Sulfides within Tongan waters
Polymetallic Nodules in International waters
Capacity Building & Developments over Time
16. • Conducting Talanoa in Tonga increases the knowledge within the community regarding DSM
issues and specific processes
• Comments from our Talanoa in Tonga shows that deep seabed mining is generally positively
received, and seen as:
– a potentially important source of wealth & benefits for the country;
– presenting excellent employment & economic opportunities for Tongan nationals, who
have a strong historical and present maritime heritage;
– allow Tongans access to state of the art and emerging new technology; and
– environmental impact is widely seen to be manageable.
• There is also widespread interest in exploration activities undertaken and that appropriate
rules & regulations govern deep seabed mining.
16
Capacity Building & Developments over Time
Year
Total
Talanoa
In
office
Outside
office
Outer Isl
Talanoa
Talanoa Locations
Total
Attendee
Ave
Attendee
No. Issues
&
Comments
2008 8 7 1 0 Tongatapu 29 3.6 6
2009 22 15 7 0 Tongatapu 101 4.6 28
2010 40 22 18 0 Tongatapu 1,302 32.6 142
2011 14 8 6 5 Tongatapu, Vavau & Eua 598 42.7 75
2012 17 10 7 2 Tongatapu, Haapai 290 17.1 84
2013 14 7 7 0 Tongatapu 257 18.4 128
2014 26 7 19 0 Tongatapu, Jamaica,
Australia
584 22.5 321
2015 37 22 15 2 Tongatapu, Vavau, Australia 1,086 29.4 533
2016 34 15 19 5 Tongatapu, Vavau 765 22.5 274
2017 34 7 27 4 Tongatapu, Niuatoputapu 767 22.6 208
2018 26 2 24 0 Tongatapu 664 25.5 107
2019 Tongatapu
272 122 150 18 6,443 23.7 1,906
Talanoa at a boarding school
17. 17
Capacity Building & Developments over Time
Talanoa in Eua (outer island)
Talanoa with Church Leaders & officials, Vavau (outer island
Talanoa in Tongatapu (the main island)
18. Jumpers being recovered in Tonga, 2018
18
Capacity Building & Developments over Time
Cruise location Cruise type
2008 2009 2011 2012 2013 2015 2017 2018 2019
Nor Sky 41 Tongan waters NM
DEA Surveyor 33 Tongan waters Teck
Kilo Moana 12 28 Tongan waters MSR/NM
Thomas G Thompson 16 Tongan waters MSR/NM
Southern Surveyor 12 56 Tongan waters MSR/NM
Roger Revelle 18 Tongan waters MSR/NM
Mt Mitchell 55 Int. waters TOML
Yuzmorgeologiya 96 Int. waters TOML
Gelendzhik 3 Int. waters TOML**
Kiu Nia II 4 Tongan waters NM
Sonne 47 Tongan waters MSR/NM
Total Days per year 114 56 28 18 55 96 3 4 47
Days for NMT & TOML 154 267 421
Teck - Teck Cominco
TOML** - TOML side cruise (short collaboration with another contractor) in CCZ, in International waters
MSR - Marine Scientific Research
Research Vessel
NMT Cruises TOML Cruises
Exploration Work & Samples Taken in NMT & TOML Projects with Tonga
NMT Cruises
MSR/NM - MSR cruise with NM, in Tongan waters
TOML - TOML cruise in the CCZ, in International waters
Explanatory Notes, Days Offshore Table:
NM - Nautilus Minerals
19. 19
Capacity Building & Developments over Time
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
TMPI, Ministry of Education & Training 5,863 23,258 4,050 4,242 6,685 78,872 - 5,900 3,000 - 131,870
EcoCARES: School Science Competition 10,000 2,100 11,950 8,500 10,000 5,027 6,506 2,100 - 56,183
Secondary School Science Textbook Prizes 5,160 4,884 4,871 5,270 5,047 25,232
Ministry of Health: Dental Section 20,000 20,000 19,954 20,000 19,730 14,679 18,558 10,035 - - 142,955
Ministry of Health: Casualty and A&E - 16,533 18,466 7,971 8,000 9,612 13,500 4,134 4,886 83,101
Ministry of Health: Ambulance Service - 8,000 7,681 9,000 10,125 4,714 - - 39,520
YiB & Eqpmt for Educational Institutions 8,998 8,907 10,000 9,890 - - - 37,795
*Atenisi Foundation for Performing Arts 10,000 10,000
*Ministry of Health, Niu'ui Hospital 10,000 10,000
TOTALS 35,863 63,258 42,637 71,656 59,474 130,551 58,372 45,539 14,105 10,156 5,047 536,658
NB:
1. * The Atenisi and Niu'ui projects were one-off projects
2. The funding is evaluated during the annual budget process, therefore Nautilus cannot guarrantee programmes will be funded every year.
Total Spent
ACTUAL SPENT ON NMT & TOML CAPACITY BUILDING PROGRAMMES, TOP$
Capacity Building Programme to TMPI / Fokololo oe Hau - Fire Fighting Simulator being used by students for first time in 2015 - opening day.
20. • CCZ Megafauna logging: Have trained 5 Tongans to date. Opportunity for other
contractors to use this skill-set.
• Management at sea: Trained and promoted the first female Polynesian (probably)
Lead Scientist then Chief Scientist (acting). These were on cruises to the CCZ and
in PNG waters. But unfortunately not in Tonga YET.
• At sea training: ~16 Tongans plus 2 other developing country scientists funded to
join deep sea exploration work in CCZ and Tongan waters (also roughly 20 others in
PNG waters.
20
Capacity Building & Developments over Time
Left: Tonga Govt geologist on Tongan exploration cruise Right: Fokololo (Maritime Institute) students at sea.
21. Six facts about Tonga*
1. 99% literacy
2. Population: 106,000 in Tonga and roughly an
equal amount live overseas
3. Remittances home were 55% of GDP in 2004,
but these have been falling since the GFC
4. Little absolute poverty
5. Transition from absolute monarchy to
democracy largely complete and peaceful
6. Decreasing communicable diseases but
increasing rate of illness related to obesity
* Statistics all from WHO Country Health Information Profile 2011
22. Tonga’s Modern Marine Mining Regulations
• Major projects require independently
verified EIS
• World class marine mining legislation
almost complete; based on a regional
initiative (RLRF)
• Developed with DSMP and SOPAC
• Has had major input from NGOs, industry
and other stakeholders
• Meets or exceeds many of the standards
behind EPIII
• RLRF: Regional Legislative and
Regulatory Framework; issued
August 2012
• DSMP: Deep Sea Minerals Project,
funded for SOPAC by the EU
• SOPAC: Applied Geoscience and
Technology Division of the SPC:
Secretariat of the Pacific Community
• EPIII: Draft of the updated Equator
Principles as of August 2012
23. A Role for Skilled Tongans
• Well educated population (the most
PhDs per capita*)
• Tongans with skills tend to migrate
overseas
• Approximately 2,000 graduates leave
secondary school each year
• Issue: retention of experienced middle
management staff
• Long term goal: create more
employment options for more Tongans
locally
*http://en.wikipedia.org/wiki/Education_in_Tonga#cite_note-ilab-1
24. Conclusion
• Opportunity for deep sea minerals to
make a significant contribution to a
developing nation
• Sulfides and nodules both exciting
• Tonga is the developing nation contractor
• Tonga:
– World-class legislation
– Well-educated population
– Population needs opportunities
• Nautilus has developed industry best
practise in social and environmental
management
• Great deal of future potential