Eda Kopa Limited has filed a claim of K163 million against Nautilus Minerals Limited for failing to meet its funding obligations of the Solwara 1 Project.
In a statement, Chairman of Kumul Minerals Holdings Limited, Peter Graham, said the Project has stalled with a substantial proportion of the development work still to be undertaken.
The claim has been filed under a Canadian court supervised creditors process initiated by the parent company of its joint-venture in the Solwara 1 Project, Nautilus Minerals Niugini Limited.
Graham said Eda Kopa contributed K375 million in 2014, representing its full share of all project construction and development costs, both past and future, for its 15 percent interest.
Eda Kopa funded its contribution by a loan from Bank South Pacific that was guaranteed by the State.
However, project manager and joint-venture partner, Nautilus PNG, has not been able to meets its funding obligation of 85 percent of the project and, as a result, the Project has stalled with a substantial proportion of the development work still to be undertaken.
Graham said Eda Kopa has made claim for K163 million, the portion of its contribution relating to the stalled development work.
“While the prospects of creditors achieving any meaningful recovery appears low, this claim has also been filed in an effort to preserve Eda Kopa’s rights and position.”
In February 2019, the Canadian listed parent company of Nautilus PNG, Nautilus Minerals Inc, sought protection from its creditors under the court supervised Companies’ Creditors Arrangement Act process and initiated a sales and investment solicitation process to restructure its business and financial affairs.
The SISP was terminated in June 2019 and Nautilus and its principals are now directing their efforts towards reaching an agreement with creditors under the CCAA with a view towards potential restructure of Nautilus’ various projects and assets.
Eda Kopa’s claim has been made in accordance with this process.
Graham said while Eda Kopa has been patient in its dealings with Nautilus as that company has undertaken various efforts to secure funding, Eda Kopa now feels compelled to make the claim and take such action to best protect the State’s interests.
The Solwara 1 Deep-Sea Mining Project is a venture to mine polymetallic sulphide deposits located on the seabed in an area approximately 50km north of East New Britain and 30km west of New Ireland Province.