The Experience of Nautilus Minerals with regard to ...€¦ · March 2007 Workshop: April 2008 Sept...

1November 101November 2010© Nautilus 2010

TSX : NUS

AIM : NUS

The Experience of Nautilus Minerals with regard to

Environmental Management for a New Offshore Industry

Samantha Smith

INTERNATIONAL SEABED AUTHORITY

9 November 2010


Forward Looking Information and Disclaimer

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.

Material forward-looking statements and forward-looking information include, but are not limited to statements or information

with respect to the Company’s ability to locate, mine and transport ore from the seafloor; estimates of future production; the

method of transport and amount of ore from the Company’s Solwara project; estimates of anticipated costs and

expenditures; and development and production timelines.

We have made numerous assumptions about the material forward-looking statements and information contained herein,

including those relating to: the future price of copper, gold, silver and zinc; anticipated costs and expenditures; and our ability

to achieve our goals. Even though our management believes that the assumptions made and the expectations represented

by such statements or information are reasonable, there can be no assurance that the forward-looking statement or

information will prove to be accurate. Accordingly you should not place undue reliance on forward-looking statements or

information.

Forward-looking statements and information 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 or

information. "Risk Factors" are presented in the Company's most recent Annual Information Form, 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.

No information in this presentation shall constitute an invitation to invest in Nautilus or any entities of the Nautilus Group.

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.

http://www.sedar.com/


Outline

Introduction: The Nautilus Experience

Approvals Process

EIS Process and Approach to EIA

Learnings and Next Steps


THE NAUTILUS EXPERIENCE


World’s demand for metals continues to rise

Every human activity impacts on the environment

Land resources are stretched

A “new” concept

Why Go to the Sea?

Land-based mine Deep sea production

High tech, high grade, low volume,

low waste, small footprint


Nautilus is the first company to commercially explore for Seafloor

Massive Sulphide (SMS) deposits – HIGH GRADES of copper, gold,

zinc & silver

Minimal overburden

Smaller physical footprint than land-based counterparts

Minimal social disturbance

Seafloor Production Makes Sense


Introduction

First project: Solwara 1

Bismarck Sea

1600 m depth

30 km from nearest

coast

Small extraction area:

0.11 km20 20 40km

Konos

Namatanai

Rabaul

Kokopo

NEW BRITAIN

NEW IRELAND

SOLWARA 1 MLA 154

EL 1374

EL 1196EL 1196

EL 1374

BISMARCK SEA

PAPUA NEW GUINEA

BISMARCK SEA

LOCALITY MAP

NEW IRELAND PROVINCE

EAST NEW BRITAIN PROVINCE


Project Stages

Exploration

• What’s there? (Resource, Environment)

• Low Impact, similar to MSR activities

Feasibility

• EIS and Project Feasibility stages

• More detail Define Project, impacts and benefits

Extraction• High impact activities


Exploration

CTD/ Hydrocast

BLACK SMOKER

PLUM

Ship

Tow Yo

~20m asf

MAPRs x 3

PLUME

CTD, Neph, Eh,

Niskin bottles

SMS

MBES

Phase A: Target

Generation: Detailed

mapping, look for

chemical signatures

Phase B: Target Testing:

Remotely Operated

Vehicle (ROV): visual

survey of the seafloor and

rock sampling


Define the Project

1. Cut up ore on the seafloor.

2. Ore and seawater go up the pipe to the

ship.

3. Ore is separated from seawater on

board the ship.

4. Seawater is filtered and discharged back

to the deep sea (where it came from).

5. Ore is put onto a barge and taken to the

Port of Rabaul for temporary storage.

6. When there is enough ore, the ore is

picked up from the PoR by a bulk carrier

and taken to a pre-existing processing

plant overseas.

Seafloor Production Tools (SPTs)

Riser and Lifting System (RALS)

Production Support Vessel (PSV)


APPROVALS PROCESS


Legal Process

Mining Act 1992

Governs the exploration,

development, processing

and transportation of

minerals

Environment Act 2000

Outlines environmental

requirements of an activity

EIS takes into account

social considerations


EMP must be submitted and approved before operations can commence

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Environmental Management

APPROVALS KEY ENVIRONMENTAL WORK

ELAEL

MLA

ML

EIREISEPAEP

EMP

MRA DEC

PRODUCTION

EIA

BASELINE

ONGOING MONITORING

POST-CLOSURE MONITORING/REPORTING

TIME

CLOSURE

RELINQUISH LEASE

STAK

EHO

LDER

ENG

AG

ENM

ENT

EXP

LOR

ATIO

N


EIS PROCESS


EIS Objectives

Define the existing environment

Estimate impacts of the project to the environment

Develop strategies to minimise impacts


Early, transparent and

inclusive stakeholder

engagement

Inclusive multi-stakeholder

workshops Communities

World-renowned experts

Government

NGOs

Ongoing Community

Awareness and Consultations

Established CARES

www.cares.nautilusminerals.com

Nautilus Approach


EIS Process

Define Project

ID Potential Impacts

ID Studies for EIA and Baseline

Conduct & Write-up Studies

Recommendations for impact mitigation

strategies and monitoring

Review and Submit EIS

Complete EIS

ID Potential Stakeholders

Workshop: March 2007

Workshop: April 2008

Sept 2008

2007 – 2008

Workshop: Nov 2008

Marine scientists (incl deep sea), environmentalists, students, social

scientists, anthropologists, international and local NGOs, government, other

industry reps, etc.

Academics and consultants

Holistic approach with Academics and consultants

Academics and consultants, Nautilus held workshop, DEC engaged int’l consultant


Define the Project

1. Cut up ore on the seafloor.

2. Ore and seawater go up the pipe to the

ship.

3. Ore is separated from seawater on

board the ship.

4. Seawater is filtered and discharged back

to the deep sea (where it came from).

5. Ore is put onto a barge and taken to the

Port of Rabaul for temporary storage.

6. When there is enough ore, the ore is

picked up from the PoR by a bulk carrier

and taken to a pre-existing processing

plant overseas.

Seafloor Production Tools (SPTs)

Riser and Lifting System (RALS)

Production Support Vessel (PSV)


Identify Potential Impacts (note: cartoon only)


Identify Studies Needed

Biology Studies:

Macrofauna (incl., DNA/genetic studies)

Benthic Habitat Assessment

Bioaccumulation

Bioluminescence

Existing Resource Utilisation

Hazard and Risk Assessment

Hydrodynamic Modelling:

Cutting

Dewatering

Noise and Light

Oceanography (12 mo, full column)

Sedimentation Rates (36 mo, ongoing)

Sediment Chemistry

Video Survey (>100,000 obs)

Water Quality

Additional objective: science will also benefit from additional deep sea

studies conducted to obtain data for the EIS

Time Lapse

Camera

Sediment

Trap

Hard Substrate

Sampling

Soft Substrate

Sampling


Achieving Independence

Independent

researchers

Freedom to publish

Independent reviewers

Transparency EIS on website

• Duke University

• Scripps Institution of Oceanography

• University of Toronto, Canada

• WHOI

• CSIRO, Australia

• Hydrobiology, Australia

• University of Papua New Guinea

• Coffey Natural Systems, Australia

• Rabaul Volcano Observatory, PNG

• Asia Pacific Applied Science

Associates (APASA), Australia

• Australian National University

• Curtin University of Technology,

Australia

• James Cook University, Australia

• Charles Darwin University, Australia


Report Facts

Provide expertise (in their area of expertise)

Decide studies with other stakeholders including government

Design and Conduct Studies

Review EIA

Suggest Management Strategies

Role of Scientists


Limiting the Impacts

Reference Site

(S Su)

Temporary Refuge

Areas

Animal relocation

Artificial substrates*

EL 1196

MLA 154

SOLWARA 1

Solwara 5

North Su

South SuSolwara 9a

Solwara 9b

Mining Lease Application

Existing Exploration Licence


Community Awareness

Major focus


Coastal, Shallow- and Mid-Water Environment

Issues raised during previous

community consultations:

Protect marine environments:

• Reefs and fisheries

• Whales, sharks and turtles

Nautilus response:

“Engineer out” impacts to surface waters:

• No extraction impact shallower than

1300 m water depth at Solwara 1

(below where tuna, etc live)

Only impact to surface waters:

presence of vessel, supporting

vessels and riser pipe


Limiting the Impacts

Filter water prior to

discharge

Dewatering discharge –

25 to 50 m above

seafloor

Fast turn-around time

(limit changes to water)

500 m exclusion zone

(no collisions)

Fully enclosed ore delivery

system (riser pipe)

Filter water prior to

discharge (no chemicals)

Dewatering discharge – 25

to 50 m above seafloor

500 m exclusion zone

recommended

(no collisions)

Mineralised area

Legend


Supporting Education

Since 2007, three PNG Nationals have

been awarded the opportunity to study

at Duke University (USA)

Learn state-of-the-art techniques under

supervision of world renowned deep

sea biologist Dr Cindy Lee Van Dover

Deep Sea Marine Science seminar at

the University of PNG

Initiative short-listed for Asia Mining

Congress Sustainability Award


Concluding Remarks

Our Measure of Success

EIS reviewed, with

commendation

EIS approved

Environment Permit granted

Continue to have positive

relationships with local

communities, governments and

scientific community


NEXT STEPS:

ENVIRONMETNAL

MANAGEMENT AND

MONITORING PLAN(S)


EMP

Required under Papua New Guinea legislation

Identified impacts, brought in external experts to ID

studies, carry out studies and recommend mitigation

strategies, monitoring programs, etc.

Will continue inclusive, multi-stakeholder, proactive,

transparent approach


Learnings/Reminders

Not a “one size fits all” solution to EMP design

(Site Specific? Project specific?)

Impacts will depend on: extraction rate, mode

of extraction

Need provision for (realistic) adaptive

management

Reference area needs to have same/similar

conditions as impacted area (biota, nat.

variations)


Experts need to work within their area of

expertise but...

There needs to be a holistic understanding of

the environment and issues

Efforts to minimise impacts (eg plumes,

greenhouse gas emissions)


Exploration area ≠ Extraction area –

• There’s a chance plume won’t go outside claim area

(should this be taken into account when

selecting/sizing APEIs? Also currents?)

APEI area relative to the size of impact?

What if APEI is:

not representative of area that is impacted?

the most prospective ground?


Solwara 1: Proposed

Extraction Site

North Su: Active

Subsea Volcano

South Su: Proposed

Reference Site (not to

be extracted)

EL 1196

MLA 154

SOLWARA 1

Solwara 5

North Su

South SuSolwara 9a

Solwara 9b




Non-representative

area set aside

EL 1196

MLA 154

SOLWARA 1

Solwara 5

North Su

South SuSolwara 9a

Solwara 9b



Reserve Area


No commercially-

viable areas left

EL 1196

MLA 154

SOLWARA 1

Solwara 5

North Su

South SuSolwara 9a

Solwara 9b



Reserve Area


Monitoring

Developed several testable

hypotheses with international

experts

Monitoring requirements as

required by government

Monitoring requiring ROV will

occur during scheduled

maintenance rotations no

loss to production

Will work commitments into

mine plan


THIS FORUM


What are the Goals?

Support development of resources

Commercially viable*

Technologically achievable

Ensure responsible environmental management

Minimise impacts to the environment

Maintain biodiversity and overall ecosystem health

and function

What do we need to achieve this?

A Single Environmental Management Plan? – or –

Over-arching Guidelines and Principles?


Questions

Who will do the work on the APEIs to find out what

is there and if they are representative?

Is a contractor likely to go into (spend money in) an

area that has been “sterilised”?

“Adaptive APEIs” – does this increase or decrease

risk? For the contractor? For the environment?

“Nice to Haves” vs “Need to Haves”?

Continual Improvement?

Artificial substrates?

What proportion of lease area is typically covered in

nodules?

Can APEIs be established sequentially?


What has been done before?

ISA guidelines

IMMS code

Gorda Ridge EIS

Solwara 1 EIS

DSTP Guidelines

InterRidge Guidelines

International Maritime

Legislation

etc.

What do we know?

What are the gaps?

Seek independent

expert advice to help

fill gaps


What Makes Good Minerals Policy Framework?

Clear guidelines, timelines

Transparency

Consistency

Efficiency

Benefits justify risk(s)

Environmentally and Socially

responsible

Economically viable

Independence of reviewers

Agreement from governing body/ies and

affected stakeholders

Provision for Adaptive Management


nautilusminerals.com

TSX & AIM : NUS

A New Industry, Not Just a Project

p

www.cares.nautilusminerals.com

Dr. Samantha Smith

[email protected]

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