Exploration and resource drilling of seafloor massive sulfide (SMS) deposits in the Bismarck Sea, Papua New Guinea

Nautilus Minerals is the world leader in exploration and development of ocean seafloor massive sulphide (SMS) resources. The company is currently focused on exploration for new SMS resources in the South Western Pacific and its first development project, to recover high grade copper, gold and silver mineralisation from the Solwara 1 site in the Bismarck Sea, Papua New Guinea. Nautilus Minerals' business model is based on "aggregating" numerous high grade SMS systems and to sequentially develop them using a "floating" production system". The premise is in keeping with the Volcanic Hosted Massive Sulphide (VHMS) systems, which are known to occur in "camps", and has been supported by Nautilus' strong record of SMS discovery in the Bismarck Sea and in Tonga. The Solwara 1 mineralistion is outcropping for a strike length of 1.6 km along a ridge located at a water depth of 1,400 1600 metres below sea level. Since 2006, Nautilus has used Remotely Operated Vehicles (ROVs) to collect 116 mineralised samples and an approximately 15 tonne bulk sample from the outcropping mineralization. The Solwara 1 seafloor surface has been geophysically mapped in some detail using ship, deeptow, ROV and Autonomous Underwater Vehicle (AUV) mounted sonar systems (multibeam and sidescan). A proprietary electromagnetic system (OFEM) was successfully developed in collaboration with a partner, to map the near surface extent of conductive copper mineralisation at the site. In order to establish the extent and nature of deeper mineralisation, Nautilus has completed four drilling programs between 2006 and 2011. The initial 2006 campaign was based on traditional sea surface based drilling equipment and established that mineralisation at Solwara 1 is conductive and continues below the surface. In 2007, and late 2008, Nautilus deployed the world's first ROV operated seafloor drilling system. It enabled Nautilus to publish an independent, Canadian NI 43-101 compliant, resource estimate in early 2008. During a 2008 drilling program, Nautilus discovered buried mineralisation at Solwara 1 while drill testing OFEM anomalies proximal to Solwara 1 outcrop (the North Zone). Seafloor based drilling technology continued to develop. For a 2010/11 drilling program at Solwara 1, Nautilus focused primarily on drilling deeper because many of the 2007 drill holes had ended in high grade mineralisation. Other improvements include a larger diameter drill core to improve sample size; a wire-line drill string to drill deeper holes more efficiently; an improved casing capability to enable deeper holes; and an improved landing system to handle the rugged terrain better. The 2010/11 drilling program has increased the available geological knowledge at Solwara 1 and demonstrated continuity of high grade mineralisation in the North Zone plus another prospect in the Bismarck Sea (Solwara 12). To date, 294 drill holes have been completed by Nautilus Minerals in the Bismarck Sea for a total drilling length greater than 3250m. This paper provides an overview of Nautilus Minerals' most recent drilling project, the mineralisation it intersected and the evolution of drilling technology and operations between 2006 and 2011.