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Re-Evaluating My Position
#1

Every now and again I'll take a hard look at a position I have.  Recently I did this for Nautilus and even though I am 'under water' on it, I still think that Nautilus will reward longs at First Ore.

When Nautilus is able to extract ore then the concept will be proven and a lot of mining companies (and potentially non-mining companies -- i.e. Lockheed Martin) will be standing in line to buy Nautilus.  Here's why:  if some people decide on the day Nautilus has first ore that they want to get into the subsea mining business then they will need to:

  • Create a company and staff up
  • Explore areas and do bathymetric work (1+ year?)
  • Decide on an area and come up with an environmental plan and obtain mining permits (1-2 years?)
  • Build equipment and ship (3 years)

I doubt that PNG will let someone come in and compete with PNG's own interests... Plus, I think Nautilus has most if not all the exploration permits for PNG.  So, that leaves water controlled by a country other than PNG.  Building a new relationship will also take time.

Even if First Ore is inefficient or there are issues, the 'genie will be out of the bottle' because the idea will be proven... and will only be made better over time.

So, I think the only thing that would make sense is to pull out the checkbook and get prepared to write a lot of zeros.

Any thoughts or opinions?

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#2
Current problem is the further financing of this lovely enterprise.
I am still completely surprised that only one person asked questions at the conference call.
If I had known I would have asked the question how are they planning to finance the two years until start of production.
IMHO the stock price will not take off until that problem is solved.
And I do not like the downswings in the moment
It started with the yearly report indicating they need a lot of more money until they go to production.
For me not a surprise at all
It's the white elephant in the room
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#3
Indeed, funding to take Nautilus through First Ore will be necessary -- I don't discount this at all. I do think that funding will become easier to obtain rather than harder as the ship, equipment build and timeline progresses.

When I reevaluated my situation, I had to weigh the short-term (anything before First Ore) vs. the long term. Even though the current price makes me sick, I always come back to the idea that Nautilus can be vastly higher in 3 years time. I can't see too many solid opportunities 'out there' like this at this time.
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#4

The PNG government already has a lot invested in Solwara 1. I think it is almost certain they will buy in to all three 5% increments going forward, starting in June. There is no indication at all that Nautilus isn't going to be successful compared to when PNG invested in the past. Nautilus has hit a lot of milestones with equipment over the last year. If PNG felt good enough to invest before those milestones were accomplished, they should feel even more confident now.

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#5

Per the conf call, they need another $200M +/- to get to first ore, depending on the further PNG 15% (5/5/5) options. If PNG buys in all three and pays the same as the first 15% then Nautilus would receive another $120M.

That leaves only $80M and if they can get a royalty or streaming deal, it's conceivable they could come up with the full $200M and not pay a dime out of their cash reserves and potentially even come out cash positive.  We will know the answer by year end.

Also, SSD I think you're being extremely generous with your timeline for a potential competitor. Nautilus has been at this for over 10 years. Even if a big player with deep pockets can avoid some of the timeline delays we have seen, they still have to start at ground zero on equipment, permits, etc. I agree Nautilus has at least a 5-10 year first mover advantage.

But I better hold back a little, for fear of Monk getting all over me for pumping again.

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#6
Tongue 

- after all discussions with PNG over the last years, I'm shure that they will take the additional 15%

- didn't Johnston say, that they are in negiotiations with Tongling - I had the feeling, that Tongling will be the partner for the additional 80 millions - what make sense for both, NUS and Tongling

- I'm shure that the shareprice will touch the sky, but actually it really sucks!!! perhaps I should buy some more shares Tongue

- if there is a takeover-situation in 3 years, then there will be more than one bidder - with a nice influence to the shareprice

- with a sufficient number of shares (like all of us) , end of 2018 will bring us a bright smile on our face !!!!!!!!!<img src=" border="0" class="smilie" src="http://shareholdersunite.com/mybb/images/smilies/biggrin.gif" />

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#7

1 to 3 year first mover advantage. Fully funded governments can move a hell of a lot faster than Mike and Shontel. China (for example) could exploit their own terrestrial waters within 16 months of concept I amateurishly extrapolate.
-Marko's Nemesis-

From me: Nautilus will be the pedigree. If anyone doesn't want hold shares in a best of breed, fine. Sell them. I, like SCD, am re-evalutating. I have a large investment as I think we all do on this board (always assuming economies of scale for each individual). I would like to take my money out and work it for the next three years vs. watch 500 share trades take it from 42 to 54 and back again over and over for the daily trauma/drama. We need to find out if they are going to be stupid and hit the open market for the final required funds.

Detlef, thank you for your questions today. We bitch, complain and innovate on this board. Why were there no prepared questions that we ALL want answers to? Maui, you are deep in dis custard. You should get a poll on what we want know every chance we get. I will ask the questions if that is what is lacking. I was on the call (about 5 mins tardy) and was equally flabbergasted by the lack of representation from our inquisitive minds. Myself included. I don't think they would have any problem with a rep from a group of invested investors asking a set of questions. Let's get it together for the next conf. call to make sure everybody's concerns and helpful questions are represented. NUS seems willing to participate. Let's give them a chance.

Edit:

Caveat - I will need to be annouced by the confernce call host as "The next question comes from... Batman, an independant investor".

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#8

sent list of questions to NUS before conference call - ask if they give answer during call - when do nothing during the session, call and ask on  the phone

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#9

I've asked questions in past calls but it all depends if I can get up at 4am local time.  I actually tried and had the funding question ready, but overslept a bit and by the time I dialed in they were already wrapping up.

Anyway, yes I agree I will take a poll prior to the next meeting which also should be the AGM, and we will have prepared a list of bat-questions.

Monk, there's now way in H E double hockey sticks that China or anyone else is 1 year behind Nautilus.  Three years at the most optimistic and I still think more like 3-5.  Even if China fast tracks their own tenements, they still have to develop/buy/steal the mining technology.  Granted they already build the vessels so its not a stretch but also not an easy layup.

SBM yes I think Tongling will take 100% of everything Nautilus mines for the forseeable future.  If they become a takeover candidate, my guess is the most oportune time is just prior to first ore.

Mahalo (thanks) everyone for the great engagement on this board.  Its turning into a valuable resource for all of us.

And most thanks of all to SSD, the oldest old timer of them all, for re-evaluating your position and keeping everyone honest.

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#10

'lorcan458' pid='56959' datel Wrote:

The PNG government already has a lot invested in Solwara 1. I think it is almost certain they will buy in to all three 5% increments going forward, starting in June. There is no indication at all that Nautilus isn't going to be successful compared to when PNG invested in the past. Nautilus has hit a lot of milestones with equipment over the last year. If PNG felt good enough to invest before those milestones were accomplished, they should feel even more confident now.

Agree lorcan and others that its in PNG's best interest to buy in, just want to point out that PNG is currently investing heavily in LNG and there are competing projects for PNG investment (primarily Oil & Gas/LNG) and there is a trade-off of faster revenue vs. better ROI. My solution?  Invest in both sectors.

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