Nautilus Minerals has signed an agreement with Chinese smelting company Tongling Nonferrous Metals Group for ores extracted from the Solwara 1 deposit in Papua New Guinea.
The new agreement follows the April 2012 binding heads of agreement (HOA), under which Nautilus agreed to sell minerals extracted from the Solwara 1 deposit to Tongling Nonferrous.
The companies conducted negotiations for a new master ores sales and processing agreement ("MOSPA")
Under the MOSPA, Nautilus will face less risk and Tongling will be able to process the Solwara 1 material to maximises its returns.
Tongling will pay Nautilus for a fixed proportion of copper, gold and silver present in the mineralised material.
Tongling will pay for 95% of the recoverable copper, while the gold payment is fixed at 50% of the contained gold in the mineralised materia, and payment for silver is fixed at 30%.
Nautilus highlighted that the Asian international copper concentrate benchmark will be used as the basis for smelter treatment and refining charges related to the recoverable copper.
Tongling Nonferrous Metals Group vice president Zhan Deguong said: "Tongling Non Ferrous Metals Group has a long history of technological innovation, and is committed to the 'green economy' where waste streams are minimised, and value is realised on all components of the material.
"Our modern world class processing facilities will allow us to extract maximum value making this win-win agreement possible. We are very proud to support Nautilus in the development of Solwara 1, a ground breaking project which signals a new era in the mining industry."
Image: Nautilus Minerals enters into a sales agreement with Tongling for Solwara 1 deposite. Photo: Nautilus Minerals.