Kumul Minerals files claim for Solwara project
Kumul Minerals Holdings has filed a claim for unearned contribution to the Solwara 1 Deep Sea Mining Project.
KMH chairman Peter Graham announced this on Monday that the wholly owned subsidiary, Eda Kopa (Solwara) Limited, has filed a claim for approximately US$51 million (K173m) under a Canadian court supervised creditors process initiated by the parent company of its joint-venturer in the Solwara 1 Project, Nautilus Minerals Niugini Limited.
The claim relates to the unearned component of the contribution originally advanced by Eda Kopa to the Solwara 1 Project.
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 Rabaul and 30km west of New Ireland Province.
Mr Graham noted that in 2014 Eda Kopa contributed $120 million (K375 million) representing its full share of all project construction and development costs, both past and future, for its 15 per cent interest.
“Eda Kopa funded its contribution to the project by way of a K375 million loan from Bank South Pacific that was guaranteed by the State.
“Nautilus PNG, the project manager and joint-venturer responsible for funding the remaining 85 per cent of the project, has not been able to meet its funding obligations and, as a result, the project has stalled with a substantial proportion of the development work still to be undertaken.
“Eda Kopa has made claim for 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,” said Mr Graham.
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 (CCAA) process and initiated a sales and investment solicitation process (SISP) 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.
Mr Graham said that; “While Eda Kopa has been patient in its dealings with Nautilus as that company has undertaken various efforts to secure funding, in light of Nautilus’ difficult circumstances, Eda Kopa now feels compelled to make the claim and take such action as it can to best protect the State’s interests.”
The project to date is yet to get off, and was initially set to begin production this year.
With the current action by KMH, an attempt to recoup possible earnings, it is also a desperate attempt to recoup what could possibly be half a billion kina loss that continues to grow, the longer the project fails to get off the ocean floor.