Mr. Mike Johnston reports

NAUTILUS MINERALS TERMINATES EQUIPMENT BUILD FOR ITS SOLWARA 1 PROJECT

Nautilus Minerals Inc. has decided to preserve its cash position by terminating the construction of the equipment for its sea floor production system.

Nautilus announced on June 1, 2012, that it was in dispute with the Independent State of Papua New Guinea as to the parties' obligations to complete the agreement entered into in March, 2011. A further announcement was made on June 20, 2012, confirming that the state had issued a notice of arbitration to the company.

Nautilus considers that the state has a contractual obligation to pay an amount of approximately $23.5-million in respect of costs incurred in the development of the Solwara 1 project up to January, 2011, and to make pro rata capital contributions in respect of subsequent project development costs, which, at the end of September, 2012, totalled approximately $51.5-million (excluding interest). The state disputes that it is required to meet such obligations at this time. In order to continue the construction of the sea floor production system, Nautilus has been forced to carry the state's share of project development costs to date.

It has been Nautilus's preference to resolve the dispute with the state by agreement, and with that aim Nautilus has taken steps to meet with senior representatives of the state, including discussions with ministers of the National Executive Council. Unfortunately, to date, an agreed commercial resolution with the state has not been achieved, and Nautilus believes the avenues for achieving such a resolution within the time frame that Nautilus could reasonably continue to carry the total development costs for the project have now been exhausted. Accordingly, in order to preserve capital, management and the board of directors of Nautilus have decided to terminate construction of the sea floor production system. All the relevant supplier agreements contain provisions for termination without penalty. The company has also been forced to reduce staff numbers, with approximately 60 positions to be made redundant.

Nautilus's chief executive officer, Mike Johnston, commented: "While terminating the equipment build for the sea floor production system and reducing staff numbers to this extent was a difficult decision, it was appropriate. Nautilus has a highly prospective ground position, which includes 19 identified prospects in Tonga, including the recent high-grade discoveries in the NE Lau basin and a 410-million-tonne inferred mineral resource in the Central Pacific. Despite this setback, the company remains committed to maximizing shareholder value by achieving its objective of developing the world's first commercial sea floor copper-gold project and launching the deepwater sea floor resource production industry, whilst maintaining an environmentally and socially responsible approach."

Terminating the equipment build for the sea floor production system includes discontinuing discussions regarding an alternative vessel and associated financing solution. This means there will be a considerable delay in any commencement of production operations, and it may also result in an increase in the project cost.

Conference call details

A conference call and webcast will be held by the company on Tuesday, Nov. 13, 2012, at 10 a.m. ET (Toronto)/3 p.m. GMT (London).

Webcast link:  On-line

Dial-in numbers:  61-2-8524-5042 (international); 1800-801-825 (Australia); 1-855-842-3490 (Canada); 0800-0150-9725 (United Kingdom); 1-855-298-3404 (United States)

If your country dial-in number is not included here, please e-mail the company.

A presentation to support the conference call will be posted on the company's website for download by 9:30 a.m. ET (Toronto) on Tuesday, Nov. 13, 2012.

We seek Safe Harbor.