Mr. Michael Bailey, shareholder, reports

MICHAEL BAILEY OPEN LETTER TO NAUTILUS MINERALS INC (TSX:NUS) SHAREHOLDERS

Nautilus Minerals Inc. investor Michael Bailey has issued a letter to Nautilus shareholders.

Dear fellow Nautilus Minerals shareholders,

I am a long-time follower and shareholder of Nautilus Corp. To my dismay, I have watched this company continue to overpromise and underdeliver. I have completely lost confidence in the management team now led intermittently by Michael Johnston and previously by non-executive board member Stephen Rogers. The day that Mr. Rogers was appointed president and chief operating officer of NUS four years ago, NUS stock traded at $2.50 per share. In the last five days prior to Jan. 9 and our subsequent hostile tender for the shares at 97 cents, NUS stock traded at an average of 55 cents per share. The decline in share price over this four-year period represents the clearest indication to us that the management of NUS has failed, and that the company will not succeed without a new management team and a drastically different strategy. As the largest shareholders of NUS, Metalloinvest, Anglo American PLC, Mawarid Mining LLC and we are urging to join our tender as we are unwilling to put our trust in the existing board and Mr. Johnston to turn this company around.

We are now offering a clear choice that we view as a win-win for shareholders. Shareholders can win by selling their shares to us in our tender for $1.10, or shareholders can win by voting for our slate of directors in our proxy fight to replace the existing board and implementing a shareholder-friendly business strategy -- the cornerstone of which is the building and eventual spinoff of the Solwara 1 project as a separate publicly traded mining technology company.

We will be releasing our full slate of director nominees before next week's deadline. At this time, we are announcing the nomination of Julian Malnic, the former president and chief executive officer of Nautilus, to the new board on our slate of nominees and assisting us in developing an independent strategy to maximize the value of Solwara 1. Mr. Malnic was president and then CEO of Nautilus until 1997. Mr. Malnic stated in an e-mail to me: "I have been very unhappy with the board of Nautilus. The problem, for instance, with the [Papua New Guinea] government has been generated by the board itself, in my view."

I have made several attempts to contact and hold open discussions with Nautilus Minerals, the current CEO via e-mail and the management since my initial announcement of my intention to launch a hostile offer on Monday; however, they have been operating at the same pace at which they operate the company. So I urge you, my fellow shareholders, to not let this go on any longer. Let's stop the bleeding and unlock share value trapped in the underlying assets by removing the current management and drastically changing the strategy for the company.

Mr. Johnston and Mr. Rogers have been telling shareholders for years that better times are right around the corner and that they have the right people in place to succeed, yet every year, the start-up for NUS is one more year away. The right people have left or been moved around, and newer, right people have taken their place. We believe that our tender offer and proxy fight provide the opportunity for a victory for shareholders now in the form of two choices: (i) $1.10 in cash or (ii) ownership in both Solwara 1 as a separate public company and in the remaining NUS, the assets of which will be under a new board focused on increasing shareholder value.