Mr. Mike Johnston reports

NAUTILUS MINERALS AND STATE OF PNG RESOLVE ISSUES AND SIGN AGREEMENT

Nautilus Minerals Inc. and Papua New Guinea have today signed an agreement, enabling the Solwara 1 project to move forward toward production with the full support of the state.

Under the agreement, the state shall take an initial 15-per-cent interest in the project. The state has the option to take up to a further 15-per-cent interest within 12 months of the agreement becoming unconditional. The state has paid Nautilus a non-refundable deposit for its initial 15-per-cent interest of $7-million (U.S.).

The agreement is conditional upon the state (through a subsidiary of Petromin PNG Holdings Ltd.), securing by July 31, 2014, the financing for the state's 15-per-cent share of the capital required to complete the development phase of the project up to first production, being $113-million (U.S.) (excluding the deposit). These funds will be placed in escrow until Nautilus satisfies the conditions for their release. The funds will be released to Nautilus, and an unincorporated joint venture between the parties for the continuing operation of the project shall be formed, if within six months of the funds being placed in escrow Nautilus secures the charter of a production support vessel and secures for the state certain intellectual property rights. After first production, Petromin's subsidiary will contribute funds in proportion to its interest.

If the conditions of the agreement are satisfied and the state completes the purchase of its 15-per-cent interest in the project, then the arbitration concerning Nautilus's claim for damages related to the termination of the state equity option agreement dated March 29, 2011, shall be dismissed. If the state does not complete the purchase, then the position the parties were in prior to signing the agreement is reinstated.

Nautilus's chief executive officer, Mike Johnston, said the company was pleased to have achieved an amicable resolution of its issues with the state.

"This step represents a major vote of confidence in Nautilus Minerals and the Solwara 1 project. Through this joint venture, the state will provide a significant capital investment and will retain a direct interest in the long-term success of the project. We look forward to working closely with the state and Petromin on Solwara 1, which will generate significant economic activity within the state and the province of New Ireland," he said.

"The company is now focusing its attention on securing a suitable vessel arrangement and is continuing its discussions with potential vessel partners while also undertaking a tender process with shipyards experienced in building offshore construction vessels. The company intends to have a vessel solution in place before the end of the year," he added.

Mr. Johnston continues to have the support of the board of directors of Nautilus, with his interim role as president and chief executive officer having now been made permanent.

Investor update

The company will hold an investor update on Tuesday, April 29, 2014, at 10 a.m. Eastern Daylight Time.

Conference call details

International dial-in:  61-2-8524-5042

Australia:  1-800-801-825

Canada:  1-855-842-3490

United Kingdom:  0800-0150-9725

United States:  1-855-298-3404

Attendee passcode:  9082391

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. EDT (Toronto) on Tuesday, April 29, 2014.

We seek Safe Harbor.