Mr. Mike Johnston reports

NAUTILUS MINERALS INC.: AUXILIARY CUTTER ASSEMBLY HAS COMMENCED AT SMD

The assembly of Nautilus Minerals Inc.'s third and final sea-floor production tool, the auxiliary cutter, has commenced at Soil Machine Dynamics' facility at Newcastle upon Tyne, U.K..

Nautilus's chief executive officer, Mike Johnston, said: "We are pleased that the assembly of the AC, the third and final of the three SPTs, has now commenced, with the arrival of the chassis at the SMD facility. The next milestone for the SPTs will be the commencement of factory acceptance testing on the already assembled bulk cutter. We look forward to reporting on this progress next month."

The AC will weigh in at 250 tonnes when fully assembled. The AC is a preparatory machine that deals with rough terrain and creates benches for the other SPTs to work. It will operate on tracks with spud assistance and has a boom-mounted cutting head for flexibility.

Subsea vehicle designer and manufacturer, SMD, of Newcastle upon Tyne, U.K., is the company responsible for building the SPTs for Nautilus.

How they will work

The excavation and collection of mineralized material have been split into three individual tasks, which will each be carried out by a different SPT. The AC is designed as the pioneering tool which prepares the rugged seabed for the more powerful BC. These two tools gather the excavated material; the other, the collecting machine, will collect the cut material by drawing it in as sea water slurry with internal pumps and pushing it through a flexible pipe to the subsea pump and on to the production support vessel via the riser and lift system.

We seek Safe Harbor.