Mr. Mike Johnston reports

NAUTILUS UPGRADES AND INCREASES CCZ MINERAL RESOURCE TO OVER 685 MILLION TONNES

Nautilus Minerals Inc.'s wholly owned subsidiary, Tonga Offshore Mining Ltd. (TOML), has upgraded its mineral resource estimate for its polymetallic nodule project to include portions in the inferred, indicated and measured categories. This follows on from the successful completion of exploration campaigns in the Clarion-Clipperton fracture zone (CCZ) in the central Pacific Ocean in 2013 and late 2015.

Nautilus's chief executive officer, Mike Johnston, commented, "It is exciting to announce this increase in the CCZ project's inferred mineral resource base from 410 million tonnes (wet) to 685 million tonnes (wet), as well the upgrade of an additional 68 Mt (wet) into the indicated category and 2.6 Mt into the measured category."

The mineral resource includes portions in the inferred, indicated and measured categories, and has been reported in the table. The mineral resource estimate at an abundance cut-off of six wet kilograms/square metre is the selected base-case scenario considering a non-selective bulk mining operation. Mathew Nimmo, independent qualified person for the project, has assessed the available information regarding mining and processing of the polymetallic nodules and concluded that there are reasonable prospects for economic extraction. The effective date for the estimate is March 30, 2016 (being the date when the QP received the nodule sample data from TOML).

                          MINERAL RESOURCE ESTIMATE 

Mineral resource  Abundance       Mn    Ni    Cu    Co  Polymetallic nodules
classification   (wet kg/m2)      (%)   (%)   (%)   (%)          (x106 wet t)(i)   

Measured              11.81    27.57  1.33  1.05  0.23                   2.6         
Indicated             12.19    30.32  1.35  1.18  0.21                  68.1        
Inferred              11.52    29.05  1.29  1.14  0.20                 685.3        

(i) Abundance cut-off of six wet kg/square m used. As the nodules 
effectively form a single layer on the sea floor, abundance (kg/square m2) 
is used to define the mineral resource tonnage. Variations in totals are due 
to rounding of individual values manganese, nickel, copper and cobalt assays 
on samples dried at 105 C. Moisture content of nodules is estimated at 29 
per cent (free water removed after drying at 105 C).

Mr. Johnston also noted: "Our updated mineral resource for the CCZ highlights again the significant potential of sea-floor resources. Technological advances in mining, oil and gas, and maritime technologies over the last 20 years now mean there are reasonable prospects for economic extraction of these massive mineralized systems. At Nautilus, we are both excited and privileged to be leading the development of this significant, currently untapped potential, first with our high-grade Solwara 1 sea-floor massive sulphide (SMS) project and other SMS systems in the southwest Pacific, and now with this updated polymetallic nodule mineral resource in the CCZ."

Mr. Nimmo has prepared the technical information that forms the basis for this press release. He has completed this work on behalf of TOML and his work has been independently reviewed by AMC Consultants Pty. Ltd. The results set out in this press release will be reported in detail in a technical report prepared in accordance with National Instrument 43-101 and submitted on SEDAR within the next 45 days.

Basis of the mineral resource estimate

The QP for mineral resource estimates is Mr. Nimmo. Mr. Nimmo is a member of the Australian Institute of Geoscientists, an independent consulting geologist, and fulfills the requirements to be a qualified person for the purposes of National Instrument 43-101.

A summary of technical items of interest follows.

Tenure:

• All resources are held by TOML, a 100-per-cent-owned subsidiary of Nautilus. TOML is registered in the Kingdom of Tonga and is subject to all applicable Tongan mining and civil laws, and Tongan taxes and royalties.
• The resource falls within the six areas within the exploration area granted to TOML, which covers the exploration for polymetallic nodules and formalizes the rights of TOML to apply for a contract for exploitation.

Exploration:

• Historic samples were collected by pioneer contractors prior to TOML acquiring the property (Japanese, French and Russian research organizations) and provided to TOML and the QP by the International Seabed Authority.
• Box-core and photo-profile data were collected by TOML during its 2015 cruise.
• Box-core sampling: Nodules were separated from the mud, washed and weighed using a motion compensating scale. The nodules were then laid out on a grid and photographed, and then air dried for 30 to 90 minutes. Reference and duplicate samples were selected, and all samples placed into plastic bags and then put into drums. The drums were sealed with tamper-proof tape.
• The sample chain of custody and sample security were maintained. There was no evidence of tampering of the samples.
• Nodule abundance was determined from box core using the weight of the nodules divided by the area of the box core used. Additional nodule abundance observations were derived from one in every 100th photo from the photo-profile lines using the manual long-axis estimation method. The long-axis estimation method involves measuring every nodule long axis within the photo and then using this in the equation derived from D. Felix, 1980 "Some problems in making nodule abundance estimates from sea floor photographs," Marine Mining, Volume 2, No. 3. The parameters in the equation were calibrated from box-core abundance and the sea-floor photos at the same location as the box core.

Assaying:

• Assays were performed at ALS laboratory (Brisbane) and Jacobs University in Bremen, Germany.
• Additional duplicate samples were selected at the ALS laboratory by TOML during subsampling prior to submission to ALS.
• ALS used its chromite/manganese ore-fused disk XRF method to analyze elements including Mn, Ni, Cu and Co. They also used high-grade four-acid ICP-AES for selected samples.
• Jacobs used 0.5M HNO3 ICP-MS and 0.5M HNO3 ICP-MS to analyze selected samples.

Quality control:

• There is no duplicate or quality assurance/quality control laboratory data available for the historic sample results.
• There were six groups that sampled the CCZ deposit over various parts using different sampling and assaying methods. Comparison of the data between each of the groups shows that the different sampling achieved similar results over vast areas.
• TOML subsampled the box-core samples and collected a random set of 25 duplicate samples for assay by ALS. Comparison of the box-core duplicate subsamples shows no issues with subsampling or assaying.
• TOML also submitted 15 duplicate samples to Jacobs laboratory. Comparison between Jacobs and ALS shows good agreement for nickel and cobalt, while the Jacobs analyses for Mn show a slight bias low and a slight bias high for copper.
• Both ALS and Jacobs also analyzed internal standards (certified reference material), blanks and duplicates. All analyzed results were within acceptable limits.

Resource estimation:

• Polymetallic nodules occur on the surface of the sea floor at varying abundance across the CCZ.
• Grades were estimated from sample assays using ordinary block kriging.
• Based on the sampling process it was conservatively assumed that the weights in the abundance measurements reported/collected by pioneer contractors were wet but there was some uncertainty as it was not clearly specified by each of the pioneer contractors who collected the data or the ISA which supplied it.
• Based on the reported sample analysis processes, the metal grades were reported on a dry-weight basis.
• Estimate of tonnage was based on area and nodule abundance (wet kg/square m). Area was used as there was no effective sampling below the immediate sea floor and mining is only expected to recover nodules from the top 10 centimetres.
• Abundance was estimated using free-fall-grab (FFG) and box-core samples, supplemented by estimates derived from photo profiling. Calculation of abundance from photo profiling using nodule long axis follows a previously published procedure, confirmed by laboratory measurements by TOML.
• Estimate of inferred mineral resource abundance is likely to be biased low as most of the historic samples, including FFG samples, were within the inferred mineral resource area. FFG samples typically underestimate the abundance of nodules. Correction factors to adjust the likely nodule abundance bias have not been applied.
• Quantitative kriging neighbourhood analysis was performed to check selected estimation parameters.

Mineral resource uncertainty:

• The highest uncertainty is in estimating nodule abundance due to the nature of the spatial distribution of nodules. However, the photo-profile lines demonstrate the continuity in nodule abundance between sample locations and confirm the range of spatial continuity (autocorrelation). The variogram range determined from photo profile percentage nodule coverage is consistent with the range determined from the wider-spaced samples used in estimating the mineral resource. Multibeam backscatter survey results cover the entire area in 30 to 60 m resolution and were used to aid in domaining areas with nodules from areas with very low or no nodules.
• Classification of the mineral resource into measured, indicated and inferred categories, in accordance with Canadian Institute of Mining, Metallurgy and Petroleum definitions, considered: the nodule sample quality, uncertainty in the nodule sample abundance and grades, continuity of nodule abundance, and grade and scale of the deposit.
• Inferred mineral resource classification was based on sampling by pioneer contractors on a nominal spacing of 20 kilometres, the variation and uncertainty in the sample quality, and the likely presence of short-range variation to nodule abundance.
• Indicated mineral resource classification was based on box-core sampling by TOML on a nominal spacing of approximately seven km by seven km (including photo profiling in some cases at seven km by three km), supplemented by sampling by pioneer contractors.
• Measured mineral resource classification was based on box-core sampling by TOML on a nominal spacing of approximately seven km by seven km plus photo profiling on a nominal spacing of 3.5 km by three km, supplemented by sampling by pioneer contractors.

Development:

• No development of deep-sea resources has been attempted or demonstrated other than some historical trial mining.
• In the considered opinion of the QP, the mineral resource estimate meets the requirement of reasonable prospects for economic extraction. Particular factors of note are:
  • Seabed and sea conditions in the TOML exploration area are not materially different from other parts of the CCZ.
  • Nodules have been successfully extracted in trials in the past and technological advances are likely to make the next attempts much more efficient; currently there are 12 other parties considering development.
  • While TOML and Nautilus have not published any economic assessment for mining sea-floor nodules in the CCZ, others have and they consider cut-off values in line with those listed in the table.

This mineral resource estimate is based upon and accurately reflects data compiled or supervised by Mr. Nimmo. Mr. Nimmo has sufficient experience that is relevant to the style of mineralization, the type of deposit under consideration and to the activity which he has undertaken to qualify as a competent person as defined in the 2012 edition of the Australasian code for the reporting of exploration results, mineral resources and ore reserves and as a qualified person under National Instrument 43-101.

We seek Safe Harbor.