Mr. Mike Johnston reports

NAUTILUS PROVIDES PROJECT UPDATE

Nautilus Minerals Inc. has provided an update on the status of its seafloor production system, to be used by Nautilus and its partner, Eda Kopa (Solwara) Ltd., at the Solwara 1 project site, in the Bismarck Sea of Papua New Guinea (PNG).

Mike Johnston, Nautilus's chief executive officer, commented: "The company is pleased by the progress that continues to be made with the construction, trialling and delivery of the seafloor production system as detailed in the notes below. The system remains on track for initial production during the first half of 2019, subject to further financing as indicated previously."

Status

Submerged trials of the first of the seafloor production tools (SPTs), the collecting machine (CM), have now been completed at the trial facility in Motukea Island, Port Moresby, PNG. The results of the CM trials indicate that the machine can perform to design specifications and the team is now looking at operating enhancements. The auxiliary cutter is currently being trialled and this will be followed by the bulk cutter. The company looks forward to reporting on these trials later this year.

At the Mawei shipyard, the vessel construction is currently at about 70 per cent. The assembly of all three SPT launch and recovery systems (LARS) is progressing well at the shipyard under the supervision of the supplier AXTech. The 200T and 100T ship's cranes have been delivered to the shipyard by Macgregor and one of the crane pedestals has already been fitted on to the deck. The lift winches and spoolers for the SPT LARS have also been shipped from Korea to the shipyard.

The Sichuan Honghua Petroleum Equipment Co. continues to make good progress with the fabrication of the derrick and associated substructure. This equipment, which is required for the deployment of the subsea slurry lift pump and riser, has now undergone trial assembly at Honghua's fabrication facility in Chengdu. The derrick and substructure will be shipped to the Mawei shipyard later this month so that installation on the production support vessel can start before the end of the year. Honghua has also commenced fabrication of the dewatering plant structural steel modules at its Qidong yard, following procurement of the required steel over the past two months.

Stakeholder engagement continues to progress well in PNG with a series of visits arranged for provincial government representatives and community leaders to witness the SPT trials taking place at Motukea Island. The company continues to receive strong local support for the project as a result of its health, education and infrastructure improvement programs, and regular awareness meetings in coastal communities.

Subject to further financing, Nautilus's objective remains to develop the world's first commercial high-grade seafloor copper-gold mine and launch the seafloor resource production industry during the first half of 2019.

We seek Safe Harbor.