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Seafloor Exploration Boosted by US$39 Million Private Placement

Friday, September 28th, 2007

Nautilus Minerals Inc. is pleased to announce that the Company’s major shareholder, Epion Holdings Limited, has agreed to purchase, on a private placement basis, a total of 10,859,690 units at a price of C$3.60 (equal to GBP1.78*) for gross proceeds of C$39,094,884 (equal to GBP19,372,170*) (the “Placement”).
Each Unit will consist of one common share in the capital of the Company and one-fifth of one warrant, with each whole warrant entitling Epion to purchase an additional common share for C$3.80 (equal to GBP1.88*) for a period of two years from the date of issuance of the Warrants.
The proceeds of the Placement are proposed to be used to fund future exploration programs, development of survey, geophysical and sampling equipment and for working capital.
David Heydon, Nautilus’ CEO, commented: “With the recent announcement of our exploration success at Solwara 1, we are keen to get back out on the water and develop a pipeline of projects. Ongoing exploration is the key to increasing shareholder value. Our existing US$270 million in cash is committed for the development of the Solwara 1 project and to the 2007 exploration program (US$20 million). This Placement allows us to maintain momentum and exploration at current levels for 2008 and 2009. Given the long lead times to arrange survey ships we needed to secure capital this month to ensure we have a ship in time for a full 2008 exploration “season”. The funds will also provide capital for potential development of new equipment following the success of the innovative electromagnetic tools and the robotic ROV drills used in 1,700 metre water depth at Solwara 1.”
Heydon added: “Following the closing of this Placement, Epion will hold approximately 23% of the issued capital and we are pleased to have the financial support of this major resource group. Notwithstanding the size of the shareholding, as part of the financing, Epion has agreed that if a takeover bid is made for Nautilus and recommended by the Board, that Epion will accept the bid or make a higher counter offer. This brings Epion in to line with the other major shareholders, Anglo American, Teck Cominco and Barrick Gold who are under a similar obligation. This ensures that none of these significant shareholders can block a takeover bid recommended by the Board, allowing shareholders to enjoy the full value of any such bid.”
Heydon added: “However, of course, with so much opportunity and value still to be realised from starting this new industry of offshore mining, we are not planning to be a takeover target and are focused on developing our business as a major low cost base metal producer.”
Epion is a company that is wholly owned by the Metalloinvest Group controlled by Mr. Alisher Usmanov who is a prominent Russian investor in the mining and metal industries. The Metalloinvest Group is Russia’s largest iron ore producer and owns several integrated steel operations.
All securities will be subject to a four-month hold period in Canada. As part of the Company’s admission to AIM, Epion entered in to a “Lock-up escrow” agreement with Nautilus not to sell any shares until February 2, 2008. Epion has also agreed that the shares issued under this Placement will not be sold prior to February 3, 2008.
Nautilus will, upon closing of the Placement, pay M&A Advisors Ltd. a finder’s fee of C$3,909,488 (equal to GBP1,936,875*) in cash and issue warrants to M&A Advisors Ltd. to purchase 1,085,969 common shares of the Company exercisable at C$3.80 (equal to GBP1.88*) per share within two years of the closing of the Placement.
As a result of Epion’s substantial shareholding in the Company prior to the Placement, the transaction constitutes a ‘Related Party Transaction’ under the AIM Rules. The Directors of Nautilus, with the exception of Mr. A. Farhad Moshiri, who is deemed to be a related party by virtue of his directorship of Epion, consider, having consulted with its NOMAD, that the terms of the transaction are fair and reasonable insofar as the shareholders of Nautilus are concerned.
The Placement and payment of the finder’s fee are subject to regulatory approval.

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