Nautilus Minerals says the Papua New Guinea didn't pay for a much disputed 30-percent interest in the Solwara 1 underwater mining project on time.
A few weeks ago an arbitrator ruled against the Papua New Guinea government and set October 23, 2013, as a deadline to pay Nautilus around $118 million for a 30 percent stake in Solwara 1.
The government had exercised its 30 percent option back in late March, 2011, but never paid up, contending the junior hadn't met all its obligations on the project.
The dispute headed to binding arbitration in June last year and an arbitration decision finally came out in early October, this year.
Nautilus said the arbiter ruled in its favour and ordered Papua New Guinea to pay the junior for the 30 percent interest by October 23.
But that deadline has now passed without payment, Nautilus said this morning in a news release that was thin on details.
Nautilus stated it “is in discussions with senior officials of the State” and added that it preferred “to resolve these matters amicably.”
In the run up to the October 23 deadline Nautilus President and CEO Michael Johnston had voiced hope the government would make payment on time.
In an early October conference call Johnston said he had met with Papua New Guinea officials to talk about the arbiter's decision and that officials did not show resistance to it.
“Those discussions were very good,” Johnston said. “We're currently working with the government to try and achieve completion by October 23.”
In a Q&A with Radio Australia Johnston was asked what would happen if Papua New Guinea missed payment, but didn't expand on the consequences.
"You know, like I said, the decision is legally binding on the state.”
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