Nautilus Minerals has signed a subscription agreement with Mawarid Offshore Mining and Metalloinvest Holding to sell such number of common shares of the company that will raise gross proceeds of up to US$20 million.

As previously disclosed, Nautilus requires significant additional funding in order to complete the build and deployment of the seafloor production system to be utilized at the Solwara 1 Project.

The gross proceeds available under the subscription agreement should provide the bridge financing necessary to enable the company to operate and to carry on the project, while it continues to explore additional financing, joint ventures or other transactions that provide the funding required in order to complete the development of the Solwara 1 Project.

Mike Johnston, Nautilus’ CEO, said “The company appreciates the ongoing support of its two major shareholders through this bridge financing arrangement, especially given current market conditions.”

For the purposes of the additional funding required and in order to continue operating, the company said it will terminate other contracts for the construction of any seafloor production equipment that are in the early stages of development and will not enter into any new construction contracts until additional funding is secured.

In addition, Nautilus will be reducing its staff numbers by approximately 60%, including the following members of the company’s executive management team: Shontel Norgate, chief financial officer; Kevin Cain, vice president – Projects; Jonathan Lowe, vice president – Strategic Development and Exploration; and Karen Hauff, general counsel/company secretary.

Responsible for implementing the restructuring plan, are: Mike Johnston, president & CEO; and Adam Wright, vice president – PNG Operations.

Nautilus previously disclosed that in the event that the required funding is secured and the company is able to continue development of the Solwara 1 Project, the schedule would be delayed.

“If the additional required funding is secured by June 2017 and subject to ongoing detailed planning, the company could be in a position to commence the initial deployment and testing operations at the Solwara 1 Project by the end of Q1 2019,” Nautilus said in a press statement.