The company plans to use technology from the offshore oil and gas industry to get at abnormally high-grade metal deposits that -- despite lying beneath more than a mile of water -- are actually easier to access than typical hard-rock resources, Nautilus says.

"The thing that differentiates these seafloor, massive sulphides from land-based is that they are geologically younger, and they haven't had the plate movement and tectonic movement that land-based deposits have had," Nautilus Chief Executive Steve Rogers said in an interview.

"Therefore all these deposits lie on the sea floor, so they're much easier to get at than land-based deposits."

Rather than sinking a shaft through rock to get to an ore body, Nautilus will lower a remote mining machine from a ship, which will dig out a slurry-like ore, and pump it back up through a pipe.

In a mining industry beset by soaring development costs and long lead times to develop new mines, Nautilus promises a compressed development time line and copper grades that at Solwara have been around 8 percent to 10 percent, about 10 times what's normal in the industry.

CASH AND BACKERS

The company has just over US$300 million in cash, and also has deep-pocketed backers in Teck Cominco, Barrick Gold, Anglo American and Epion Holdings, which is owned by Russian investor Alisher Usmanov.

Solwara will be its first undersea mine, and the company also holds licenses and permits in the territorial waters of Fiji, Tonga, the Solomon Islands and New Zealand.

While reluctant to get into precise cost estimates for the process, Rogers said he expects the undersea mining should be competitive with the land-based industry.

"Basically, the ship, fuel, people, and spare equipment. Those are the (cost) properties," he said.

Nautilus had originally intended to contract out the mining, but concluded it could do it more affordably itself.

The company announced this week it has rented a ship that will cost it US$125 million over five years. The initial operation will have daily capacity of 6,000 tonnes.

Ray Goldie, an analyst at Salman Partners, projects total costs over ten years of US$3.7 billion for the company, but said Nautilus is in a good position, given the lack of recent discoveries in the land-based industry.

"They've discovered new deposits at the rate of several a year. How many new deposits have been discovered on land in the last ten years?," Goldie said.

(US$1=$1.01 Canadian) (Reporting by Cameron French; editing by Rob Wilson)