merger with enk

Just to give you guys a 'heads up' - no doubt there will be an announcement in the morning.

RNS Number : 5516G
Rusina Mining NL
02 February 2010

?
Joint Press Release
European Nickel and Rusina Mining to Merge
Consolidating Assets in the Philippines and becoming a Significant Nickel
Development Company
2 February 2010 - Perth and London: European Nickel PLC ("European Nickel" or
the "Company") (AIM, PLUS: ENK) and Rusina Mining NL ("Rusina") (AIM: RMLA, ASX:
RML) are pleased to announce that they have signed a Merger Implementation
Agreement ("MIA") whereby European Nickel proposes to acquire the entire issued
share capital of Rusina by way of a Scheme of Arrangement (the "Scheme") under
the Australian Corporations Act.

Transaction Summary
? In consideration for the transaction, Rusina shareholders will be
offered four European Nickel new ordinary shares ("New Shares") for every five
Rusina ordinary shares they own (the "Exchange Ratio"). The Scheme is subject to
Australian court approval and approval by Rusina's shareholders.
? The Exchange Ratio represents a 15.5% premium to Rusina's last 10 day's
ASX Volume Weighted Average Share Price ("VWAP") of A$0.0933 per share
(GBP0.05159 per share) and values Rusina at approximately GBP18.1 million
(A$32.7 million) based on European Nickel's last 10 days VWAP of GBP0.0745 per
share (the "Initial Offer"). Based on the last 30 days VWAP for each company
the premium is 27%.
? The ultimate value of the offer is capped at GBP27.1 million (the
"Value Cap"), a 50% premium to the Initial Offer. If an adjustment is made as
a result of the Value Cap, the offer would represent a 73.3% premium to Rusina's
10 day VWAP prior to the date of the MIA. A description of the Value Cap is
shown below.
? Holders of Rusina share options will be offered New Shares in
consideration for the cancellation of their Rusina options, based on the
calculated value of each series of options. In total 6,425,329 New Shares will
be offered to optionholders.
? The Rusina directors unanimously recommend that Rusina shareholders
vote in favour of the proposed Scheme, and each director intends to vote all of
the Rusina shares they own or control at the date of the Scheme meeting in
favour of the Scheme, in the absence of a superior proposal.
? Upon completion of the Scheme and the Placing, and under the terms of
the Initial Offer, current Rusina shareholders will own approximately 27.3% of
the merged company.
? European Nickel plans to establish an Australian listing of its shares
through ASX-listed CHESS Depositary Interests (CDIs) such that Rusina
shareholders can trade the New Shares they receive on the ASX.
? On completion of the Scheme certain changes will be made to the
composition of the Board, including the appointment of a new Managing Director,
which are detailed below.
? In a related transaction, European Nickel has also announced today that
it has placed 172.4 million new ordinary shares (the "Placing Shares") at 7.0
pence each (the "Placing Price") to raise gross proceeds of approximately
US$19.4 million (GBP12.1 million) (the "Placing") and an estimated additional
1.25 million new ordinary shares (the "Endeavour Shares") in lieu of interest on
the loan provided by Endeavour Financial Corporation.

Benefits of the Merger
The merger will create a larger, stronger company that will be better able to
finance its development projects and grow into a mid-tier nickel producer. The
merger is considered by the Boards of Rusina and European Nickel to be a logical
outcome of the joint venture between European Nickel and Rusina at the Acoje
nickel project in the Philippines and consolidates the ownership structure of
the project ahead of critical development and financing decisions.
? Improved access to development capital through enlarged balance sheet,
increased share liquidity and ASX listing.
? Strengthened management team - a management team with a track record of
success in international project development and the organisational depth to
develop two projects in quick succession.
? Creates a significant nickel development company with a substantial
JORC resource base of 1.35 million tonnes of contained nickel and a medium term
nickel production target of 50,000 tonnes per annum.
? Geographical and project diversification across Turkey, the Philippines
and Albania.
? Ability to pursue further growth opportunities.
? Enables savings in corporate overheads and cost savings from the
rationalisation of the Acoje joint venture into a simpler corporate and
operational structure.
European Nickel currently has a 20% interest in the Acoje project, with a right
to earn up to 40%, while Rusina currently has a 72% interest in the project. A
Definitive Feasibility Study is due to be completed in 2011. Acoje is European
Nickel's next planned heap leach project for commercialisation, after the ?aldag
project in Turkey.
European Nickel currently owns 8,836,430 Rusina shares, representing 2.9% of the
issued capital of Rusina.

The Combined Group
Upon implementation of the merger, the combined group will have a total
attributable resource base of 1.35 million tonnes of contained nickel, forecast
production of 45,000 tonnes per annum from its two projects, ?aldag and Acoje,
and a strengthened management team.

+--------------------------------------+--------+--------+----------+
| Combined Group Projects | ?aldag | Acoje | Combined |
+--------------------------------------+--------+--------+----------+
| Annual nickel production (tonnes) | 20,400 | 24,500 | 44,900 |
+--------------------------------------+--------+--------+----------+
| Total project capital cost (US$m) | 428 | 498 | 926 |
+--------------------------------------+--------+--------+----------+
| NPV10 (US$m) - US$6/lb Ni price | 2071 | 3752 | 582 |
+--------------------------------------+--------+--------+----------+
| NPV10 (US$m) - US$7/lb Ni price | 3791 | 5862 | 965 |
+--------------------------------------+--------+--------+----------+
| Free annual cashflow (US$m) - | 51 | 108 | 159 |
| US$6/lb Ni price | | | |
+--------------------------------------+--------+--------+----------+
| Project IRR - US$6/lb Ni price | 20.5% | 28.3% | |
+--------------------------------------+--------+--------+----------+
| Project IRR - US$7/lb Ni price | 28.4% | 37.2% | |
+--------------------------------------+--------+--------+----------+
Notes:
1. Geared
2. Ungeared

The combined market capitalisation of the two companies, based on the value of
Rusina under the Initial Offer and yesterday's closing price of European Nickel,
is GBP62.5 million.
On completion of the Scheme Rusina's CEO, Robert Gregory, and Rusina's CFO, Mark
Hanlon, will join the European Nickel board as Managing Director and Finance
Director respectively. Simon Purkiss will become Executive Deputy Chairman,
David Whitehead will continue as Chairman and Paul Lush will continue as a
Non-Executive Director. A further Non-Executive Director will be nominated on
completion of the Scheme and the appointment of all of the new directors will be
subject to approval by the Board and the Company's nominated adviser. Provided
that all proposed appointments are made, the remainder of the Company's Board
will step down with effect from completion.
Commenting on the merger, Simon Purkiss, Managing Director of European Nickel,
said:
"Merging with Rusina is a natural step as we seek to grow into a mid-tier nickel
producer. Acoje will be our next development project after ?aldag and
simplifying the corporate structure, along with bolstering our management team
ahead of critical development and financing decisions is logical.
I am also delighted that Rob Gregory has agreed to join the Board of European
Nickel. He has excellent operational experience and will be invaluable in
bringing ?aldag and Acoje into production."
Robert Gregory, Managing Director of Rusina, said:
"This transaction delivers considerable value to Rusina shareholders as they can
now be part of a larger, geographically diversified nickel company with a
project at construction stage in Turkey and a pipeline of development projects
in the Philippines and Albania."

Merger Implementation Agreement ("MIA")
Rusina has entered into a binding MIA with European Nickel under which Rusina
has agreed to propose the Scheme to its shareholders pursuant to which all of
Rusina's shares will be acquired by European Nickel. A summary of the MIA is
attached to this announcement.
The merger is subject to the completion of confirmatory due diligence by
European Nickel and Rusina prior to 3 March 2010.
The merger is also subject to satisfaction of a number of customary conditions
precedent, including the receipt of required regulatory and Australian court
approvals, as well as the approval of Rusina shareholders.
The MIA contains certain customary terms usual for a transaction of this nature,
including non-solicitation and no talk provisions and a mutual break fee of
US$250,000 payable in certain circumstances detailed in summary of the MIA
attached below.
As noted above, consideration for the transaction will be European Nickel
shares, with Rusina shareholders offered four European Nickel shares for every
five Rusina shares they own (the "Exchange Ratio"). The Exchange Ratio values
Rusina at approximately GBP18.1 million (A$32.7 million) based on European
Nickel's 10 day VWAP prior to the date of the MIA (the "Initial Offer").
Under the terms of the MIA the ultimate value of the offer is capped at GBP27.1
million (the "Value Cap"), a 50% premium to the Initial Offer. The determination
of whether an adjustment will be made to the Initial Offer will be made 12
business days prior to the Rusina shareholder meeting to approve the Scheme
("Cap Valuation Date"). If at this date, the value of the offer based on
European Nickel's 10 day VWAP prior to the Cap Valuation Date, is greater than
the Value Cap then the Exchange Ratio will be adjusted to equal the Value Cap.
The Value Cap will be reached if, at the Cap Valuation Date the European Nickel
10 day VWAP prior to the Cap Valuation Date is greater than 11.175 pence,
assuming no new Rusina ordinary shares are issued before that date.
The Value Cap mechanism has been included on the basis that the European Nickel
share price could appreciate strongly, prior to completion of the merger, as a
result of a number of initiatives that are currently underway.
In a related transaction, European Nickel has placed 172.4 million new ordinary
shares at 7.0 pence each to raise gross proceeds of approximately US$19.4
million (GBP12.1 million) and an estimated additional 1.25 million new ordinary
shares in lieu of interest on the loan provided by Endeavour Financial
Corporation. The Placing Shares have been placed in two tranches. The First
Tranche Placing Shares have been placed firm on the basis of not exceeding the
Company's current authorised share capital. The remaining Second Tranche Placing
Shares, have also been placed firm but are conditional, inter alia, on the
passing of a shareholder resolutions to authorise the allotment of the shares
and the completion of the Scheme
The funds from the First Tranche Placing Shares will be used to repay the
Endeavour bridging loan, to meet expenditure commitments at ?aldag and Acoje and
for general working capital purposes. The proceeds from the Second Tranche
Placing Shares will be used to meet ongoing expenditure commitments for ?aldag,
progress the Acoje DFS and for general working capital purposes.

Next Steps
It is expected that a meeting of Rusina shareholders will be held in early May
2010 to vote on the proposed Scheme. Rusina shareholders will receive a Scheme
Booklet and notice of meeting in March 2010. The Scheme Booklet will contain
full details of the proposed transaction and will include an independent
expert's report for the benefit of Rusina shareholders. The transaction is
expected to be completed by late May 2010.