enk sees strong interest in turkey project

European Nickel sees strong interest in Turkey project


By: Esmarie Swanepoel
14th October 2010

(miningweekly.com) ? ASX- and Aim-listed nickel developer European Nickel on Thursday said that its funding arrangements for the ?alda? mine, in Turkey, should be completed within the next two months.

Finance director Mark Hanlon told Mining Weekly Online that the company still needed to secure around $300-million for the final project financing to fund the $428-million construction cost. The construction of ?alda? is expected to take around 12-months.

Speaking at the Paydirt Nickel Conference, in Perth, Hanlon said that European Nickel had also secured had $60-million equity from Hunter Dickinson, however, this equity was subject to the debt raising.

Hanlon added that there has been significant interest in the ?alda? project from financing institutions.

?There are a number of banks that are very interested in the project, which is good. There is a lack of projects going through financing at the moment, because the global financial crisis stopped almost everything.?

Before the global financial crisis, the ?alda? project was fully financed, but hit a stumbling block when faced with receiving a forestry permit from the Turkish government. This was followed shortly the start of the global financial crisis, causing the financing to lapse.

Hanlon said on Thursday that while the forestry permit has, as yet, not been granted, the current Turkish government had proven amicable and the permit was expected shortly.

The ?alda? project is European Nickel?s flagship asset, and was said to be one of the largest foreign direct investments in Turkey?s mining industry.

With proven Joint Ore Reserves Committee (Jorc) reserves of 33,2-million tons at 1,13% nickel, the mine is targeting 20 000 t/y of nickel production over a 14 year life-of-mine.

Meanwhile, Hanlon reported that a new nickel laterite heap-leaching technology would increasingly provide more competitive and ?greener? mining and processing options as the global sector makes the transition from nickel sulphides to majority nickel laterite production.

The proprietary heap-leaching technology ? developed in part by the European Nickel in joint venture with BHP Billiton ? had now achieved three years of successful and substantive testwork.

?It will be the foundation of European Nickel?s new ?alda? nickel laterite mine on the west coast of Turkey and our second planned mine, Acoje in the Philippines,? Hanlon said.

?Despite the previous history of difficulties in processing nickel laterites, the results, based on full height trial heaps and demonstrated permeability and recovery rates, have encouraged us to commercialise the process as it offers significant lower capital expenditure (capex) and operational expenditure than more conventional laterite high pressure acid leach processing methods,? he said.

Hanlon said that heap recoveries under test have averaged 75% and a yearly capex of around $6/lb nickel concentrate ? one third the cost of more conventional smelting operations - making it particularly suitable for smaller laterite deposits.

?The method also has a low carbon footprint and does not require a large team of ?experts? to be hired to monitor and maintain the process,? he said.

?Against this, conventional processes are under pressure as they require large-scale operations to be competitive and that requires large deposits, are high energy consumers and under the transition to laterite consumption outweighing sulphide availability and consumption, puts conventional smelting operations under cost and project execution pressures.?

Subject to outstanding regulatory approvals, European Nickel is targeting first production from ?alda? in 2012.