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Metallurgical Work on Young Nickel/Cobalt Laterite – On-going Testwork

The company wishes to advise that significant advances have been made in recent
weeks which include the successful re-generation of hydrochloric acid and the precipitation of
an iron product (hematite). Shareholders have been advised previously that recovery of most of
the hydrochloric acid consumed in the Company’s novel approach to leaching the Young nickel
laterite is absolutely essential for the commercial process to evolve. The Company views this
as a most significant and potentially and vital breakthrough.

The above testwork has been carried out in Canada and Sydney with confirmatory tests
in Perth W.A. Further confirmatory testwork is continuing.

Outotec

The company has already reported preliminary good nickel and cobalt recoveries from an
elegant variation of the above process (precise details are subject to a Confidentiality
Agreement). As a consequence a further 50,000 Euros has been allotted for Finland with the
objective of testing two stages of countercurrent leaching to try to reduce acid consumption and
identifying possible Capital and Operating Costs for this alternative approach. This latter work is
expected to be completed by end March 2008.

Direct Smelting for Young Laterites

This is also a viable option for treating the ‘Young’ laterites if the nickel price stays above
US.$9.50 per pound. Cobalt would not be recovered which is a disadvantage. Ultimately any
commercial plant may well include a smelting plant as an adjunct to an acid leach plant. This
latter approach is actually happening in China and the Company has been approached by
Yunnan Jiaming Technology Company Limited (Jiaming) on 11 December, 2007. Jiaming has
operated pilot plants for nickel leaching(200 mtpd) and ferro-nickel smelting (100mtpd). It also
has proprietary heap leaching technology and is interested in cooperation with Jervois by
offering technology, funds and equipment.