merger imminent

The co. has given the talk of a European Nickel /Toledo/Rusina merger legs in the latest quarterly-"The Co has continued to discuss the possibility of undertaking strategic consolidation within the industry sector....."It would appear to make perfect sense to simplify the current structure particularly with the first mixed hydroxide product from ENs Caldag next year and Chinas Jiangi Tungsten building the world first MHP processing plant in 2010.The economics of heap leach extraction of Ni from laterites are compelling with cash costs sub $3US/lb and capital cost/annual lb sub$8 vs $20-25 for HPAL + environmental advantages ie produces excess energy which can be fed back into grid/no tailings dams.Currently EN have an agreement with Jiangxi Tungsten to take 50% of Caldag production and Toledo (Canadian based Phillipines miner) a MOU with Jiangxi re the feasibility of constructing a local MHP processing plant.A single entity would have a geographically spread and very large resource with equity in downstream processing.RML,s Acoje project has a resource of 840,000 tonnes of contained Ni and at $6/lb NI (currently $8.80)would have revenue of 260 mil/yr and free cash of 108 mil RML would be entitled to 40% and at current market cap about 18 mil appears to be grossly undervalued.Technologicals risks remain however EN have been extracting NI for 3 yrs from " dry" laterites at Caldag and tests so far have been excellent on the tropical laterites and the DFS should be completed early 2010.It,s an interesting story which has slipped under the radar of most -2010 will be really pivotal

cheers VAN