merger with enk, page-8

Here is my attempt at an objective view on the status of the two companies prior to the merger.

Comparison of ENK and RML prior to merger and placing announcement.

ENK market cap of ?32.9m (470m shares @ 7p).
RML market cap of ?16.2m (302m shares @ 5.35p)

Comparing contained nickel (JORC standard only)

ENK total of 866,917t attributable
contained nickel. Market value ~ $15.9b
made up from following:

Caldaq (78%) = 293,436t JORC all RESERVE
Acoje (40%) = 220,308t Indicated & Inferred
Zambales (40%) = 110,920t Inferred
Devolli (50%) = 213,500t Measured, Indicated & Inferred
Berong (18.7%) = 28,753t

RML total of 331,228t attributable
contained nickel. Market value ~ $6b
made up from following:

Acoje (40%) = 220,308t Indicated & Inferred
Zambales (40%) = 110,920t Inferred

Status of main projects:

ENK (Caldaq)
Ready for construction
US$150m of CAPEX already spent
Awaiting US$350m loan for build
First production c. late 2011

RML (Acoje)
PFS completed
DFS in progress (late 2010/early 2011)
CAPEX requirement US$498m (although TCC could possibly save 15%)
First production c. late 2012/early 2013

ENK had already earned 20% of their attributable stake in Acoje with remaining 20% due on completion of $10m funding for trial heap leach plant.

RML was already relying on ENK HL technology and staff to make the economic case for full scale heap leach production at Acoje - and the project partners were aiming for equal division of project

earnings on completion of development.

There will be obvious economies of scale and due to the close partnership between RML & ENK over the heap leaching processing there was always a strong possibility of the two companies merging.

In my view, the merged company will be in a better position to negotiate with the likely off-take partner (JXTC) and, as already announced, the construction and loan guarantee'er (TCC).

All shareholders will have to make up their own minds but I am of the opinion that it makes perfect sense to join forces.
CPDLC