Some more info, this is from mineweb.com referring to Rusina half way down the story.
European Nickel releases interim results Tuesday , 24 Jun 2008
24 June 2008 - London: European Nickel PLC (the "Company")(AIM: ENK) is pleased to report its interim results for the six months ended 31 March 2008.
Revenue of US$4.2 million earned from direct ore sales in Turkey.
Philippines presence strengthened with acquisition of 19.3% in Toledo Mining Corporation and 18.7% in Berong Nickel Corporation, for a total consideration of US$48 million.
Revised forestry permit application and detailed mine closure and rehabilitation plan submitted to the Turkish Ministry of Environment and Forestry for approval.
The Chairman's Statement is set out below.
The report may be viewed on the Company's website www.enickel.co.uk and will be posted to shareholders.
Contacts:
Andrew Lindsay, 020 7290 3130
Finance Director
European Nickel
Canaccord Adams Limited
Andrew Chubb 020 7050 6500
Alex Buck, BuckBias 020 7244 8053
Chairman's Statement
Dear Shareholder,
Since I last wrote to you the Company has made significant acquisitions in the Philippines increasing its presence there while continuing to advance the Çaldag and Devolli projects in Turkey and Albania. The formal submission of our revised Çaldag Forestry Permit application in May was an important milestone and we anticipate approval will be granted.
During the six month period ended 31 March 2008, the Company earned US$4.2 million from direct ore sales ("DOS") at Çaldag, resulting in a gross profit of US$739,000. The net loss for the period was US$6.4 million down from the US$5.1 million profit reported for the comparable period last year. A reduced volume of DOS sales, a significant decrease in the nickel price, lower interest income, the lack of the significant foreign exchange gain reported last year, the opening of our Philippines office and increased costs incurred at Çaldag were the main elements contributing to this lower income.
With the continuing delivery of long lead items at Çaldag and ongoing work there on infrastructure and design work the Company's fixed assets have continued to grow.
The Çaldag project - Turkey
Progress continues to be made at our Çaldag project in Turkey. The key activity over the past six months has been formalising a detailed mine closure and rehabilitation plan and agreeing a local socio-economic package with the Mayor of Turgutlu. This has culminated in our recent revised application in May 2008 for a Forestry Permit.
The detailed mine closure and rehabilitation plan is a new legislative pre-requisite to applying for a Forestry Permit, which was introduced in January 2008 by the Turkish parliament. The purpose of the legislation is to ensure mine rehabilitation begins in the first year of operations, according to Turkish and European Union Environment Management standards, rather than only towards the end of the mine's life.
In order to minimise the project's impact on the forestry area, and following extensive local and regional consultation, we have modified the plant and heap layout. These changes led to revision of the area for which a Forestry Permit is required and will have some increased cost implications for the project, which will be reported in a revised project cost estimate, together with other updated figures for capital and operating expenditure, once the Forestry Permit is received. However, as regards capital expenditure we have been fortunate to have been partially insulated from the current heated market for international construction and mining equipment as we fixed the prices of most of our long lead items when they were ordered last year.
DOS activities have continued during this financial period with over 85,000 tonnes of ore shipped to Greece and Macedonia. These shipments were from stockpiles accumulated last year and Çaldag's shipping programme has subsequently concluded. There is currently no plan to resume direct ore shipping which would require a cut-back of the open pit and additional permitting.
As a company, we recognise the need to have a "social licence" to operate. Our Turkish subsidiary Sardes Nikel has been working closely with the Mayor of Turgutlu, the nearby town, on a local socio-economic programme to ensure the local and regional area directly benefits from the project, beyond immediate employment. We will announce further details shortly, once this plan has been formalised.
An independent review of the carbon footprint of our heap leaching process has been completed confirming our initial positive assessment. Heap leaching has a very low energy consumption per tonne of nickel units produced compared with nickel produced by smelting. This coupled with the fact that the power used at the mine is a by-product from burning sulphur in the acid plant, with the excess power generated being sold into the Turkish grid, means that we will have one of the lowest carbon footprints in the nickel industry. In addition, with Turkey expected to sign the Kyoto protocol within the next few months, there are carbon units that we expect to be able to trade once we have commissioned the plant.
The Acoje/Zambales Project (Rusina Joint Venture) - the Philippines
The Pre-Feasibility Study ("PFS") on a heap leach at Acoje is progressing well and is on track for completion during the third quarter 2008. The PFS study will examine various conceptual infrastructure and process options before starting work on a Definitive Feasibility Study, which is anticipated to take some 12-18 months to complete.
The PFS is studying a project which would produce 25-30,000 tonnes of contained nickel per year over a 20 year period. Consultants have been engaged to undertake studies on the mine design, site selection, transportation, infrastructure and port options and to collect the baseline data information that will be required for the Environmental and Social Impact Assessment.
Metallurgical column test work continues on Acoje material at Çaldag in Turkey. These studies continue to demonstrate the rapid leaching characteristics of the Acoje saprolite ore and the slower but steady leaching of the limonite. Larger scale tests will be conducted on site at Acoje and at the Company's new test facility on Luzon Island as soon as the facilities currently being developed are ready. All of the data obtained from this test work activity will be used in the Definitive Feasibility Study to determine the project's operating parameters. Results to date are believed to indicate that the Acoje/Zambales ore will leach at a faster rate than the Çaldag ore and recoveries of at least 75% can be achieved to produce a high value nickel hydroxide product.
Direct ore shipping at Acoje commenced in February 2008 and has continued uninterrupted since then. This has generated some valuable cash flow for the project partners and helped confirm the mining grade and geology. The ore is shipped from a dedicated port facility which is the closest Philippine nickel laterite export point to China. It is also well protected by offshore islands from the prevailing weather and so is potentially capable of shipping all year round.
We have opened an office in Manila to manage our various activities in the region and this is being headed up by Ken Stein who recently joined us from BHP Billiton. Ken has over 30 years of international experience in mining, construction and heavy industry across Asia, Africa and Latin America and will further strengthen our team in the Philippines as the Company advances its interests in the country through the development phase to production.
The Devolli Deposit - Albania
Following the announcement of a JORC compliant inferred resource at Devolli of 36 million tonnes at 1.2% nickel in November last year work has continued on assessing various development alternatives and structures.
Corporate Transactions
In April the Company increased its shareholding in Rusina Mining NL to 8,836,430 shares, or 3.6% of the issued share capital, following its purchase of 2,954,078 shares at a price of A$0.20 (£0.094) per share, as part of a sub-underwriting arrangement with Rusina relating to its traded options that expired on 31 March 2008. The total consideration for the share purchase was £259,819.
We recently announced a transaction which strengthens our presence in the Philippines with the acquisition of strategic holdings in two large nickel laterite deposits on Palawan Island, which initial testing has shown to be amenable to heap leaching. The acquisition of 19.3% of AIM listed Toledo Mining Corporation and an 18.7% interest in unlisted Berong Nickel Corporation ("BNC"), for US$48 million payable in cash and/or shares, substantially increases our footprint on large, good grade laterite deposits in the region and also delivers immediate cash flow.
This transaction further demonstrates the competitive edge offered by our low cost, heap leach process as we are able to increase our access to laterite deposits through the provision of our process technology and project development experience and expertise.
Toledo has a 56.1% direct and indirect interest in BNC, which holds the Berong, Moorsom and Long Point nickel laterite deposits (each of which are 100% owned by BNC). BNC is currently generating positive cash flow through DOS sales to Australia and China from the Berong operations. In addition, Toledo has a 52% interest in the Ipilan nickel deposit and a 58% interest in the Ulugan nickel deposit.
Toledo has estimated that the Berong and Ipilan deposits have some 375 million tonnes of nickel laterite grading about 1.3% nickel with a total nickel content of more than 4.9 million tonnes. Our attributable nickel share is approximately 1.2 million tonnes, which boosts the group's equity resources to over two million tonnes of nickel.
The focus for the reminder of the year is on further advancing these projects towards full scale commercial production. At Berong there is an opportunity to considerably increase output of the DOS operation for relatively modest capital expenditure, while the surrounding areas are proved up to JORC status in preparation for subsequent on-site processing. At Ipilan drilling is currently underway and a JORC compliant resource statement is targeted to be completed by the end of this year. Our regional test facility on Luzon Island will start testing bulk laterite ore samples from the Acoje and Berong deposits by the end of 2008.
Outlook
The Company has now established a strong presence in the Philippines and with the investment in Toledo has a significant interest in some of the largest undeveloped, good grade nickel laterite deposits in the world. This, together with progress at Çaldag gives the Company exciting potential for significant future growth in achieving its goal of becoming a mid-tier, low cost nickel producer.
We are optimistic we have made considerable progress in Turkey with the revised submission for a Forestry Permit and eagerly await a positive outcome. Once we have received the Permit we will then move to finalising the project finance documentation and resume construction activity at the site.
