European Nickel
European Nickel is a UK registered company and listed on the AIM and PLUS markets under the ticker symbol ENK. European Nickel has developed a simple, low cost heap leach process for the extraction of nickel from nickel laterites, the most abundant form of nickel in the earths crust.
The Company is focused on finding and evaluating nickel laterite deposits that are amenable to the Companys heap leaching process and, where economically viable, developing these deposits into commercial mining and processing operations. The Companys current projects are located in Turkey, the Philippines and Albania, offering geographic and geological diversification.
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European Nickel has financing in place for Caldag project in Turkey
European Nickel PLC announced a financing agreement with Chinese partners for the Caldag nickel laterite project in Turkey a day after it said it received a crucial permit from the authorities allowing to take the project further.
Under the agreement, China Tianchen Engineering Corporation (TCC) will provide a credit guarantee of up to US$350 million to enable a consortium of predominantly Chinese banks to arrange project financing for Caldag.
European Nickel has also agreed that Jiangxi Rare Earth and Rare Metals Tungsten Group will acquire a 20 percent equity interest in the project for US$20 million and a offtake deal for 50 percent of the mine's nickel production.
TCC will also be the company’s preferred contractor for the development of any of its nickel laterite projects for a period of five years and will grant TCC, free of charge, a 2 percent interest in the Caldag project.
The off-take is conditional on BHP Billiton agreeing to release this material for sale to JXTC, as currently all of the nickel production from Caldag is committed to BHP Billiton.
European Nickel said BHP Billiton has indicated to the company that it is prepared to grant such a release and that it wishes to receive the other 50 percent of Caldag's contained nickel production.
The group also updated its project costs for Caldag from its April 2006 feasibility study, saying that the required capital expenditure is rising 16 percent to US$277 million, representing a cost of US$6.12 per pound of nickel. Total development costs, including working capital, escalation and financing costs, have increased to US$428 million from US$300 million, mainly due to higher fees and interest associated with increased level of debt and higher operating costs as well as reduced revenue generation due to the lower nickel price forecast.
Of the total project cost of US$428 million, US$70 million has already been spent and the balance will be financed by US$350 million of project finance and US$8 million of the equity provided by JXTC.
