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Company Information for European Nickel Plc

AIM-ENK

www.enickel.co.uk

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AIM; ENK

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Company Statement

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.

Current Operations

Caldag – Turkey

Key Features

Forestry permit approved
Signed financing framework agreement with Chinese partners for provision of a guaranteed US$350 million debt facility
JXTC to acquire 20% of the Caldag project for US$20 million
Offtake agreement with JXTC for 50% of nickel production JORC proven reserve of 33.2Mt @ 1.13%Ni, containing 375,160t contained nickel
Nickel production target 20,000tpa
Life of mine 14 years

European Nickel’s flagship project is the Caldag mine, located near the deep port of Izmir in western Turkey. This will be the world’s first commercial nickel laterite heap leach operation, using the Company’s simple, low cost heap leach technology and represents the largest foreign direct investment in Turkey’s mining industry.

The project has received the green light for development, following approval of the forestry permit. A detailed rehabilitation plan for the mining area and the processing operation was also submitted as part of the Permit application, fulfilling new regulatory requirements introduced early in 2008.

The Caldag Project

The Çaldag project has been designed to be a low cost, open pit operation, which will produce 20,000tpa of nickel and 1,000tpa of cobalt in a mixed hydroxide product (MHP). This will be sold for processing into nickel and cobalt metal. Pending completion of project financing, construction on the project is targeted to start during 2009.
All major mine infrastructure and 80% of the engineering design work has been completed and US$70 million has been spent on long lead items, which are warehoused close by. An Environmental Impact Assessment has also been completed. Once construction has started, first production is expected to commence 13 months later.

The Acoje & Zambales Deposits – JV with Rusina Mining (AIM: RMLA, ASX: RML)

Key Features:

JV with Rusina Mining & DMCI on a 40% earn-in basis
JORC resource: 840,000t contained Ni
Positive PFS results
Definitive Feasibility Study underway, due for completion during 2009

The Acoje and Zambales deposits are located in the Zambales Mountains of Luzon Island in the Philippines.

European Nickel signed a JV agreement with Rusina Mining in mid 2007 to jointly develop the Acoje and Zambales nickel laterite deposits. European Nickel will fund the first US$10 million of the feasibility study costs to earn a 40% interest in the project and will lead the study and development of the project. Rusina will dilute down to 40%, with the outstanding 20% held by Rusina’s local partner, DMCI. Thereafter any additional funding will be provided equally by the two parties.

Acoje Pre-Feasibility Study
Highlights

JORC combined limonite plus saprolite Indicated Resource of 34.41 Mt at 1.09% nickel from an Inferred plus Indicated Resource of 50.14 Mt at 1.06% nickel using a 0.8% cut off grade
Estimated annual production of 24,500 tonnes of nickel and 930 tonnes of cobalt
Estimated cash cost of US$3.10/lb of nickel, net of by-products including refining costs at US$6/lb nickel price and US$10/lb cobalt price
Total development estimated at US$498 million
Estimated capital cost per annual pound of nickel of US$7.84
Post-tax Net Present Value of US$375 million (at a 10% discount rate) and US$6/lb nickel price and US$10/lb cobalt price
Internal Rate of Return of 28.3%
3 year payback period
Forecast annual sales of US$260 million, based on a long term nickel price of US$6/lb and including by-product credits
Significant potential to increase NPV and IRR with extended mine life by confirming the JORC Inferrred Acoje and Zambales Chromite deposits to JORC Indicated status

The pre-feasibility study results demonstrate an economically viable nickel laterite project using heap leach technology producing 24,500 tonnes a year of contained nickel and 930 tonnes of contained cobalt. The study for the Acoje project is based on a JORC Indicated Resource of 30.76 million tonnes at 1.12% nickel and 0.05% cobalt (at a 0.8% nickel cut-off for saprolite and a 0.9% nickel cut-off for limonite) giving the project an initial mine life of ten years. Mining will be at a rate of three million tonnes per annum, with a low strip ratio of 0.46, and cash costs are estimated at US$3.10/lb of nickel (at US$6/lb Ni), net of by-products including a refining charge of 25% of the nickel price and a cobalt price of US$10/lb. Further potential resources have been identified, the JORC Inferred Resources at Acoje and the Zambales Chromite deposit, which are expected to extend the mine life beyond 20 years and are expected to be confirmed to JORC Indicated Resource levels during the DFS.

It is proposed that the nickel laterite ore will be leached with dilute sulphuric acid produced from a sulphur burning acid plant to be built at the site and the nickel will be recovered in a precipitation plant in a two stage concentration process producing two saleable products. The first stage primary nickel product ("PNP") will contain 39% nickel and 1% cobalt and the second stage nickel product ("SNP") will contain 25% nickel and 1% cobalt. The project plans to use the same plant design as European Nickel's Çaldag project in Turkey where over 80% of the design for the precipitation plant is already complete.

The Acoje project's total development cost is estimated at US$498 million, including infrastructure and working capital, which equates to a capital cost per annual pound of nickel of US$7.76. The project has a post-tax Net Present Value of US$375 million (at a 10% discount rate), an Internal Rate of Return of 28.3% and a three year pay back period. Annual sales, based on a long term nickel price of US$6/lb, are forecast at US$260 million, including by-product credits which would generate US$108 million of free cash flow annually.

The Zambales Deposit
At the Zambales deposit, an exploration programme focusing on the nickel saprolite ore is underway to increase the resource further. An updated resource is expected to be announced before the end of 2008.

The Berong & Ipilan Deposits – Strategic Stake in Toledo Mining plc (AIM: TMC)
Key Features:

19.3% strategic stake in Toledo Mining plc
Berong JORC resource 150,000 tonnes contained nickel
Ipilan JORC resource 417,000 tonnes contained nickel
Combined nickel production target 60,000tpa for at least 20 years
MOU with China’s Jiangxi Tungsten to jointly develop a processing plant

The Berong Mine

European Nickel has a 29.5% effective interest in Berong (18.7% direct interest in Berong Nickel Corporation (BNC) and a 19.3% interest in Toledo). Toledo has a 56.1% and the Philippines partner, Atlas Consolidated Mining & Development Corporation has 25.2%.

The JORC resource (compiled June 2007) is 9.92 million tonnes at 1.55% nickel and represents only a small percentage of the tenement area.

A direct ore shipping (DOS) operation has been underway at Berong during the months of March to October, when the seas are calm enough to enable loading onto ships. The mine has a five year contract with BHP Billiton for 500,000 wet metric tonnes per annum.

In late 2008, European Nickel confirmed the economic viability of a heap leaching process at Berong, following the positive results of a Concept Study. The Study was based on a pre-JORC resource of 275 million tonnes at around 1.3% nickel to produce 25,000 tonnes per annum of nickel in a mixed hydroxide product at a cash cost of $2.99/lb of nickel, including cobalt by-product credits, over a 33 year life of mine. The capital cost, including port and infrastructure upgrades, has been estimated at $420 million which equates to a competively priced capital cost of $7.62 per annual pound of nickel.

Based on these parameters and a long term nickel price of $6.25/lb, the Concept Study estimates that the project has a net present value of $625 million (using a discount rate of 10%) and an ungeared internal rate of return of 25%.

A pre-feasibility study is due to commence during 2009.

The Ipilan Deposit

Toledo has a 52% interest in the Ipilian Deposit, with Brookes Nickel Ventures Inc and Celestial Nickel Mining Exploration Corporation owning 24% each. A 25 year life MPSA is already in place.

The JORC resource, which covers around 30% of the Ipilan MPSA area, is approximately 30.59 million tonnes at 1.36% nickel, which contains 417,000 tonnes of contained nickel. More than 90% of the resource tonnage falls within the “Measured” category.

In July 2008 Toledo signed a MOU with the Chinese company Jiangxi Tungsten (JXTC) for the construction of a commercial scale processing plant at Ipilan. Under the terms of the MOU, JXTC will fund the feasibility study, and construction of a commercial scale processing plant at Ipilan. In return JXTC will receive an equity interest in the processing plant and a long-term mixed hydroxide product (MHP) off-take agreement linked to LME prices. This effectively gives Toledo and the other partners a free carry and joint ownership of the commercial processing plant in return for a long-term off-take agreement, which European Nickel will benefit from through its indirect interest in the project.
Furthermore, Toledo will also have the option to acquire up to a 25% equity interest in the nickel refinery in China that JXTC is currently constructing. This refinery will be the world’s first dedicated solely to processing MHP and will supply nickel and cobalt products for chemical uses, such as in mobile phone and hybrid car batteries. Toledo expects to convert the MOU into a legally binding agreement during the first half of 2009.

The Devolli/Koko Joint Venture - Albania
Key Features

Joint Venture with privately owned Balkan Resources Inc
Devolli JORC resource of 427,000t contained nickel (35.6 million tonnes at 1.2% nickel)
Koko historic resource of approximately 30 million tons at approximately 1.2% nickel
Nickel production potential 15-20,000tpa
Life of Mine 15-20 years

European Nickel recently announced a joint venture with the privately owned Balkan Resources to jointly develop Balkan’s Kokogllave (“Koko”) and the Company’s contiguous Devolli nickel laterite deposits in Albania.

The deposits are located in south-eastern Albania, close to the Greek border. The Devolli nickel laterite deposit has a JORC resource of 427,000 tonnes of contained nickel (35.6 million tonnes at 1.20% nickel). Balkan has completed a NI 43-101 technical report on its Koko nickel laterite deposit and it is intended to develop both deposits as one single mining operation. The Koko tenement has a historic resource estimate, which is neither JORC nor 43-101 compliant, of approximately 30 million tons at a grade of approximately 1.2% nickel.

Under the terms of the agreement, Balkan will earn its 50% interest in the joint venture by contributing the Koko deposit and funding, through to completion, a pre-feasibility study (“PFS”) on the combined Koko/Devolli deposits to Canadian NI 43-101 standards. European Nickel will earn its 50% interest by contributing the Devolli deposit and granting access, via a licence agreement, to its heap leach technology, knowledge and experience.

The agreement is subject to certain conditions, including the completion of legal and technical due diligence by both parties, and it is intended to complete a joint venture agreement by 31 December 2008. In the meantime the companies will combine their offices in Albania thus reducing the expenditure burden for each company, and Balkan will commence work on the PFS. Once a PFS acceptable to both parties has been completed, funding shall thereafter be on a 50/50 basis. If Balkan fails to complete the PFS by 31 December 2010, it shall transfer its interest in the Koko deposit plus all engineering, exploration and other data and studies conducted as part of the PFS to the Company for nil consideration.

The PFS, expected to cost some US$5-7 million, will require extensive drilling to bring sufficient tonnes into the indicated category to support a proposed production of 15,000-20,000 tonnes a year of contained nickel over a mine life of 15 to 20 years. It will also be necessary to compile the engineering, mine development planning, environmental, infrastructure and other reports to substantiate the viability of this operation. The Company and Balkan expect the PFS to be completed by the end of 2009 and, if all of the studies are positive, the mine could be in production as early as 2011.

Heap Leach Process

European Nickel has commercialised a proprietary, low cost heap leach process for nickel laterites.

European Nickel has demonstrated the percolation and extraction of nickel at a large scale demonstration plant at Çaldað in Turkey with continuous operations over a three year period, irrigating the heaps with dilute sulphuric acid and producing saleable mixed hydroxide product from the downstream precipitation plant. Recoveries of 72% have been used in the Çaldað bankable feasibility study for both nickel and cobalt.

Environmental Benefits of Heap Leach Technology
European Nickel believes that the heap leach technology it has developed provides significant environmental benefits over conventional nickel laterite operations. Operation of the heap leach in close proximity to the mine minimises the transport distances for the unrefined ore, thereby reducing truck movements on roads.

The heap leach technology also considerably reduces the carbon dioxide emissions generated per tonne of nickel produced when compared to conventional nickel laterite operations. European Nickel is assessing options to improve this reduction further through conventional means such as tree planting and CO2 capture.

The conversion of sulphur to sulphuric acid at each site’s acid plant releases energy which can be used to create steam and in turn generate electricity which will be in excess of the project’s needs. The sulphuric acid is entirely used up in the heap leaching process. The excess power generated will be sold to the local electrical grid which will reduce the requirement for the grid to be supplied with electricity generated by burning fossil fuels.

Geographical Spread

Western Turkey, near Izmir, the Çaldag deposit The Balkans, including Serbia, Bosnia, Albania and Kosovo

Board of Directors and Key Management

David Whitehead	(Non-Executive Chairman)
Simon Purkiss	(Managing Director)
Andrew Lindsay	(Finance Director)
Sir David Logan	(Non-Executive Director)
Paul Lush	(Non-Executive Director)
Chris Pointon	(Non-Executive Director)
Euan Worthington	(Non-Executive Director)

Key Management
Kemal Yildirim	(General Manager, Çaldag)
Ken Stein	(Country Manager, The Philippines)
Robert McLearon	(Company Secretary and Financial Controller)
Mike Oxley	(Business Development Manager)

Company Address

49 Albemarle Street
London, United Kingdom W1S 4JR


Telephone:	+44 20 7290 3130
Facsimile:	+44 20 7290 3149
Email:	info[at]enickel.co.uk
Website:	http://www.enickel.co.uk

Additional Address/Key Contact

Turkey Office
Sardes Nikel Madencilik A.S.
Akdeniz Caddesi
No: 14 Birsel Is Merkezi
Kat: 5 D. 502
35210 Konak
Izmir
Tel: +90 232 455 0030
Fax: +90 232 489 8060
www.sardesnikel.com.tr

Serbia Office
Chris Masurenko - Regional Geologist
European Nickel d.o.o.
Beogradska 27
1100 Belgrade
Serbia
Tel : +381 11 323 4652
Fax: +381 11 323 8896

Albania Office
Adriatic Nickel Resources Sh.p.k.
Rruga " Vaso Pasha "
Pallati 13/1 , Kati i 2
Ap. 6 Tirane
Albania
Tel + 355 4 268 133
Fax +355 4 268 133

Philippines Office
Asian Nickel Research & Technology Corp.
10/F SSHG Law Centre
105 Paseo de Roxas, Makati City
1226 Metro Manila
Tel: +632 667 6700
Fax: +632 667 6710

Capital

384,727,857 shares in issue

Annual General Meeting

April, London

Year End

30 September

Nominated Brokers

Canaccord Adams Limited
Cardinal Place
7th Floor
80 Victoria Street
London, SW1E 5JL

Nominated Advisors