Nickel Laterite Heap Leaching aldag project Turkey

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Nickel Laterite Heap LeachingÇaldag project -
Turkey

• Association of Mine Analysts
• Little Ship Club
• London - March 2005

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Company Information

• 4 years privately funded development
• 2.5m convertible loan from Standard Bank Nov 03
• Listed on AIM, 31st March 2004, raised 15m
• 98.2m shares in issue
• 44.8m warrants and options
• Cash 6m
• Market capitalisation 35m

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Major shareholders
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Group Structure
European Nickel PLC
97.7
100
100
100
100
100
Bosphorus Nickel Madencilick
Adriatic Nickel Resources sh.p.k
Dinara Nickel d.o.o. Beograd
Morova Nickel L.L.C
Vardiste Nickel doo Zvornik
Ozren doo Sarajevo
Albania 2 years exploration in country 8 deposits
evaluated 2 pre-feasibility studies
Turkey 2 years in country Çaldag deposit licensed
and permitted 40,000 tonnes trial mine and
export Trial heaps under irrigation
Serbia Montenegro Several deposits identified 1
exploration licence granted
Kosovo Several deposits identified 5 exploration
licence applications
Republic Srbska Several deposits identified
Federation of Bosnia and Herzegovina Several
deposits identified
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The Team

• Directors
• Felix Pole
• Simon Purkiss
• Andrew Lindsay
• Euan Worthington
• David Logan
• Paul Lush
• Management
• Mike Oxley
• Chris Masurenko
• Turkish team

• Consultants
• Wardell Armstrong
• Geology
• Mining
• Metallurgical auditing
• Scott Wilson/Encon
• Environment
• Aker Kvaerner - Brisbane
• Engineering
• GBM
• Metallurgical pilot plant design
• Metallurgical testwork
• Wardell Armstrong
• RPC
• BHP Billiton
• On-site

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Nickel laterite developments

• Nickel laterite
• Oxide, most abundant form
• 70 of world reserves
• 50 of world production (balance sulphides)
• Growing demand for nickel source laterites
• Conventional treatment High Capital Costs
• Ferronickel smelter
• Koniambo 2.2bn 60,000 tpa nickel
• Pressure acid leach
• Goro 1.9b 60,000 tpa nickel
• Ravensthorpe 1.4bn 45,000 tpa nickel

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EN Development

• Balkan laterites
• Low clay content
• Rock characteristics
• Variable hardness and leach characteristics
  between deposits
• Developed laterite profile
• Heap leaching testwork
• 10 years, various laboratories
• Similar process to copper heap leaching
• Commercialisation by European Nickel

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Çaldag project location

• Çaldag deposit 75km from Izmir Second largest
  deep water port in Turkey, 3rd largest city

• Western Turkey
• Good infrastructure
• Deep water port
• Good highways
• Rail 5km from deposit
• HV power at site

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Çaldag Project Production

• 2 million tpa mining rate
• 15,000tpa contained nickel
• 800tpa contained cobalt
• Mixed hydroxide product, 30-35 metal content
• Sulphur burning acid plant
• Capex - current estimate 150m

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Çaldag JORC Resource
Source Butty Herinckx and Partners

• 430kt contained nickel
• 19kt contained cobalt
• 6 billion contained nickel (current prices)

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Drilling Programme

• 30,000 metre drill programme completed
• Updated resource April/May 2005
• MTA geological data integrity confirmed

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Commercial trial heap

• Objective
• Demonstrate permeability
• Demonstrate recoveries
• Measure acid consumption
• Produce product
• Ship product
• 1st Heap
• Irrigation started Oct 04
• 2nd Heap
• Irrigation started Feb 05
• 3rd Heap
• Under construction
• Downstream plant
• Being commissioned

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New process Yes .

• Heap design copper gold industries
• Materials, liquid control, HDPE science
• Downstream processing - simple
• Iron precipitation numerous installations
• Nickel cobalt precipitation
• Cawse
• Ravensthorpe
• Most newcomers
• Economics
• Low power, low emissions
• Sulphur and acid prices

but not completely
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BHP Billiton

• Worlds largest mining group
• Nickel division
• Yabulu refinery suited for MHP product
• Other novel nickel technologies
• Potentially 3rd largest nickel producer in world
• 10 years work on nickel laterite heap leaching
• Patents
• Joint development programme on nickel laterite
  heap leaching

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Joint Development

• Options
• 200k on signing
• 1.5m paid on start of irrigation
• 4.3m second option before 60 nickel extraction
• Option to JV projects depending on size

• Offtake
• Right to 50 of Çaldag offtake on exercise of
  second option at market rates
• Rights to further 30 at market rates

• Technology
• Pooling of heap leach technology
• Access to BHPBs technology and patents for heap
  leaching and product definition
• Input from BHPBs technology centres.

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Programme

• Heap construction started May 04
• Heap 1 Irrigation October 04
• Heap 2 Irrigation March 05
• Commission downstream plant March 05
• Heap 3 Irrigation April 05
• Feasibility study complete 3Q05
• Financing complete End 05
• First Product 1Q07
• Full production 2Q08

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Balkan regionPast and current production

• Current production
• Greece Larco ferronickel smelter
• Macedonia Feni ferronickel smelter
• Past production
• Albania ferronickel production
• Serbia (Kosovo) ferronickel production
• Region
• 26,000 tpa nickel production in ferronickel
• High cost producers (high capital installations)

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Regional potential
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Lipovac

• Disseminated nickel sulphide
• Drilled
• 100km2 area
• 83 drill holes
• 1 adit
• Open for extension
• Laterite crust
• Underground mine
• Thick deposit (20-30m)

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Mokra Gora

• Large nickel laterite
• Drilled
• 100km2 area
• 38 drill holes
• 3 adits
• Open for extension
• Initial metallurgical tests positive
• Challenging region

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Conclusions

• European Nickel has
• Cash
• Alliance with the worlds largest mining company
• Proven management
• A resource base to support the project
• Future growth developing similar deposits in
  Turkey and the Balkans
• Nickel in solution from heap leaching a laterite
• Shortly - Product

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