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 which has developed a novel heap leach process for application to the nickel laterites in Turkey and the Balkan Region. The biggest challenge to the development of nickel laterite projects are the capital costs to develop the projects.

Very few nickel laterites (the oxide form of nickel in the earth's crust) can be upgraded, therefore large metallurgical operations need to be built to treat the nickel ores, and this leads to large capital costs and the need for very large deposits to support the capital expenditure.

The application of heap leaching to nickel laterite processing offers the opportunity to significantly reduce the capital requirements for nickel processing. However the majority of nickel laterites contain a large percentage of clay minerals, which reduces the permeability of any heap, thus complicating the leaching process. The Balkan laterites have low clay contents which makes them amenable to heap leaching and this characteristic has now been demonstrated on a large scale by European Nickel at the Çaldağ project in western Turkey.

Current Operations

Caldag

Key Features:

100% ownership
JORC mineable reserve of 255,000t contained nickel
Nickel production target 20,000tpa
Life of Mine 20 years

The Çalda mine, located in western Turkey, is European Nickel’s first mine and is designed to produce 20,000tpa of nickel and 1,200tpa of cobalt in a mixed hydroxide product that will be sold to BHP Billiton for processing into nickel and cobalt metal.

Open pit mining operations commenced in late 2007 with direct ore shipments. The company has stockpiled 100,000 tonnes of ore and direct ore shipping (DOS) to Greece and Macedonia is underway while nickel prices remain strong.

The start of full-scale commercial production has been delayed,pending the approval of a key forestry permit by the Turkish Government. In May 2008 European Nickel submitted its application for the forestry permit along with a detailed mine rehabilitation and closure plan for approval. This is expected to take approximately 2 months. However, all the necessary mine infrastructure and 80% of the engineering design work has been completed on schedule and within budget. Once the forestry licence is granted, first production will follow a year later, with ramp-up to full annual production of 20,000 tonnes of nickel and 1,200 tonnes of cobalt in 2010.

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.

The basis for the study was the November 2008 Snowden Mining Industry Consultants (Snowden) resource estimate. The companies anticipate that further resources will be upgraded at Acoje by infill drilling in 2009.

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.

European Nickel will, pursuant to the terms of the joint venture, earn a 40% economic interest in the Acoje deposit by spending US$10 million on the metallurgical heap leach trial, engineering design and permitting, following which Rusina will hold 40% and their Philippine partner, DMCI Mining Inc., will hold 20%.

The potential development and commercial mining operation at Acoje, will have a significant positive economic impact on the local and regional community. During the development and construction phase, approximately 50% of the construction costs are estimated to be spent within the Zambales region and of the US$498 million total development cost, an estimated 70% will be expensed in the Philippines. This project will provide a significant economic and social boost to the Zambales region.

A copy of the Executive Summary of the Pre-Feasibility Study is available under "Latest" on our website.

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
Combined resource: 375Mt at 1.3% Ni
Berong JORC resource 148,800t Ni, DOS underway
Ipilan JORC resource due Q3 2008, DOS planned late 2009
Targeting combined production potential: +60,000tpa Ni and Life of Mine 20 years
Positive leach testwork
MOU with China’s Jiangxi on Ipilan for a jointly owned 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%.

Open pit mining is underway at Berong, which has five year Direct Ore Shipping (DOS) contract with BHP Billiton. Negotiations are expected to conclude before the end of 2008 to double this to 1 million wet metric tonnes per annum. Berong is also shipping to China. Shipping occurs between the months of March and October.

Berong is currently considering on-site processing options, including heap leaching. Bulk samples will be trialed by European Nickel in Q4 2008.

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. Toledo has the option to acquire a 40% interest in each of Brookes & Celestial, which would increase its holding in Ipilan to 71.2%.

The pre-JORC resource at Ipilan is estimated to be more than 100Mt at 25m and 50m drill spacing. Snowdens is currently preparing a JORC resource, which is expected to be announced during Q3 2008. The limonite : saprolite ratio is 50:50.

A 25 year life MPSA is already in place and EIA/EIS for the DOS is underway, with production planned for Q4 2009. Metallurgical testing is also underway.

In July 2008, an exciting JV deal was been signed with the Chinese company Jiangxi Tungsten to develop the Ipilan deposit using atmospheric leaching to produce 40,000tpa of a mixed hydroxide product (MHP). This will be fully funded by Jiangxi in return for a 100% life of mine off-take agreement, linked to the international prices of nickel and cobalt.

The JV leach plant will be co-owned by Ipilan (35) & Jiangxi (65), once the final negotiations have been concluded. Jiangxi will also fund the feasibility study and arrange for qualified Chinese EPCM contractors to build the plant. Alongside this, Jiangxi will build a 3,000 - 5,000 pilot leach plant in China by Q4 2009. Ipilan will be the sole supplier of ore, up to 600ktpa, to the pilot plant. The plan is to commence DOS in Q4 2009 to the pilot plant. Construction of the commercial scale JV plant is expected to commence late 2010/early 2011 and commissioned during 2011.

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.

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

Euan Worthington	Non Executive Director
Sir David Logan	Non Executive Director
Paul J Lush	Non Executive Director
Chris Pointon	Non Executive Director

Robert McClearon	Company Secretary
Mike Oxley	Business Development Manager
Kemal Yildirim	General Manager, Çaldag)

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