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European Nickel close to securing forestry permit for Caldag project in Turkey

European Nickel close to securing forestry permit for Caldag project in Turkey

European Nickel (LON:ENK) summed up its activities for the quarter to 30 September and said that the signing of the forestry permit for its key Çaldağ nickel project in Turkey is imminent.

The permit will put the company closer to securing the necessary project financing.

During the period, European Nickel raised US$60 million via a share placement to the Hunter Dickinson group, of which US$50 million will provide the equity portion of the Çaldağ project financing and US$10 million for working capital.

Project financing for the implementation of a US$300m debt facility and US$25 million overrun facility at the Çaldağ project has been proceeding in parallel with all construction and permitting activities during the quarter.

This has involved negotiation and agreement of all required documentation with the two mandated lead arranging (MLA) banks, Societe Generale and Unicredit.

The completion of the required documentation is subject to finalisation of the major contracts and minor outstanding operational issues, including receipt of the forestry permit.

The application for the forestry permit is now complete and the permit is currently awaiting final signatures at the Ministry of Environment, which the company said is imminent.

“Up until now, the permit has not been on the critical path, but during the coming quarter it will be. The company has no reason to believe the permit will not be re-issued,” European Nickel said in the statement.

The operational progress in Turkey achieved during the quarter also included the tendering of major construction contracts, which are currently being finalised.

ENK said that all major contracts were within or below the revised capital estimate for the project.

The company is preparing to commence the heap leach at the Acoje operations in the Philippines in 1Q 2011 following the conclusion of the wet season. The definitive feasibility study for the project is expected to be completed during 2011.

Post reporting date, several formal bids have been received for the company's non-core copper and gold assets, including the Abogado property in Sultan Kudarat, the Barlo property north of Acoje, and the Pan De Azucar & Guimaras projects in Iloilo.

The company also announced that it will be changing its name from European Nickel to ENK to “reflect the global nature of the companies business going forward”.

ENK will also change its year end balance sheet date to 31 March.

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