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Additional Information
Market: AIM
Sector: General Mining - Nickel and Cobalt
EPIC: ENK
Latest Price: 9.38p  (-2.60% Descending)
52-week High: 21.25p
52-week Low: 8.88p
Market Cap: 24.59M
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ENK
www.enk.co.uk

ENK (AIM/PLUS/ASX: ENK) is an emerging mid-tier nickel laterite producer focused on growth with assets in Turkey, the Philippines and Albania.

ENK has developed an innovative, low cost, environmentally sensitive heap leach technology, which offers a competitive edge over conventional nickel laterite processing.

Full ENK profile here
Is ENK a Buy, Sell or Hold?Get your FREE analysis of ENK
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European Nickel deserves fresh look, says Evolution

1st Jul 2011, 11:24 am by Kam Patel European Nickel deserves fresh look, says Evolution

Evolution Securities reckons it is time to take a fresh look at European Nickel (LON:ENK) following the impairment of its troubled Caldag project in Turkey and argues its shares are undervalued.

The 100% Caldag project has been hampered by delays in the Turkish government signing off a crucial forestry permit. A frustrated European Nickel (ENK) eventually put the put the project on ice.

In its final year statement on 30 June, ENK said it is considering all options regarding Caldag, including an outright sale, part sale or joint venture of the project. It is also reviewing the overall project footprint in order to present a more environmentally, socially and politically acceptable venture.

The most appropriate way to move forward with Caldag should become clearer over the next few months, said the company.

Evolution analyst Louise Collinge believes with Caldag now impaired by the group, it is “time to draw a line in the sand and take a look at the company going forwards”.

Collinge is particularly pleased by latest news on the company’s Acoje project, noting that “solid progress” is continuing to be made with feasibility work on the asset.

The company’s Acoje and Zambales deposits are based on Luzon Island in the Philippines.  The deposits have a combined resource of 840,000 contained tonnes of nickel.

The analyst adds that the company’s assurance in its final year statement that it does not plan to raise more capital in order to complete the feasibility study for its Acoje project is “very positive “ news.

Elsewhere, Collinge says that with European Nickel set to commence direct shipping of nickel ore through partners DMCI, positive cashflow generation can now be expected going forward.

The company's continuing progress in selling the non-core assets of the previous Rusina Mining represents another positive for the analyst.

Impairment aside, Collinge does not believe Caldag is worthless: “It appears very possible that the group will be able to generate value from this project by an outright sale or by bringing in a suitable partner which could enable its advancement.”

However, even if Caldag is removed from her valuation, Collinge still comes up with a price target of 32p – over 100% higher than the current share price. Evolution is therefore reiterating its ‘buy’ recommendation for European Nickel shares.

Mid-morning European Nickel share were up 0.13p to 14.75p.

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