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.
European Nickel extends Endeavour bridge loan while it finalises Caldag nickel project financing
European Nickel PLC (AIM, PLUS: ENK) said it yesterday agreed with Endeavour Financial Corp to extend the US$4 million bridge loan facility announced on July 27 2009 to November 30 2009 whilst it finalises its longer term funding requirements.
Following the approval by the board of Jiangxi Rare Earth and Rare Metals Tungsten Group Co Ltd (JXTC) in late July, JXTC has been advancing the Jiangxi provincial government's approval process for the US$20 million overseas investment in the Caldag project in Turkey through the various government departments.
The project debt financing is also proceeding well as China Tianchen Engineering Corp has now submitted the application for credit guarantee insurance of up to US$350 million to the government-backed export credit agency providing the cover for the debt facility, which is now being processed.
European Nickel expects to provide further detail to shareholders in due course.
Endeavour is acting as financial adviser to the company on the Chinese debt financing.
In July, the company won a deal from BHP Billiton PLC (ASX: BHP; LSE: BLT) releasing it from its obligations under the Caldag off-take agreement announced in June 2006. Originally, only 50 percent of Caldag's off-take was going to be sold to JXTC but this has been increased to 100 percent by mutual agreement to facilitate the 100 percent debt financing of the project from China.
European Nickel will pay BHP Billiton US$10 million on first drawdown of the project finance facility and a further 24 monthly payments of US$1 million, starting once nickel output has reached 50 percent of the Caldag plant's design specification of 20,400 tonnes per annum of contained nickel.
Caldag contains a JORC proven reserve of 33.2 million tonnes at 1.13 nickel, for a nickel content of 375,000 tonnes. Here European Nickel have developed and demonstrated a new process for the extraction of nickel and cobalt from European “dry” laterite ores: heap leaching, to produce a mixed hydroxide product (MHP) for further refining into its component metals.
A bankable feasibility study was concluded in 2006, based on an operation producing 20,400 tonnes of nickel in concentrate per annum and 1,200 tonnes of cobalt. Recent estimates calculate a total capex of US$428 million with operating costs of US$1.99 per pound.
