2 February 2010 - London: European Nickel PLC ("European Nickel" or the
"Company") (AIM, PLUS: ENK) today announces that it has undertaken a placing to
raise US$19.4 million (approximately £12.1 million) (the "Placing"). The
Placing was carried out by Mirabaud Securities LLP ("Mirabaud") as lead broker.
A total of 172.4 million new ordinary shares (the "Placing Shares") have been
placed at a price of £0.07p with certain institutional investors (the
"Placees"), of which 76.3 million are expected to be issued and admitted to
trading on AIM on 8 February 2010 (the "Firm Placing").
The Placing Shares have been placed in two tranches. The first tranche of 76.3
million Placing Shares, raising gross proceeds of US$8.6 million (approximately
£5.3 million) (the "First Tranche Placing Shares"), has been placed firm under
the existing authorities granted by shareholders at the Company's last annual
general meeting (the "Existing Authority"). The remaining 96.1 million Placing
Shares, raising gross proceeds of US$10.8 million (approximately £6.7 million)
(the "Second Tranche Placing Shares"), have also been placed firm but are
conditional,inter alia, on the passing of the resolutions (the "Resolutions") to
be proposed at the Company's annual general meeting (the "AGM") to grant the
directors the necessary authorities to issue the Second Tranche Placing Shares
and the completion of the scheme of arrangement with Rusina Mining N.L., which
was announced separately today (the "Scheme").
The AGM will be held on 29 March 2010 and the Scheme is expected to complete in
late May 2010. It is expected that admission will take place and that trading
in the Conditional Placing Shares will commence no later than three business
days after the date that the Company announces that the Scheme has become
effective.
Concurrently with the issuance of the First Tranche Placing Shares, a further
estimated 1.25 million new ordinary shares will be issued to Endeavour Financial
Corporation (the "Endeavour Shares") in lieu of interest on the loan facility
provided to the Company as previously announced on 27 July 2009 and as increased
on 8 December 2009 (the "Loan Agreement"). As with the First Tranche Placing
Shares, the Endeavour Shares are being issued under the Existing Authority and
will be issued at a price equal to the volume weighted average share price for a
number of days prior to the date the shares are issued in accordance with the
terms of the Loan Agreement.
Reasons for the Placing
Whilst the US$20 million project level equity financing and the project debt
financing funding for Çaldağ continues to progress through the necessary Chinese
approval processes, both aspects of funding have taken longer than was
originally indicated to the Company by JiangxiRare Earth and Rare Metals
Tungsten Group Company Limited ("JXTC") and China Tianchen Engineering
Corporation ("TCC") under the Çaldağ Financing Framework Agreement, which was
signed in December 2008.
The Company now requires bridging finance for the period until the satisfaction
of the conditions precedent relating to the US$20 million investment by JXTC
under the Framework Agreement, and this Placing will in part provide the
bridging finance for this interim period.
The gross proceeds of the Placing will be used as follows:
+-----------------------------+-------------------------------+-------+
| | Firm Conditional Placing | TOTAL |
| | Placing | |
| | | |
| Use of funds | | |
| | | |
| Repayment of Endeavour loan | 5.0 -- | 5.0 |
| | | |
| Forestry licence annual fee | -- 2.3 | 2.3 |
| | | |
| Acoje | 1.0 4.3 | 5.3 |
| | | |
| Çaldağ | 1.0 1.8 | 2.8 |
| | | |
| Working capital purposes | 1.6 2.4 | 4.0 |
| +-------------------------------+-------+
| | 8.6 10.8 | 19.4 |
| | | |
+-----------------------------+-------------------------------+-------+
The Placing Shares (together with the Endeavour Shares, the "New Shares") will
be issued credited as fully paid and will rankpari passu with the existing
Ordinary Shares, including the right to receive all dividends and other
distributions declared, made or paid on or in respect of such shares after the
date of issue of the New Shares. The issue of the total number of New Shares
represents approximately 36.6 per cent. of the current share capital.
The Company advises that, following the issue of the Placing Shares, the total
number of issued ordinary shares will be 643,084,857, each share having equal
voting rights.
Simon Purkiss, Managing Director of European Nickel said "I am pleased by the
strong support the placing has received on the back of the merger that we have
also announced today with Rusina Mining NL our joint venture partner at Acoje.
With these additional funds we will advance Çaldağ and Acoje while working to
finalise the financing from China".
For more information, please visit www.enickel.co.uk or contact:
Simon Purkiss or Andrew Lindsay
European Nickel
Tel: +44 20 7290 3130
Mike Jones or Andrew Chubb
Canaccord Adams
Tel: +44 20 7050 6500
Alex Buck
BuckBias
Tel: +44 7932 740 452
Mirabaud Securities LLP (''Mirabaud''), which is regulated and authorised in the
United Kingdom by the Financial Services Authority, is acting as lead broker to
the Company in relation to the Placing. Mirabaud is not acting for any other
persons and will not be responsible to anyone other than the Company for
providing the protections afforded to customers of Mirabaud or for providing
advice in relation to the contents of this announcement, the applications for
admission or the Placing. Mirabaud has not authorised this announcement. No
liability is accepted by Mirabaud for the accuracy of any information or
opinions contained in or for the omission of any information from this
announcement for which the Company is responsible.
[HUG#1379753]