European Nickel's Purkiss says bureaucracy and politics to blame for delays in Turkey
Friday, December 10, 2010 by Ian Lyall
proactiveinvestors.co.uk
NK will concentrate on its Acoje nickel laterite project in the Philippines, which it intends to fast-track. NK will concentrate on its Acoje nickel laterite project in the Philippines, which it intends to fast-track.
A combination of “bureaucracy and politics” is to blame for permitting delays that have forced European Nickel (LON:ENK, ASX:ENK) to place its Caldag project in Turkey on care in maintenance, according to deputy chairman Simon Purkiss.
“Unfortunately, there is an election coming up in Turkey in May next year and it seems the permit doesn’t want to come out until then,” Purkiss told Proactive Investors.
“It was signed by regional officials four to six weeks ago. Every Monday it is supposed to be coming out. But it has not.
“So we have taken the decision that we can’t hang on. If it does pop out, then that is great. We will re-evaluate our position.
“We’d geared everybody up. We had banks doing their work, lawyers etc. We had done everything we could do.
“There are some trees in the area and that’s why we are waiting for a forestry permit. The tree psyche in Turkey is strong. But we have already planted 20-30,000 trees.”
Purkiss said one particular “non-governmental group” campaigned against the development.
But he put the protest into context when he said: “Environmental groups managed to get 200 people to a rally in the town of Turgutlu.
“We opened a small office there and there were 4,000 applications for jobs. So that perhaps underlines the scale of local disquiet.”
On the surface it would appear that the loss of the off-take deal with BHP Billiton (LON:BLT, ASX:BHP, NYSE:BHP & BBL) is a major blow.
However Purkiss believes it presents an opportunity: “The deal was negotiated about four years ago. So our thinking is we will be able to get a better price out there in the market.”
European Nickel now has some breathing room to consider its next move. In the meantime cash burn in the country will reduce to around US$150,000 a month from around US$400,000.
“We have the next three or four months to decide whether to cancel the bank finance,” the deputy chairman said.
“If it doesn’t happen in a month or so we will have moved a lot of the people and slowed down.
“It would probably take a month or two to get Caldag up and running.”
In the meantime, ENK will concentrate on its Acoje nickel laterite project in the Philippines, which it intends to fast-track.
A definitive feasibility study began last March, following a positive pre-feasibility study which confirmed an economically viable nickel heap leach project.
“If anything it has better prospects than Caldag, it leaches faster and is fully permitted,” Purkiss said.
“What we need to do there is run the trial heap which has been constructed.
“It has been waiting in the wings. But we can switch it on pretty quickly.
“We want to demonstrate to any future banking consortium that heap leaching works on this material too.”
At 10.35 am, European Nickel shares were down 8.25 pence, or 26.2 per cent, at 23.25 pence. |
