European Nickel in $60 mil deal to advance Turkish Caldag project

European Nickel has signed an agreement with Canadian mining investment house Hunter hand glass grindingDickinson Inc. to raise $60 million in two private share placements for its Caldag nickel project in western Turkey.

The immediate placement of 10.5 million ordinary shares will raise GBP3.36 million ($5 million), while a second tranche of 83 million ordinary shares will raise GBP36.7 million, the company in a conference call Wednesday. The second tranche is subject to shareholder approval at a vote set for late August and the finalization of $300 million project financing for Caldag in the fourth quarter of 2010. Once completed, HDI, through its affiliate Constantia Resources, would hold a stake of around 30% in European Nickel. The Caldag project in western Turkey will be the world's first commercial nickel laterite heap-leach operation, producing 20,000 mt/year of nickel and 1,000 mt/year of cobalt in a mixed hydroxide product for a mine life of 14 years. The project will have a cash cost of around $6/lb, compared with $20-30/lb using conventional methods, the company said.