ORI Oriel Res.

RNS Number:9912Q
Oriel Resources PLC
08 September 2005

8 September 2005



        Oriel Resources plc ("Oriel Resources" "Oriel" or the "Company")


     Oriel commits to development of its Voskhod Chrome project ("Voskhod")


Steffen, Robertson & Kirsten (UK) Ltd (SRK) has completed a preliminary
assessment study ("PAS") on Oriel's 100% owned Voskhod Chrome deposit located in
the Khromtau District of the Aktobe Region of western Kazakhstan.  On the basis
of the PAS, Oriel has decided to proceed with the development of the project
simultaneously with the completion of a definitive feasibility study.  Oriel
purchased Voskhod in February 2005 for the equivalent of US$15.0 million in cash
and the allotment of 9,181,352 shares, at the time valuing Voskhod at US$25.0
million.


The key findings of the SRK study are as follows:


*   Project Net Present Value (NPV) of US$329 million (pre tax) with an 
    Internal Rate of Return (IRR) 62%, using a 10% discount rate and a chromite 
    ore (high grade lumpy and fines concentrate) sale price of US$170 per ton.

*   Pre-production construction capital expenditure under US$50 million to 
    produce 700,000t per annum of chromite ore from an underground mining
    and beneficiation operation.

*   Cash operating costs of US$25 per ton of ore mined equating to a
    cash cost of US$34 per ton of chromite product sold.

*   Annual gross revenue from sales of US$85 million.

*   Heinz Pariser report gives chromite ore (lumpy and fines concentrate) sale 
    prices ranging from US$142 to US$200 per ton to markets in Russia and 
    China at the current time depending on the grade and penalty constituents.


SRK undertook an audit of the Soviet compiled Voskhod resource estimate in
August 2004 and was sufficiently confident of the data set to place them into
the AusIMM JORC (1999) classified Indicated and Inferred categories.


 SRK'S Audited AusIMM JORC (1999) Statement, August 2004


    Resource Estimate    Indicated Mineral Resource    Inferred Mineral Resource
     Tonnes, million                18.7                         0.59
     Grade, %Cr-2O3                 46.2                        14.56

This resource statement complies with National Instrument (NI) 43-101 standards
for reporting of resources and was prepared by Dr Alwyn Annels of SRK. The
economic estimate has been based entirely on the Indicated resources and was
prepared by Mr M Beare of SRK in July 2005. Dr Annels and M Beare are both
designated as qualified persons under the terms of NI 43-101.

Executive Chairman, Dr Sergey V Kurzin said; "The results of the PAS study give
the Board of Directors significant confidence in the Voskhod asset and
accordingly we have decided to fast track the development of the mine by
approving the design and construction of an exploration decline to access the
chrome orebody. In summary, the selling price is higher, the operating costs are
lower and as a result the project economics are better than our preliminary
estimates at the time of purchasing this high return asset.  Financing of this
initial phase of the project will be provided entirely from Oriel's existing
cash reserves which presently stand at US$44.5 million, and we anticipate no
further equity dilution as a result of taking this particular asset to cashflow,
expected by mid 2007."

SRK was assisted in the production of the PAS by Heinz Pariser, Alloy Metals &
Steel Market Research ("Heinz Pariser"), which provided the chrome ore marketing
and pricing data.  Mintek, South Africa, was used for the process options and
preliminary plant design. The SRK study authors were Dr A Annels and M Beare,
both Qualified Persons under the terms of NI 43-101.

Voskhod lies within a layered ultramafic complex, referred to as the
Kempirsayskiy Massif, together with up to 80 other deposits discovered since
1936. This massif is 82 km long in a NNE direction and covers an area of 920
km2. The host rocks to the deposit have been subjected to hydrothermal
alteration and now consist of serpentinites and serpentinized dunites.

The Voskhod deposit consists of one large lens of massive to disseminated
chromite with up to 9 smaller pods or footwall protrusions. It is a totally "
blind" deposit, lying as it does at depths of 98 to 440 m with a northeasterly
dip of 28o. Two grades of ore are recognized, "Rich" and "Subordinate" which are
separated on the basis of a grade threshold of 45% Cr2O3   classified under the
Russian resources / reserve system as C1 plus C2 resources, as approved by the
State Committee of Resources (SCR). In January 2003 the SCR determined this
deposit to contain a total of 18.7 Mt at a grade of 46.2% Cr2O3. In August 2004
SRK conducted an audit of the SCR estimate and were sufficiently confident of
the data presented to place these Russian C1 plus C2 resources into the "
Indicated Category" as defined by the AusIMM, JORC (1999) classification system.

In April 2005 Oriel initiated a comprehensive diamond drilling campaign on the
deposit, monitored in its entirety by SRK personnel, to confirm previous assay
data and to provide geotechnical and hydrological information for developing the
mine design. As at 20 August 2005 a total of 34 holes have been drilled
totalling 12,334 metres. Ore intersections have confirmed the tenure of the
deposit and assaying of the ore intersections is progressing.

SRK notes that Voskhod is situated in a mining district generally well served by
infrastructure. Voskhod is adjacent to the Donskoy GOK mining complex and the
aptly named town of Khromtau.  SRK considers that there are no significant
obstacles in the provision of infrastructure for a mining operation.  Adequate
power is expected to be supplied from a state-owned substation 15 km away via a
dedicated power line.  Process water for the mine operations will be sourced
from the continual pumping of surplus water from underground.

The mine will be fully mechanised and SRK has proposed a ramp access to the
orebody with mining by a sub level caving system for ore production of 700,000
tons per annum giving a projected mine life of 25 years. Mined grades delivered
to the beneficiation plant have been estimated at 43.7% Cr2O3 after mine
recovery and dilution factors have been applied. Mintek has provided process
options to produce a number of saleable chromite ore products. The plant would
comprise crushing, milling, dense media separation and gravity concentration
units with sufficient flexibility to allow high grade ore to be crushed and
screened to form a metallurgical 'lumpy' product should selective ore mining
prove feasible.

It is expected that the proposed plant will be able to produce two products,
namely a metallurgical 'lumpy' product grading approximately 49% Cr2O3 and a
metallurgical fines concentrate grading approximately 55% Cr2O3. Estimated total
annual sales are expected to be in the order of 511,000 tons split approximately
as to 322,000 tons for the 'lumpy' material and 189,000 tons for the fines
concentrate.

Marketing data supplied by Heinz Pariser has indicated that the sale price of
chrome ore products from Kazakhstan during the first quarter 2005 have ranged
from US$142 to US$200 per ton. Oriel is in discussion with a number of
interested consumers of the Voskhod products both in China and Russia and will
be pursuing these markets aggressively over the coming months.

Pre-production capital costs have been estimated at US$48 million prior to
initial revenues from chromite production. This estimate does not include
financing, administration and taxation costs. Cash operating costs over the life
of the mine have been estimated at US$24.8 per ton of ore mined which equates to
a cash cost of US$34 per ton of chromite product sold, based on an assumed yield
of 73% saleable products from the run of mine ore. The project NPV, pre
financing charges and government taxes, at a chromite sale price of US$170 per
ton and a 10% discount rate is given as $329 million with an IRR of 62%. The
range of NPV's and IRR's at chromite sale prices of US$142 and US$200 per ton
are US$212 million at 46% and $454 million at 78% respectively and indicate
extremely robust project economics.

Our advisors, Endeavour Financial, have provided Oriel with early confidence
that it is likely that project debt funding of up to US$40 million could be
available to finance the development of Voskhod.  The level of Oriel's cash
reserves and the amount of potential debt financing places Oriel in a position
where it does not envisage any requirement for further equity raising for the
development of Voskhod.

The SRK report has provided Oriel with sufficient confidence to proceed to the
next stage of project development, notwithstanding a Definitive Feasibility
Study (DFS) is yet to be completed. SRK, as lead engineer, is preparing a
detailed proposal to undertake the DFS for completion by 2nd quarter 2006 in
conjunction with Mintek on process testwork and design and an internationally
recognised process engineering company.  As part of this fast track process
Oriel has decided to commence the design and construction of the access ramp to
the Voskhod orebody and has commissioned SRK to prepare detailed designs for the
ramp and associated development works for submission to the relevant Kazakh
authorities for approval to start engineering works during 2nd quarter 2006.

Oriel confidently expects production of chromite ore from the Voskhod deposit to
commence mid 2007.


Shevchenko

Further to earlier announcements Oriel now expects that the completion of the
Definitive Feasibility Study ("DFS") will be completed in early 2006.  The
timetable for the completion of the DFS has been pushed out by delays in
receiving final tenders and re-engineering work on some of the more complex
production and infrastructure models.

This revised timetable has not impacted on progress in other areas and Oriel
with its advisor Endeavour Financial, has short listed a number of multilateral
and commercial international banks.  Indicative term sheets for their
participation in funding the debt portion of the Shevchenko project are
currently under review.

In addition, Oriel continues to receive excellent support from both the regional
and the Federal Government in Kazakhstan for both Voskhod and Shevchenko and
this is expected to continue, as the projects develop, into material assets for
the company.

                        _______________________________________________________


Dr Alwyn Annels, PhD, CEng, FIMMM is a Principal Mining Geologist at SRK (UK)
Ltd, and was co-author of the Preliminary Assessment Study. He is a qualified
person in accordance with definitions set out in National Instrument 43-101 and
he has consented to this announcement and reference to his report herein.

Mr Mike Beare, BEng, CEng, MIMMM, Senior Mining Engineer at SRK (UK( Ltd), and
was co-author of the Preliminary Assessment Study. He is a qualified person in
accordance with the definitions set out in National Instrument 43-101 and he has
consented to this announcement and reference to his report herein.


ENDS


For further information, please contact:

Dr Sergey V Kurzin, Executive Chairman, Oriel Resources plc
Tel: +44 (0) 20 7514 0590

Dr Nic A Barcza, Managing Director, Oriel Resources plc
Tel: +44 (0) 20 7514 0590

Nick Clarke, Director of Mining, Oriel Resources plc
Tel: +44 (0) 20 7514 0590

Jonathon Brill/Billy Clegg, Financial Dynamics
Tel: + 44 (0) 20 7831 3113

Vanguard Shareholder Solutions
Tel: 1-800 866-788-9288


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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