Re Agreement
19 November 2004 - 6:00PM
UK Regulatory
RNS Number:4206F
Oriel Resources PLC
19 November 2004
AIM : ORI
PRESS RELEASE
19 November 2004
Oriel selects Bateman and ThyssenKrupp
to play a major role in the development of the Shevchenko Nickel Project
* Bateman has been appointed lead engineer to prepare the Definitive
Feasibility Study on the Schevchenko Nickel Project
* Bateman Project Finance will, together with Oriel, develop and execute a
project financing scheme and identify suitable international arranging and
underwriting banks and agencies with the support and assistance of
ThyssenKrupp.
* Bateman will manage a consortium of world class mineral resource
consultants including Polysius, part of the ThyssenKrupp Group, Wardell
Armstrong International and Mintek in executing the study.
* ThyssenKrupp and Oriel have signed Letter of Intent committing
ThyssenKrupp to take up to 100% of future ferronickel production.
Oriel Resources plc is pleased to announce that, having received proposals from
leading engineering consultants, they have selected and appointed Bateman Metals
Ltd, South Africa, to carry out the Shevchenko Nickel Project Definitive
Feasibility Study (DFS).
Bateman was part of the team led by Mintek of South Africa that prepared the
positive Preliminary Evaluation/Pre-feasibility study (PFS) on Shevchenko
submitted to Oriel in September 2004. Bateman will specifically be responsible
for all basic engineering and design for the smelting process, and
infrastructure such as buildings and utility supplies, including pricing
agreements and transport services. In addition, they will provide total capital
and operating costs estimates to within DFS limits of -5%+10%, economic
modelling, risk assessment, and management, project execution and scheduling
plans. Oriel has instructed Bateman that the DFS implementation plan should
maximise project construction on a lump sum turnkey (LSTK) basis. The DFS report
will be completed during the 3rd quarter 2005.
Oriel expects that, subject to a positive DFS, Bateman will undertake
construction of the Shevchenko project and provide key initial operating
personnel. The ThyssenKrupp Group, in addition to providing off-take guarantees,
will be involved in equipment supply.
Chief Operating Officer, Nick Clarke, commented, "the selection of Bateman was
based on a number of factors but most significantly their world renowned
technical expertise in ferroalloy-related processes and equipment, specifically
in the design and construction of DC Arc furnaces, and previous operating
experience within Kazakhstan."
In parallel with the DFS, Bateman Project Finance undertook to prepare a
financing scheme for the project in close co-operation with ThyssenKrupp
Metallurgie. It will include gaining approval from export credit agencies and
banks so that the necessary credit insurance cover and related debt service
facilities will be suitable to Oriel. Should the DFS conclude that the project
is viable and bankable, Bateman on a best endeavours basis will arrange the debt
underwriting for the project.
Bateman will be supported in the preparation of the DFS by a number of
sub-contractors. They include Mintek, South Africa, for process testwork and
flowsheet design and process modelling; Polysius, ThyssenKrupp Group, Germany,
for milling, drying and calcining testwork and capital and operating costs;
Wardell Armstrong International, UK, for ore resources/reserves, mine schedules,
hydrogeological and geotechnical studies and the preparation of an Environmental
Impact Assessment to international standards.
ThyssenKrupp Metallurgie and Oriel signed a letter of intent guaranteeing to
purchase up to 100% of future ferronickel production through an off-take
agreement. In addition, they will be working closely with Bateman Project
Finance and Oriel on preparation and implementation of Project Finance.
Oriel will also be working closely with local Kazakh companies in drilling and
ore sampling programmes, and will maintain close dialogue with the State
Institutions to ensure the requisite Government approvals are obtained. Oriel is
presently drilling on previously identified nickel ore occurrences within its
existing licence area, in order to classify all resources to the internationally
accepted JORC code, and will soon commence investigation of additional satellite
nickel ore occurrences. Oriel expects to delineate ore resources sufficient for
a mine life in excess of 25 years. The PFS was based on a 15 year mine life
representing some 58% of the original Soviet classified ore resource.
The Chairman and CEO, Dr Sergey V Kurzin said, "I am very pleased that we have
appointed the internationally renowned Bateman, with support from an
international group such as ThyssenKrupp, to act as our lead engineers and
partners on the next stage of the development of the Shevchenko project. Their
engineering track record and experience of working in Kazakhstan can only be
positive for our nickel project. The additional financial services provided by
Bateman Project Finance, with support from ThyssenKrupp, will run concurrently
with the preparation of the DFS so that we expect this time next year we will be
commencing construction on the Shevchenko site. "
For further information, or to download the entire press release, please visit
our website at www.orielresources.com or contact:
Dr. Sergey V Kurzin
svkurzin@orielresources.com
Stephen R Dattels
sdattels@orielresources.com
18 Upper Brook Street. * London W1K 7PU * England
Telephone +44 (0) 20 7514 0590 Facsimile +44 (0) 20 7514 0591
Additional Information:
Bateman Metals Limited and Bateman Project Finance operate under the Bateman
banner with their head office in Amsterdam.
Bateman has had extensive experience in providing Project Finance assistance and
is presently engaged in projects to a value of #550M within Kazakhstan on power
utilities and oil and gas pipelines and a further $40M on a ferrochrome project
in Russia. Previous experience includes a total of $600M on gas related projects
in Siberia, Turkmenistan and Uzbekistan.
Bateman has offices in Asia, Africa, the Americas, Australasia, Europe and
Almaty, Kazakhstan. Bateman serves the natural-resources industries
internationally, including mining, minerals and metals processing, ferroalloys,
mineral salts, fertilisers, chemicals, gas compression and crude-oil refining,
environmental protection, bulk-materials handling and water and effluent
treatment. The company has a market niche in developing regions with evolving
economies. An important component of satisfying these market needs and securing
new business is its ability to assist clients to raise project funding and
arrange commercial agreements. Flexible contract structuring manages commercial
risk.
Bateman relies on its networked communications system to draw upon its global
competencies to support its core project-management capability in the difficult
and remote terrains and minimal infrastructure usually associated with the
exploitation of wealth-creating products like precious metals, diamonds and gas.
The group remains abreast of state-of-the-art process technologies through its
contacts internationally. Additional information on Bateman can be found on
their website www.batemanbv.com.
ThyssenKrupp Metallurgie (TKMet) is a legally independent firm within the
ThyssenKrupp Group a production and services company with a total annual
turnover of approximately Euro36.1 billion and approximately 190,000
employees world-wide. TKMet purchase annually 50,000 tonnes of nickel for
consumption in the stainless industry. The main concerns of its global
activities are trading and distribution of ferroalloys and metals for the steel
and chemical industries. It takes a significant part in supplying these
industries and at the same time is a major partner of leading producers of raw
materials worldwide. Additional information can be found at its website
www.tkmet.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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