Gladstone Pacific Nickel Limited - ACN 104 261 887 - Interim results for the
six months ended 31 December 2009

TORONTO, March 29 /CNW/ - Gladstone Pacific Nickel Limited ("GPN" or the "Company") today announces its unaudited interim results for the six months ended 31 December 2009.

Financial Results

The Company reported interim revenue from ordinary activities of A$448,494 ((pnds stlg)248,869*) and expenses of A$4,167,963 ((pnds stlg)2,312,803*), approximately half of which was made up of tenement costs of A$917,174 ((pnds stlg)508,939) and a foreign exchange loss of A$1,122,319 ((pnds stlg)622,775*). The loss for the period (after income tax benefits) was A$3,385,700 ((pnds stlg)1,878,725*) representing a loss of A$.0477 per share ((pnds stlg).0265 per share*).

Exploration and Evaluation Expenditure for the period of A$507,868 ((pnds stlg)281,817*) was capitalised as Deferred Exploration and Evaluation costs. The expenditure was predominantly costs associated with initial expenditure on the Marlborough Heap Leach Project ("MHLP").

In line with its accounting policies and the impairment of assets at 30 June 2009, the Company has reviewed the carrying value of its Deferred Exploration and Evaluation costs. Based on the current stage of the Gladstone Nickel Project and the MHLP, and the expected recoverability of historical costs, the Company estimates the fair value of its Deferred Exploration and Evaluation costs as at 31 December 2009 to be unchanged from the June 2009 value of A$18,222,910 ((pnds stlg)10,111,893*).

The carrying value, prior to impairment, of the Deferred Exploration and Evaluation costs was A$18,730,778 ((pnds stlg)10,393,708*) and thus the asset has been impaired to the extent of the Exploration and Evaluation Expenditure for the period of A$507,868 ((pnds stlg)281,817*), and an impairment loss equal to that amount has been recognised in the Statement of Comprehensive Income.

The Company remains in a strong cash position with A$12,218,252 ((pnds stlg)6,779,908*) in cash made up of cash on hand of $10,558,354 ((pnds stlg)5,858,831*) and $1,659,898 ((pnds stlg)921,077*) as a refundable deposit on the purchase of land at Gladstone which is recorded in the accounts as a Non Current Receivable. Total shareholder equity as at 31 December 2009 was $30,222,895 ((pnds stlg)16,770,684*).

GPN continues to review all activities and associated operating costs, and has reduced staff costs and other expenditures over the period to reflect current global economic conditions.

Operational Highlights

The Company executed a Memorandum of Understanding ("MOU") for the development of a heap leach project at Marlborough with China Tianchen Engineering Corp ("TCC") (as announced on AIM on 16 October 2009). The MOU is subject to a number of conditions including the satisfactory conclusion of a feasibility study, entering into an engineering procurement and construction contract with TCC, and the identification of an equity partner and an offtake partner for the Project. The Company is continuing its discussions with TCC and will provide an update to investors in due course.

Nickel Markets

Average nickel prices have stabilised over the half year averaging US$8.06/lb to US$7.89 /lb in the third and fourth quarter of 2009 respectively. Current prices have been trending upwards and are above US$10.00/lb. The buoyancy of the nickel price is particularly encouraging given that nickel LME stock levels are coming off their historically high levels and are currently around 156,000 tonnes of nickel metal. The long term drivers of nickel consumption continue to be the fast growing economies of China and India and these remain relatively strong.

Post Balance Sheet Events

The Company's major shareholder has called a general meeting of members to be held on 9 April 2010 to consider the removal of two Directors, including myself, and the appointment of two new Directors (as announced on AIM on 9 February 2010). A Notice of Meeting was mailed to shareholders and announced on AIM on 2 March 2010.

Company Value

The Global Financial Crisis has resulted in postponement of our Gladstone Nickel Project, a considerably lower market capitalisation of the Company and significant write off's of our Deferred Exploration and Evaluation Costs. However, your Company has a significant asset base for which it should be proud:

    
    -   Cash of over A$12 million
    -   Our 100% owned Marlborough tenements have been valued at between
        A$18 to A$61 million by an independent expert. This is conservatively
        valued in our accounts at A$18.2 million.
    -   Potential for a Heap Leach Project at Marlborough with test work that
        indicates favourable extraction rates and recoveries of nickel and
        cobalt. This project can be an add-on to our larger Gladstone Nickel
        Project.
    -   The Gladstone Nickel Project which, as announced on 20th June 2008,
        can demonstrate a net present value of US$2.3 billion at similar
        commodity and exchange rates as those experienced today.
    -   Significant funds of A$50.3 million have been spent on advancement of
        the Gladstone Nickel Project with historical expenditure indicated
        below:

        ---------------------------------------------------------------------
        Description                                             A$ (millions)
        ---------------------------------------------------------------------
        Environmental studies                                            3.8
        ---------------------------------------------------------------------
        Metallurgical test work                                          4.8
        ---------------------------------------------------------------------
        Marlborough maintenance, drilling and purchases                 12.0
        ---------------------------------------------------------------------
        Engineering studies                                             19.5
        ---------------------------------------------------------------------
        Ouinne deposit and drilling                                     10.2
        ---------------------------------------------------------------------

        ---------------------------------------------------------------------
        Total                                                           50.3
        ---------------------------------------------------------------------

    -   Our 49% contractual interest in the Ouinne tenements in New Caledonia
        has been valued at between $20 to 46 million by an independent
        expert. This agreement is subject to financing of the Gladstone
        Nickel Project and the valuation range does not include an offset for
        the purchase of Ouinne which will be the issue of 15 million ordinary
        shares in the Company to our New Caledonia Partner, Societe Miniere
        Georges Montagnat.
    -   An agreement with the Queensland Government for the purchase of
        scarce industrial land at Gladstone which includes a cash deposit of
        $1.6 million (the deposit is currently is treated in the accounts as
        a non current receivable).
    -   Environmental Approvals for both stages 1 & 2 of the Gladstone Nickel
        Project.
    

There is, in my opinion, a significant value base of the Company which is currently not reflected in the market capitalisation of the business. I would like to continue to serve the interests of all shareholders but if I am elected off the Board on the 9th April 2010 I hope that the new Board can realise this inherent value, which I am sure can be achieved.

    
    James Henderson
    Chairman
    Gladstone Pacific Nickel Limited
    

* Exchange rate used A$1:(pnds stlg)0.5549

Extracts of the interim results for the six months ended 31 December 2009 appear below and a full version will be available on the Company's website www.gladstonepacific.com.au

    
    Consolidated Statement of Comprehensive Income
    for the six months ended 31 December 2009

                           Notes                   Consolidated

                                          Dec 09                      Dec 08
                                             ($A)                        ($A)
                                     ------------                ------------
    Interest Income                      448,494                     728,488
    Foreign Exchange Gain                      -                   2,347,566
                                     ------------                ------------
    TOTAL REVENUE                        448,494                   3,076,054
                                     ------------                ------------
    Evaluation Costs                     103,827                     472,230
    China Representative                       -                     140,133
    Foreign Exchange Loss              1,122,319                       3,502
    Directors' Fees/
     Remuneration                        466,282                     394,166
    Directors' Option
     Expense                                   -                      26,292
    Brokers' Option Expense               21,125                      21,125
    Professional Fees                     52,901                     965,493
    Travel and
     Accommodation                        69,446                     213,029
    Wages and On-costs                   334,083                     659,310
    Office Rental                        570,130                     234,142
    Public Relations and
     Ongoing Listing Fees                 75,268                     144,044
    IT and Communication                  62,495                     129,753
    Marketing                                  -                      23,675
    Depreciation                         133,591                      93,945
    Other                                 92,699                     229,803
    Tenement Expenses                    917,174                           -
    Impairment Loss                      146,623                  78,081,765
                                     ------------                ------------
    TOTAL EXPENSES                     4,167,963                  81,832,407
                                     ------------                ------------
    PROFIT/(LOSS) BEFORE
     INCOME TAX EXPENSE               (3,719,469)                (78,756,353)
                                     ------------                ------------
    Income Tax Benefit/
     (Expense)                           333,769                     804,964
                                     ------------                ------------
    PROFIT/(LOSS) AFTER
     INCOME TAX EXPENSE               (3,385,700)                (77,951,389)
                                     ------------                ------------
                                     ------------                ------------

    OTHER COMPREHENSIVE
     INCOME*
    Foreign Currency
     Translation                         472,774                     (54,036)
    Income Tax on Items of
    Other Comprehensive
     Income                                    -                           -
                                     ------------                ------------
    Other Comprehensive
     Income for the period
     (net of tax)                        472,774                     (54,036)
                                     ------------                ------------
    TOTAL COMPREHENSIVE
     INCOME                           (2,912,926)                (78,005,425)
                                     ------------                ------------
                                     ------------                ------------
    EARNINGS PER SHARE
    Basic Earnings
     (Loss) per Share
     (Cents per Share)         6           (4.77)                    (156.21)
    Basic Earnings
     (Loss) per Share
     (Cents per Share)         6           (4.77)                    (156.21)

    * Reported directly to Other Reserves In Equity.



    Consolidated Balance Sheet
    for the six months ended 31 December 2009

                           Notes                   Consolidated
                                          Dec 09       June 09        Dec 08
                                             ($A)          ($A)          ($A)
                                    -----------------------------------------

    CURRENT ASSETS
    Cash Assets                7      10,558,354    13,566,123    16,744,306
    Trade and Other
     Receivables                         153,692       194,815       172,146
    Other Current Assets                  14,612           898       192,046
                                    -----------------------------------------
    TOTAL CURRENT ASSETS              10,726,658    13,761,836    17,108,498
                                    -----------------------------------------
    NON CURRENT ASSETS
    Property Plant and
     Equipment                           937,440       852,596     1,110,382
    Investment in
     Subsidiaries                          1,712         1,712             -
    Deferred Evaluation
     and Exploration
     Costs                     4      18,222,910    18,222,910    46,084,800
    Trade and Other
     Receivables                       1,894,172     2,092,547    10,712,226
                                    -----------------------------------------
    TOTAL NON CURRENT ASSETS          21,056,234    21,169,765    57,907,408
                                    -----------------------------------------
    TOTAL ASSETS                      31,782,892    34,931,601    75,015,906
                                    -----------------------------------------
                                    -----------------------------------------

    CURRENT LIABILITIES
    Trade and Other Payables             637,435       811,489       718,521
    Provisions                            72,067       136,265       164,395
                                    -----------------------------------------
    TOTAL CURRENT LIABILITIES            709,502       947,754       882,916
                                    -----------------------------------------
    NON CURRENT LIABILITIES
    Trade and Other Payables             718,399       725,690       818,115
    Deferred Tax Liabilities                   -             -     1,624,287
    Provisions                           132,096       132,096       193,101
                                    -----------------------------------------
    TOTAL NON CURRENT
     LIABILITIES                         850,495       857,786     2,635,503
                                    -----------------------------------------
    TOTAL LIABILITIES                  1,559,997     1,805,540     3,518,419
                                    -----------------------------------------
                                    -----------------------------------------

                                    -----------------------------------------
    NET ASSETS                        30,222,895    33,126,061    71,497,487
                                    -----------------------------------------
                                    -----------------------------------------

    EQUITY
    Contributed Equity               127,456,754   127,456,754   108,035,294
    Reserves                          14,005,043    13,522,927    53,146,355
    Retained Earnings/
     (Accumulated Losses)           (111,259,902) (107,874,620)  (89,705,162)
                                    -----------------------------------------
    Parent Interest                   30,201,895    33,105,061    71,476,487
                                    -----------------------------------------
    Minority Interest                     21,000        21,000        21,000
                                    -----------------------------------------
    TOTAL EQUITY                      30,222,895    33,126,061    71,497,487
                                    -----------------------------------------
                                    -----------------------------------------



    Consolidated Cash Flow Statement
    For the six months ended 31 December 2009

                           Notes                   Consolidated
                                          Dec 09                      Dec 08
                                             ($A)                        ($A)
                                     ------------                ------------
    CASH FLOWS FROM
     OPERATING ACTIVITIES
    Payments to Suppliers
     and Employees                    (2,988,282)                 (4,909,638)
    Payments for
     Exploration and
     Evaluation                         (507,869)                 (2,697,346)
    Research and
     Development Rebate                  333,460                           -
    Interest Received                    311,771                     673,673
                                     ------------                ------------
    NET CASH FLOWS FROM
     (USED) IN OPERATING
     ACTIVITIES              7(a)     (2,850,920)                 (6,933,311)
                                     ------------                ------------

    CASH FLOWS FROM
     INVESTING ACTIVITIES
    Purchase of property
     plant and equipment                (205,440)                   (370,452)
    Refund of Bank Guarantee
     - Bond Security                     198,795                           -
    Advances to Ouinne SAS              (150,204)                 (2,035,006)
                                     ------------                ------------
    NET CASH FLOWS (USED)
     FROM INVESTING ACTIVITIES          (156,849)                 (2,405,458)
                                     ------------                ------------

    CASH FLOWS FROM
     FINANCING ACTIVITIES

                                     ------------                ------------
    NET CASH FLOWS FROM
     (USED) FINANCING
     ACTIVITIES                                -                           -
                                     ------------                ------------

    Net Increase/(Decrease)
     in Cash Held                     (3,007,769)                 (9,338,769)
    Net Foreign Exchange
     Differences                               -                   2,347,567
    Opening Cash Brought
     Forward                          13,566,123                  23,735,508
                                     ------------                ------------
    CLOSING CASH CARRIED
     FORWARD                          10,558,354                  16,744,306
                                     ------------                ------------
                                     ------------                ------------



    Statement of Changes in Equity
    for the six months ended 31 December 2009

    -------------------------------------------------------------------------
    Consolidated           Notes          Issued      Retained         Other
                                         capital      Earnings      Reserves
    -------------------------------------------------------------------------
    AS AT 1 JULY 2008                 84,259,743  (11,790,641)    36,012,711
                                    -----------------------------------------
                                    -----------------------------------------
    Profit /( Loss) for
     the Period                                -  (77,951,389)             -
    Other Comprehensive
     Income                                    -            -        (54,036)
                                    -----------------------------------------
    Total Comprehensive
     Income                                    -  (77,951,389)       (54,036)
    Ordinary Shares
     Issued During the
     Year                             23,775,551            -              -
    Movement in Minority
     Interest to date
     of purchase                               -        36,868    (2,443,893)
    Share Based Payment
     - Employees and
     Directors' Options                        -             -       178,022
    Share Based Payment
     - Director                                -             -     9,443,247
    Minority Interest
     acquired in MNPL                          -             -             -
    Other Equity                               -             -    10,010,314
                                    -----------------------------------------
    AS AT 31 DECEMBER 2008           108,035,294   (89,705,162)   53,146,365
                                    -----------------------------------------
                                    -----------------------------------------


    AS AT 1 JULY 2009                127,456,754  (107,874,202)   13,522,927
                                    -----------------------------------------
                                    -----------------------------------------
    Profit/( Loss) for
     the Period                                -    (3,385,700)            -
    Other Comprehensive
     Income                                    -             -       472,774
                                    -----------------------------------------
    Total Comprehensive
     Income                                    -    (3,385,700)      472,774
    Share Based Payment
     - Employees and
     Directors' Options                        -             -         9,342
                                    -----------------------------------------
    AS AT 31 DECEMBER 2009           127,456,754  (111,259,902)   14,005,043
                                    -----------------------------------------
                                    -----------------------------------------

    -----------------------------------------------------------
    Consolidated           Notes        Minority         Total
                                        Interest
    -----------------------------------------------------------
    AS AT 1 JULY 2008                 31,420,614   139,902,427
                                    ---------------------------
                                    ---------------------------
    Profit /( Loss) for
     the Period                                -   (77,951,389)
    Other Comprehensive
     Income                                    -       (54,036)
                                    ---------------------------
    Total Comprehensive
     Income                                    -   (78,005,425)
    Ordinary Shares
     Issued During the
     Year                                      -    23,775,551
    Movement in Minority
     Interest to date
     of purchase                       2,428,025        21,000
    Share Based Payment
     - Employees and
     Directors' Options                        -       178,022
    Share Based Payment
     - Director                                -     9,443,247
    Minority Interest
     acquired in MNPL                (33,827,639)  (33,827,639)
    Other Equity                               -    10,010,314
                                    ---------------------------
    AS AT 31 DECEMBER 2008                21,000    71,497,487
                                    ---------------------------
                                    ---------------------------


    AS AT 1 JULY 2009                     21,000    33,126,061
                                    ---------------------------
                                    ---------------------------
    Profit/( Loss) for
     the Period                                -    (3,385,700)
    Other Comprehensive
     Income                                    -       472,774
                                    ---------------------------
    Total Comprehensive
     Income                                    -    (2,912,926)
    Share Based Payment
     - Employees and
     Directors' Options                        -         9,342
                                    ---------------------------
    AS AT 31 DECEMBER 2009                21,000    30,222,895
                                    ---------------------------
                                    ---------------------------
    

SOURCE Gladstone Pacific Nickel Ltd.

For further information: For further information: Enquiries to: Julien McInally, Gladstone Pacific Nickel, Tel: +61 (0) 7 3231 7100; Gerry Beaney/Robert Beenstock, Grant Thornton Corporate Finance, Tel: +44 (0) 20 7383 5100; John Prior, Arbuthnot Securities, Tel: +44 (0) 20 7012 2000

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