Gladstone Pacific Nickel Ltd - (ACN 104 261 887) - Gladstone Pacific Nickel Ltd pursues financing and construction agreements



    GLADSTONE, QUEENSLAND, Dec. 11 /CNW/ - Gladstone Pacific Nickel Ltd
("GPN" or the "Company") is pleased to announce that it has entered into
arrangements with entities associated with Professor Clive Palmer (newly
appointed Chairman of the Company) to progress and secure funding and turn-key
construction arrangements for the Gladstone Nickel Project ("the Project").

    Financing and construction agreements

    GPN and its subsidiary, Marlborough Nickel Pty Ltd ("MNPL"), have entered
into Share Subscription Agreements with Egidia Pty Ltd and Dasines Pty Ltd
(the "Palmer Entities"), under which the Palmer entities may earn interests in
the Project by securing pre-commitments and subsequent binding legal
agreements to fund and construct the Project.
    The First Share Subscription Agreement provides Egidia Pty Ltd with a
right earn to 25% interest in MNPL if it secures a memorandum of understanding
to finance or arranges finance sufficient to fund the Project and if it
secures a memorandum of understanding with a Chinese party that provides for
the Chinese party to make a bid for construction of all or a majority of the
Project.
    The Second Share Subscription Agreement provides Dasines Pty Ltd a right
to earn a further 24.99% interest in MNPL if it secures a legally binding loan
security agreement to finance or underwrite the arrangement of finance for
100% of the Project, or a lesser amount agreed by MNPL, and a legally binding
turn-key construction contract to substantially construct the Project as the
Company requires. The memoranda of understanding, as outlined in the First
Share Subscription Agreement, must be achieved by 30 June 2008, otherwise the
arrangements under both Share Subscription Agreements will cease.
    If Egidia Pty Ltd achieves its milestones MNPL has agreed not to enter
into alternative equity or debt funding arrangements for up to three years
from the 8th December 2007 and has given certain undertakings to avoid
material adverse events in relation to its assets during that period. As part
of the Agreement, the Company must also make available to the Palmer Entities
any assets of the Company (that may be held outside of MNPL) required to
complete the Project.
    In addition, a Palmer entity will hold an option, exercisable upon the
Palmer Entities earning a 49.99% interest in MNPL, providing the right to
acquire one additional ordinary share in MNPL, which on exercise will bring
their shareholding in MNPL to 50%.
    The Company's Chief Executive John Downie commented:

    "Professor Palmer has a track record in successfully funding significant
capital projects with Chinese entities and his experience will assist the
Company in fast-tracking its development plans. It is planned that the
culmination of these arrangements would result in a fully funded project with
certainty of completion provided by the legally binding turn-key construction
contract, with GPN shareholders retaining 50% of MNPL."
    Transocean Securities Pty Ltd ("Transocean") acted as the Corporate
Advisors to Gladstone and introduced Mr Palmer to the company. Transocean is
an Australian based investment banking group and is a company of which Mr J.
G. Henderson a Non Executive Director of Gladstone is the Principal...
    Transocean may earn up to A$3 million for corporate advisory fees related
to these agreements. Upon Egidia Pty Ltd earning a 25% interest in MNPL,
Transocean will receive A$1 million payable by the Company in Ordinary Shares
at an issue price of (pnds stlg)1.20. Upon the Palmer Entities earning a 49.9%
interest in MNPL, a further A$2 million will be payable by the Company to
Transocean in the form of Ordinary Shares in the Company at an issue price of
(pnds stlg)1.20.

    Note to Editors:

    Gladstone Pacific Nickel Limited (GPNL) is an Australian mining
development company presently undertaking an Integrated Definitive Feasibility
Study (IDFS) for the Gladstone Nickel Project (GNP). The Company's vision is
to build a major long-life nickel cobalt refinery at the deepwater Port of
Gladstone, in Central Queensland, Australia, treating abundant high grade
nickel laterite ores from New Caledonia and other south-west Pacific islands,
underpinned by beneficiated ores from its own Marlborough deposits. The
Project has the potential to be one of the largest of its type in the world
producing some 126,000 tpa nickel (8 -10% of global nickel demand) and 10,400
tpa of cobalt metal from its first two stages.

    Disclaimer:

    This news release includes certain statements that may be deemed
"forward-looking statements". All statements in this news release, other than
statements of historical facts, that address future exploration drilling,
exploration activities and events or developments that the Company expects,
are forward looking statements. Although the Company believes the expectations
expressed in such forward-looking statements are based on reasonable
assumptions, such statements are not guarantees of future performance and
actual results or developments may differ materially from those in
forward-looking statements. Factors that could cause actual results to differ
materially from those in forward-looking statements include metal prices,
exploration success, continued availability of capital and financing, and
general economic, market or business conditions.




For further information:

For further information: Professor Clive F Palmer, Chairman - Gladstone
Pacific Nickel Limited: Tel: + 61 409 044 489, www.gladstonepacific.com.au;
Peter Ward - Insinger de Beaufort: Tel: +44 207 190 7000; Simon Rothschild,
Keith Irons - Bankside Consultants: Tel: +44 207 367 8888

Organization Profile

Gladstone Pacific Nickel Ltd.

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