BRISBANE, QUEENSLAND, Jan. 30 /CNW/ - Gladstone Pacific Nickel Ltd
("GPNL" or "the Company") today announced the Company had executed a
Memorandum of Understanding ("MOU") for the development of its $3.65 billion
Gladstone Nickel Project (the "Project") with one of China's largest
The MOU with China Metallurgical Construction (Group) Corporation ("MCC")
signed by the Company's Chairman Professor Clive Palmer and MCC President Mr.
Under the agreement MCC will provide a commercial offer for construction
and financing of the Project, with the potential to establish an off-take
agreement. GPNL will be responsible for operations of the Project.
Highlights of the MOU
- MCC has confirmed it is prepared to provide a commercial offer for
the construction of the entire Project; and will send its technical
team to Australia to work with GPNL to evaluate the full construction
specification for the Project within 60 days. MCC has further
confirmed its intention to provide a turn-key Engineering,
Procurement and Construction ("EPC") offer for the construction of
- MCC will establish a special team to meet with the Company to discuss
and finalise the turn-key EPC contract specifications. The Company
believes the MCC offer will be commercially competitive and provide
guarantees for the construction price and EPC process. The parties
will work together to enable MCC to prepare a commercial proposal and
offer for the turn-key EPC construction of the entire Project by
21st July 2008. The target date for construction to commence in
Australia is 31st October 2008 with a target to complete turn-key
construction by 30th April 2011.
- MCC has also offered to finance or assist in arranging finance
sufficient to fund the Project from Chinese banks. GPNL has requested
and MCC has agreed to consider coordination of the sale and off take
of nickel in China.
- Upon execution of the turn-key EPC construction contract for the
Project, MCC intends to invest equity (in an amount to be agreed) in
the shares of GPNL.
- MCC has an exclusive right to negotiate and finalise financing and
construction agreements until September 2008.
Today's announcement is in line with the Board's strategy of targeting
and dealing with China and the growth opportunities it offers. The Company
appointed a full-time General Manger to Beijing in December 2007. (See
announcement dated 20th December 2007)
GPNL Managing Director Mr. John Downie said, "I am particularly pleased
with the strong commitment MCC has given to the Project following the recent
announcement of the financial results of the Project feasibility study."
The financial results of the feasibility study for Stage 1 of the Project
showed US$625 million of profit after tax and interest in the first year of
full production and a net present value of US$4,322 million. (See announcement
dated 18th January 2008)
"This agreement is another major step forward for our world-class nickel
project in Gladstone", Mr Downie said.
Newly appointed GPNL Chairman Professor Clive Palmer said, "The new Board
composition has a renewed vigor to develop the Gladstone Nickel Project and a
commitment to ensure GPNL achieves its full potential as a world-leading
company providing appropriate shareholder returns."
"The GPNL team has achieved an outstanding result in obtaining the
proposed co-operation with MCC", Professor Palmer said.
"MCC is currently constructing a large resource project in Australia and
has a presence in our country which will be invaluable in achieving an
excellent result for MCC, GPNL and shareholders", he said.
As provided for in the Share Subscription Agreement announced on
11 December 2007, a related party of Chairman Professor Palmer, Egidia Pty
Ltd, will earn a 33% interest in the ordinary shares of GPNL subsidiary
Marlborough Nickel Pty Ltd as a result of the execution of this MOU, though
this will be diluted to 25% on the securing of financing arrangements for the
Transocean Group Pty Ltd (Transocean), a related party of Director
Mr Henderson, is entitled to a success fee of $1 million payable by the issue
of shares in the Company at an issue price of (pnds stlg)1.20 following the
signing of the MOU. These new ordinary shares will be issued and notification
of the issue made in due course.
Gladstone Pacific Nickel Ltd
Gladstone Pacific Nickel Limited is a publicly-listed, Australian mining
development company, which is establishing a US$3.65 billion long-life, nickel
and cobalt refinery at the Gladstone State Development Area in Central
GPNL is planning to build the refinery at the deepwater Port of
Gladstone, treating 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.
Gladstone Pacific Nickel Ltd is listed on AIM in London and the Toronto
Stock Exchange, Canada - AIM & TSX code: GPN.
China Metallurgical Construction (Group) Corporation
China Metallurgical Group Corporation (MCC) is China's leading
multidisciplinary multinational company, well known for its significant
experience and strength in scientific research, industrial engineering
practice and international trading. MCC is engaged in Engineering, Procurement
and Construction activities (EPC business), natural resources exploration,
papermaking, equipment fabrication, real estate development and the provision
of related services.
MCC is a major driving force behind the growth of China's steel industry,
and a major contractor on a number of key projects both in China and the Asia
Pacific region. The company is a leading investor, licensed by the Chinese
government, in natural resources exploration. MCC has to date invested as much
as US$1 billion in mining resources abroad, including production facilities
and interests in mineral deposits. MCC is one of the largest equipment
manufacturers in China and has total assets of RMB83 billion and over 50,000
technical and managerial employees.
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: John Downie, Chief Executive Officer, Gladstone
Pacific Nickel, Tel: +61 (0) 7 3211 8899; Fiona Owen, Grant Thornton Corporate
Finance, Tel: +44 207 383 5100; Simon Rothschild, Bankside Consultants, Tel:
+44 207 367 8888; Web: www.gladstonepacific.com.au; Email: