“The Company has expended considerable time and energy on extensive research into discovering which technology is most suited to process Shevchenko’s ores. Shevchenko has the potential to become a world class nickel producer through our choice of process option which combines low operating cash costs and relatively low capital costs. Oriel has now taken the first solid steps to develop this resource and take advantage of the growing global stainless steel demand.”

Location and Infrastructure

Discovered in 1952, the deposit is located approximately 50km southwest of the nearby town of Zhitiqara and is extremely well served with main utilities such as power (500kV transmission lines), gas (pipeline linking Russia and Kazakhstan) and a link to the extensive regional and international rail network enabling Shevchenko’s ferronickel product to be transported directly to consumers throughout the CIS, Russia and China.

Mineral Resources & Reserves

Oriel has completed over 18,000m of core drilling on the Shevchenko project, of which 3,200m was confirmation drilling, aimed at verifying the existing Soviet data and the remaining 14,800m was classified as infill drilling. In total, some 7,051 exploratory holes were drilled at Shevchenko between 1957 to 1966, with an average depth of 41m for a total of 290,190m. From this, the calculation of the Soviet-era B+C₁ and C₂ reserves was based on 2,830 drill holes. Results of the 2005 feasibility study gave AusIMM JORC and NI43-101 compliant resource and reserve estimates as follows:

Measured & Indicated Resources (JORC Compliant)

Reserve

Mine Planning and Process Plant Design

Ore for the project will be supplied from open pit mining over 24 years. Cumulative ore feed to the plant at the time the mining stops is 55Mt at 0.94% Ni, with a remaining stockpile of 49Mt at an average of 0.62% Ni. The Company has chosen to proceed with continuous atmospheric tank leach technology, as it provided significantly better economic and technical performance compared to the other technologies. Oriel has a mining contract with the Government of the Republic of Kazakhstan which allows for full exploitation of the deposit, for the full 24 years mine life with the right of extension.

Outlook

The Company’s strong cash position and the commencement of ferrochrome production and subsequent sales are three factors, amongst others, which may be used to expedite the development of the Shevchenko nickel project.

Several alternative processing technologies emerged since the completion of Shevchenko’s feasibility study which offered Shevchenko potential benefits in terms of capital and operating cost savings. Oriel therefore contracted engineering consulting and technology supply companies to evaluate and assess all appropriate processing technologies.

Oriel believes the success of its expansion and formation of new partnerships reflects the confidence shown not only in Oriel’s projects and management, but also in Kazakhstan, with its political stability, emerging economy, vast base of natural resources and its strategic position to supply the stainless steel markets of Russia, China, Europe and Asia.

The project economics at a nickel price of $4.25/lb, pre-tax, are shown in the table below;

Using the nickel price of US$5.50 the project NVP (@8%) is US$864 million with an IRR of 21.57%.

The long term sustainable supply of nickel to the growing markets in Russia, China and Western Europe is the main objective of the Shevchenko nickel project and Oriel is at the stage where it is much closer to becoming a reality.