 Mintek has successfully completed the demonstration-scale smelting campaign on calcined ore and achieved the target of 90% recovery
 Bateman has confirmed that the design parameters for the plant can be based on the testwork results as planned
 Polysius has successfully completed testwork to design the milling and drying circuit for the process used to calcine ore prior to the smelting stage.
 Project metallurgist for Shevchenko appointed
 Voskhod chrome project diamond drilling programme commenced.

Shevchenko nickel project

A number of significant positive milestones have recently been reached which suggest the Shevchenko project is on course to complete the definitive feasibility study (“DFS”) by the middle of the third quarter 2005. These include:

Definitive feasibility study

An interim project review meeting held at Bateman confirmed that the Definitive Feasibility Study would be completed during the third quarter of 2005. Subject to a positive outcome, Bateman will undertake final design and manage construction of the plant on a lump-sum turnkey basis.

Demonstration-scale smelting campaign

During March, Mintek completed a successful demonstration-scale smelting campaign on nickel ores from three of the deposits at Shevchenko. A 450 ton sample sourced from the Shevchenko, Blizhny and Tarasov deposits was shipped to Mintek for bulk sampling and preparation for the campaigns at Mintek and at Polysius in Germany. The recent smelting campaign, followed the successful small-scale testwork carried out at Mintek in June 2004, which provided the initial design data for the project pre-feasibility study as well as the proposed design for the DFS.

Representatives including financial institutions in the UK, Canada, Germany and Kazakhstan travelled to South Africa in March 2005, to attend the demonstration, which was the largest ferronickel campaign to be carried out to date using Mintek’s twin-electrode DC arc furnace process.

Approximately 188 t of the three calcined lateritic ores was smelted in the DC arc furnace pilot plant at power levels of up to 1.5 MW, to produce 11.5t of ferronickel alloy. The preliminary results from the smelting campaign indicate that the Shevchenko ore with a head grade of 1.4%

Ni (dry basis) will produce an alloy grade of about 22% Ni at a nickel recovery of 89%. Higher recoveries of 91% have been demonstrated from lower head grades, namely Blizhny at 1.1%Ni and Tarasov at 0.87%. A nickel recovery target of 90% was defined as one of the main objectives of the campaign. The final report on the Mintek smelting campaign will be available in mid-May. Bateman has indicated that based on these preliminary smelting test results they are confident to proceed with the furnace design as planned.

Milling and calcining testwork

The Polysius testwork, on a blend of the same ores as above, needed to finalise design for the Aerofall ® mill and drying circuit was also successfully completed and the report was issued in March. The results confirmed that Shevchenko ores can be readily milled to the particle size requirements for the Polcal ® calciner. The testwork on the calcining stage was completed last year.

The preliminary feasibility study, completed in the third quarter of 2004, was based on a project producing an annual 140,000 t of ferronickel, with a nickel content of about 31,000 t contained nickel. The DFS is being undertaken on the same basis and assuming financial closure by the end of 2005 and construction commencing during the second quarter of 2006, production could start by early 2008.

Voskhod

Diamond drilling at Oriel’s Voskhod chrome project has commenced and will provide data on geotechnical conditions and samples for beneficiation testwork. An initial drill programme of some 5,000m is planned. SRK (UK) Ltd has been appointed to undertake initial studies on the project and a scoping study is expected to be completed in June 2005.

 

Oriel will be investigating potential early production routes for Voskhod. Construction on Voskhod could begin in 2006, which may include the construction of a decline ramp. First production could follow in 2007 with trucking of ore to a beneficiation plant on site. Oriel is basing its scoping study assuming sales of high grade chromite ore and fines concentrate in China and Russia. Oriel has been approached by a number of industry parties in Russia and China interested in opening discussions on potential chromite ore off-take agreements and other possible collaborations.

Markets

Industry analysts, Brook Hunt, forecast that average nickel demand growth may be between 2.9% and 3.4% on a Western World and Global basis, respectively, over the period 2004-2015. This increase is expected to be lead by China, where dramatic growth has seen China’s share of demand grow from a global market share of less than 4% in 1999, to an expected11.4% by 2015. The principal drive for this is stainless steel production, predicted to rise by 52%. Nickel and chrome are prime raw materials used in stainless steel production, and with the expected production timings for Shevchenko (2008) and Voskhod (2007), Oriel is ideally positioned to tap into this growing market.

New appointment

Oriel is pleased to announce that it has recently appointed Adriaan van de Merwe to its technical team as a Shevchenko project metallurgist. Adriaan has extensive experience in ferrous and non-ferrous melting, smelting, continuous casting, granulation and atomising operations. Adriaan has worked for Chambeshi Metals in Zambia, which has been successfully operating a Ni-Co-Cu DC-Arc furnace similar to that envisaged for the Shevchenko Project. He has sound experience in process design, specification and commissioning of pyrometallurgical process equipment and is a valuable addition to the technical expertise of the company.

Ends

For further information please contact:

Dr Sergey V Kurzin, Executive Chairman, Oriel Resources plc
Tel: +44 (0) 20 7514 0590

Dr Nick Clarke, Director of Mining, Oriel Resources plc
Tel: +44 (0) 20 7514 0590

Jonathon Brill/Billy Clegg, Financial Dynamics
Direct: + 44 (0) 20 7831 3113

Paul Lathigee, Vanguard Shareholder Solutions
Direct: + (1) 604 608 0824