Update re Shevchenko project

RNS Number:4493L
Oriel Resources PLC
25 April 2005

25 April 2005





                    Oriel Resources plc ("Oriel Resources")

      Oriel Resources announces good progress on Shevchenko nickel project




*    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: [phone]



Dr Nick Clarke, Director of Mining, Oriel Resources plc
Tel: [phone]



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


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




                      This information is provided by RNS
            The company news service from the London Stock Exchange
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