Rusina solidifies DMCI partnership for Acoje project

Rusina solidifies DMCI partnership for Acoje project

West Australian

9th May 2007

The partnership between West Perth-based nickel company Rusina Mining NL and civil and mining contractor DMCI Holdings group has strengthened, with DMCI signing on to be Philippines partner in the company's Acoje Nickel/Chromite/Platinum project.

Under the agreement, DMCI will initially pay around $3 million for a 10 per cent interest in the project, with a first right of refusal on existing claim owners (CRAU resources) 10 per cent residual interest.

In addition DMCI and Rusina have agreed to form a 60 per cent (DMCI) 40 per cent (Rusina) Joint Venture Company which will comprise;

Mining Joint Ventures, - all properties of DMCI and Rusina (excluding Acoje and its surrounding EPA's) will be vended into a yet to be formed subsidiary. These will include Rusina's and DMCI's Mindanao Cu/Au projects.

A Ferro Nickel smelter, - subject to feasibility, to be constructed on Semirara Island, the site of DMCI's wholly owned coal mine. Under the agreement, Rusina will guarantee ore supply for 5 years. DMCI has also agreed to carry Rusina's equity contribution for the project construction on their balance sheet.

Subject to shareholder approval, DMCI will buy 3.6 million shares in Rusina for around $1.4 million, with an attached option at a strike price of 50 cents and a term of two years.

Rusina has also signed an agreement to fund a heap leach trial on the Acoje deposit with UK nickel group European Nickel Plc, subject to shareholder approval.

Under the agreement, European Nickel will spend around $2.4 million on 5.8 million shares with an attached option at a strike price of 21p [50c] and a term of 2 years to fund drilling exploration. The company will also have first right of refusal over any further Rusina share placements over the next three years.

The full text of a company announcement is pasted below

Rusina Mining Limited (ASX code: RML; AIM "RMLA") is pleased to announce that the Company has signed an agreement with AIM listed United Kingdom nickel group European Nickel PLC (AIM "ENK") to fund a heap leach trial and feasibility study on Rusina's Acoje deposit in the Philippines.

As a separate agreement, DMCI Holdings Inc (PSE : DMC) of the Philippines has agreed to cement its partnership with Rusina by becoming the Philippine partner in the Acoje Project, and formalising the arrangement for the investment into a Ferro Nickel plant on Semirara Island.

Discussions with these parties have been ongoing for some time. Pricing for these transactions have taken into account recent changes of the companies share price.

European Nickel.

Under the Agreement, European Nickel will, subject to Rusina shareholder approval, invest £1 million (5,882,352 shares at 17p [40c] with an attached option at a strike price of 21p [50c] and a term of 2 years). The funds will be used for drilling the nickel saprolite mineralisation at Acoje to JORC indicated resource status. European Nickel has also been granted the right of first refusal to underwrite any future share placement Rusina may contemplate over the next 3 years.

In addition European Nickel will fund a feasibility study for the heap leaching the nickel laterites on Rusina's Acoje property by spending up to US$10 million to earn 40 % of the nickel laterite property. European Nickel's farm in does not apply to the chromite or PGM / Ni sulphide portion of the property that will be separately explored and developed by Rusina.

European Nickel and Rusina have agreed to grant each other first right of refusal to acquire, explore, and develop all other Luzon Island based nickel laterite projects in the Philippines on a 50:50 cost basis cementing a long term relationship between the two companies.

The feasibility study is likely to take between two and three years and will include a trial heap leaching operation to determine whether tropical laterite ores from Acoje can be successfully heap leached. European Nickel is considered leaders in the Industry on Heap Leach technology having successfully demonstrated the process in their Caldag project in Turkey.

The agreement with European Nickel has secured the long term strategy on nickel for Rusina shareholders. Should Heap leach be feasible on Acoje laterites the low operating cost ($US 2.50/lb or $US 5500 / t Ni) with significantly lower capital requirements than HPAL ensures that heap leach operations will remain very profitable under all long term Nickel price projections currently being forecast.

The Chromite and Platinum Group Metal (PGM) mineralisation, that is generally confined to the eastern side of the Acoje property within the dunite zone, is not included in the agreement with European Nickel. The chromite and PGM's will be retained by Rusina (80% equity) and its Philippine partners (20% equity). Rusina has previously announced that it intends to drill the PGM mineralisation via cash flow from direct shipping nickel laterite ore.

DMCI Holdings Inc

DMCI and Rusina have agreed that DMCI will invest subject to shareholder approval, $US1.2 Million (3,658,537 shares at 40c AUD with an attached option at a strike price of 50c AUD and a term of 2 years)

DMCI and Rusina have entered an agreement for DMCI to formally become the Philippine partner in the entire Acoje Project. DMCI will initially pay $US 2.5 million for a 10% interest in Acoje, with a first right of refusal on existing claim owners (CRAU resources) 10% residual interest

In addition DMCI and Rusina have agreed to form a 60% (DMCI) 40% (Rusina) Joint Venture Company which will comprise of;Mining Joint Ventures, - all properties of DMCI and Rusina (excluding Acoje and its surrounding EPA's) will be vended into a yet to be formed subsidiary. These will include Rusina's and DMCI's Mindanao Cu/Au projects.A Ferro Nickel smelter, - subject to feasibility, to be constructed on Semirara Island, the site of DMCI's wholly owned coal mine. Under the agreement, Rusina will guarantee ore supply for 5 years. DMCI has also agreed to carry Rusina's equity contribution for the project construction on their balance sheet.This agreement with DMCI has secured the Medium term strategy on nickel for Rusina shareholders. Rusina and DMCI are in a unique position to quickly develop and bring into operation the above strategies to maximise shareholder value during the current commodity cycle.

Direct Shipping Update

The Company announced during its last quarterly report that a trial shipment of 50,000 (wet) tonnes has been approved on April 24 2007. The Company is also pleased to advise that the Environmental Clearance Certificate (ECC) for a 22.5 Ha starter pit was approved by the Environment Management Bureau on 8 May 2007. This permit now paves the way for ongoing direct shipping at Acoje subject to conditions laid out in the ECC.

DMCI have mobilised equipment to Acoje to begin civil works and are well advanced negotiating port facilities. The first shipment is still on schedule for the third quarter this year.

With the proceeds of these two strategic transactions with European Nickel and DMCI Holdings, combined with the imminent revenue from direct shipping nickel ores, and no requirement to fund the Ferro-nickel smelter, Rusina is in a strong position to drive the Company forward over the coming year.