Çaldag Off-take Termination Agreement and Bridging Facility Agreement Signed

8 July 2009 - London: European Nickel PLC ("European Nickel" or the "Company") (AIM, PLUS: ENK) is pleased to announce it has signed an agreement (the "Termination Agreement") with BHP Billiton pursuant to which BHP Billiton has agreed to release the Company from all of its obligations under the off-take agreement announced in June 2006 (the "BHP Off-take") in relation to the Company's Çaldag project in Turkey. As previously announced and in accordance with the heads of agreement (the "Off-take Heads") signed with Jiangxi Rare Earth and Rare Metals Tungsten Group Company Limited ("JXTC") in December 2008, following signature of the Termination Agreement European Nickel intends to enter into a new off-take agreement with JXTC. The Company has also signed a US$4 million Facility Agreement with Endeavour Financial Corporation ("Endeavour") to provide bridge loan finance pending completion of the proposed US$20 million equity investment by JXTC in Çaldag. Termination Agreement Pursuant to the Termination Agreement, BHP Billiton has agreed to terminate its entire off-take contract with European Nickel with immediate effect. In accordance with the Off-take Heads which fixed the terms of the off-take, the directors of the Company anticipate that the negotiations with JXTC will lead to a new off-take agreement whereby JXTC will agree to take 100% of Çaldag's mixed hydroxide product. The successful conclusion of negotiations with BHP Billiton is an important step towards finalising the acquisition by JXTC of a 20% equity interest in Çaldag and the progression of the debt finance facility being arranged by China Tianchen Engineering Company. Originally, only 50% of Çaldag's off-take was going to be sold to JXTC but this has been increased to 100% by mutual agreement to facilitate the 100% debt financing of the project from a Chinese bank. The terms of the termination of the BHP Off-take are a payment of US$10 million on first drawdown of the project finance facility and a further 24 monthly payments of US$1 million, starting once nickel output has reached 50% of the Çaldag plant's design specification of 20,400 tonnes per annum of contained nickel. The maximum funding cost of the Çaldag project has not increased as a result of the payments due pursuant to the Termination Agreement. The initial payment of US$10 million to BHP Billiton is more than offset by the reduced current market prices of consumables at the Çaldag project, particularly sulphuric acid where the price has dropped very significantly since the estimate used in the last announced project evaluation (see press release dated 19 February 2009). The monthly payments start after maximum drawdown and are treated as operating costs. The payment terms agreed in the Off-take Heads are confidential but the overall impact of the Termination Agreement is beneficial for the Çaldag project and will assist the Company to complete the financing of the project. JXTC can now apply for approval from the Jiangxi Provincial Government to invest US$20 million to acquire a 20% equity interest in the Çaldag project. Facility Agreement The Company has signed a bridge loan facility agreement (the "Facility Agreement") with Endeavour for a US$4 million secured loan facility (the "Loan") to provide bridge finance to the Company for working capital until completion of the US$20 million equity investment by JXTC in Çaldag. The Loan is conditional on the completion of certain conditions precedent. Under the terms of the Facility Agreement, the Company has granted Endeavour a three year option to purchase 800,000 ordinary shares in the Company ("Shares") at a price of 6.644 pence per share. The coupon on the Loan is 10% and the Loan is repayable on 20 October 2009, unless it is extended at mutual consent. A further three year option to purchase 3,200,000 Shares will be granted to Endeavour on drawdown of the Loan. In addition, the Company has appointed Endeavour as financial adviser for the US$350 million project financing of the Çaldag project. Simon Purkiss, Managing Director of European Nickel said, "Finalising terms with BHP Billiton for the release of the off-take contract is an important milestone as it now allows JXTC to move ahead with the approval process for their investment in Çaldag and for the next stage in the application for the US$350 million of project financing to commence. JXTC have indicated the Jiangxi Provincial Government approval process can now move forward and I am confident that we can progress the conclusion of the US$20m share purchase and that the debt finance will be completed by the end of the year. With the current timing, we have taken the opportunity to arrange a loan facility to provide additional resources for the coming period. We would like to thank BHP Billiton for their support in the development of European Nickel to date." For more information, please visit www.enickel.co.uk or contact: Simon Purkiss or Andrew Lindsay, European Nickel Tel: +44 20 7290 3130 Mike Jones or Andrew Chubb, Canaccord Adams Tel: +44 20 7050 6500 Alex Buck, BuckBias Tel: +44 7932 740 452 About European Nickel European Nickel (AIM, PLUS: ENK) is an emerging mid-tier nickel laterite producer focused on growth. With over 1 million tonnes of nickel resources and assets in Turkey, the Philippines and Albania, European Nickel is targeting 50,000 tonnes of annual nickel production within five years. The Çaldag project in Turkey is the Company's flagship asset with near-term production and will be the world's first commercial scale nickel laterite heap leach operation. Note to Editors: Endeavour Financial Corporation (TSX: EDV) www.endeavourfinancial.com Endeavour is an independent merchant banking company focused on the global natural resources sector. The Corporation offers advisory services in project, corporate and debt capital markets; equity financings; mergers and acquisitions; and strategic business development. Endeavour also provides equity and bridge loans in support of clients, transactions, and other market opportunities. Accessing its global industry networks, Endeavour creates and launches new growth companies as both an advisor and investor. ---END OF MESSAGE--- This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.