European Nickel PLC: Interim financial report for the year and six months ended 30 September 2010

European Nickel PLC


Interim financial report
for the year and six months ended 30 September 2010



Highlights:

* US$5m placing to strategic partner, Hunter Dickinson group
* John McManus appointed non-executive director
* Acoje Definitive Feasibility Study fast tracked
* Çaldag Project put on "Care and Maintenance"
_________

This half year information is given to the Australian Stock Exchange (ASX) under
listing rule 4.2A. The information should be read in conjunction with the most
recent annual financial report.

Chairman\'s statement


Dear Shareholder

I am pleased to be able to report to you on the progress made by your company
over the past six months. It has been a challenging and busy time for all of us
with the completion of the merger and integration with Rusina Mining and the
continued progress towards the development of our various projects.

Philippines

As a consequence of the merger ENK now has a 92% economic interest in the Acoje
project in the Philippines which is fully permitted and ready to develop upon
conclusion of a definitive feasibility study ("DFS") which commenced in 2009.
 The merger has been accounted for as a business combination using the
acquisition method.
Work on the Acoje feasibility study was slowed down considerably over the past
year while management concentrated heavily on furthering the Çaldag project.
Despite this our very capable metallurgists continued to make significant
progress at the Acoje Test Centre on improvements to our core precipitation
model with a view to lowering operating costs and increasing the payability of
the end mixed hydroxide product ("MHP").

As outlined in our announcement made on 10 December, all of your Company\'s
efforts and resources are now being focused on the Acoje project, with the aim
of fast tracking the DFS to completion as quickly as possible. The base case
scenario for Acoje is an operation producing 24,500 tonnes of nickel MHP a year
over an initial 10 year life of mine. There is significant potential to extend
this by converting the JORC Inferred Acoje and Zambales Chromite nickel laterite
deposits to JORC Indicated status.  Indeed we believe Acoje has the potential to
be a bigger operation with a longer mine life than Çaldag.

Based on the results of the Pre-Feasibility Study, Acoje offers attractive
project returns with a project NPV of US$586m, at a discount rate of 10%, and a
project IRR of 37.2% using a long term nickel price of US$7 per pound and a
cobalt price of US$10 per pound (currently US$10.65 and US$16.30 respectively)

Turkey

Significant progress has been made in furthering the development of the Çaldag
project. During May we announced the signing of term sheets with two Initial
Mandated Lead Arrangers ("IMLA\'s"), Société Générale and UniCredit Bank for a
$300m debt facility. Progress on concluding this facility has been excellent
with the majority of work required to enable the IMLA\'s to seek final credit
approval concluded as of the date of this report.

In addition to the debt portion of the project financing ENK announced a
strategic partnership with the Hunter Dickinson (HDI) group in July, wherein HDI
agreed to subscribe for US$50m of equity in the Company at a price of 44p per
share subject to completion of the proposed project financing. HDI is very
supportive of the Company\'s strategic direction as demonstrated by the
significant premium to the share price at the time of announcement. In addition
HD subscribed for US$5m of equity in the Company during July, also at a premium
to the prevailing share price.

Work at the operational level has also increased significantly. An owner\'s team
has been appointed and finalisation of outstanding issues in the environmental,
geotechnical and engineering areas has occurred and tender contracts were
sought.

Against this backdrop of positive activity it was disappointing to have the
Company\'s forestry permit cancelled during May by a regional court hearing a
case on a related matter. The Company\'s advice was that this was a legal
technical issue and would be rectified by the passing of a new mining law. This
occurred during June and was subsequently ratified by the President of Turkey.
We reapplied for our permits and submitted them during August. Unfortunately the
forestry permits have not yet been reissued despite the Company being advised
that it has completed all things necessary for this to occur and repeated
assurances from Government officials that the permits would be forthcoming. The
forestry permits are on the critical path for the development of Çaldag and
without them very little further progress is possible.

Chairman\'s statement (continued)

Consequently, and as announced on 10 December, the Board decided to put the
Çaldag project on a \'Care & Maintenance\' basis until receipt of the forestry
permits, at which time the project will be re-evaluated in light of the progress
made at Acoje. A number of critical aspects of the project construction schedule
have been completed and the Company is very well placed to continue with the
development of Çaldag as soon as the required permits are issued.

Corporate

As a consequence of the merger with Rusina a number of changes were made at
Board level. This included the appointment of Robert Gregory and Mark Hanlon as
Managing Director and Finance Director respectively, the appointment of Simon
Purkiss as Executive Deputy Chairman, the resignation of Andrew Lindsay as
Finance Director and Sir David Logan and Euan Worthington as non-executive
directors and the appointment of Neil Herbert as a non-executive director. I
would like to thank Andrew, Sir David and Euan for their contribution to the
Company and welcome Rob, Mark and Neil to the board.
Subsequent to the US$5m placing to HD a further non-executive director, John
McManus, was appointed to the board in late August.

Financial Results

Our financial results are in line with expectations for a company that has yet
to commence operations. The major movements in the balance sheet reflect the
fair value adjustments of the merger with Rusina as well as a write down in the
carrying value of our investments in Toledo Mining Corporation and the Berong
project on the island of Palawan in the Philippines.

Outlook

All efforts will now be focused on the Acoje project in the Philippines to which
we are transferring the Company\'s resources in order to move the DFS ahead as
quickly as possible. The heap leach facility at Acoje is fully constructed and
all equipment is on site for the enhanced downstream process and the trial heap
leach will be started during the first quarter of 2011.  The necessary permits
to construct a full scale operation have been received. Consultation processes
with the local stakeholders have been continuing during this period and ENK
enjoys a good level of support for the project. Drilling to increase the size of
the resource through conversion of Inferred resources to Measured and Indicated
status will also commence in the first half of 2011 and is expected to further
enhance the project returns as the life of mine is potentially extended. The
Acoje project has the attributes to be a considerably larger and more profitable
project than Caldag. In the circumstances, ENK is very happy to have made the
switch in priorities, enabling the Company to focus resources better and bring
forward the excellent Acoje project.

Once again I want to convey my sincere appreciation of the efforts of all our
employees and the support of our shareholders.


David Whitehead
Chairman
14 December 2010


The Directors
European Nickel PLC
3rd Floor
49 Albemarle Street
London
W1S 4JR

Our ref: SJB/CGT



13 December 2010

Dear Sirs

AUDITOR\'S INDEPENDENCE DECLARATION

As lead auditor for the review of European Nickel PLC for the year ended 30
September 2010, I declare to the best of my knowledge and belief, there have
been:

(a) No contraventions of the auditor independence requirements of the
Corporations Act 2001 in relation to the review; and
(b) No contravention of any applicable code of professional conduct in relation
to the review.

This declaration is in respect of European Nickel PLC and the entities it
controlled during the half year.

Yours faithfully



Stuart Barnsdall
Partner
PKF (UK) LLP


Tel  020 7065 0000  |  Fax  020 7065 0650
www.pkf.co.uk
PKF (UK) LLP  |  Farringdon Place  |  20 Farringdon Road  |  London  |  EC1M
3AP  |  DX 479 London/Chancery Lane

PKF (UK) LLP is a limited liability partnership registered in England and Wales
with registered number OC310487.

A list of members\' names is open to inspection at Farringdon Place, 20
Farringdon Road, London EC1M 3AP, the principal place of business and registered
office. PKF (UK) LLP is authorised and regulated by the Financial Services
Authority for investment business activities. PKF (UK) LLP is a member firm of
the PKF International Limited network of legally independent firms and does not
accept any responsibility or liability for the actions or inactions on the part
of any other individual member firm or firms.




INDEPENDENT AUDITORS\' REVIEW REPORT TO THE MEMBERS OF EUROPEAN NICKEL PLC


We have reviewed the accompanying interim financial information of European
Nickel PLC, which comprises the condensed consolidated income statement, the
condensed consolidated statement of other comprehensive income, the condensed
consolidated statement of changes in equity, the condensed consolidated cash
flow statement for the year ended 30 September 2010, the condensed consolidated
balance sheet as at 30 September 2010, a summary of significant accounting
policies, other selected explanatory notes and the directors\' declaration.  The
consolidated entity comprises the company and the entities it controlled at 30
September 2010 or from time to time during the year ended on that date. We have
read the other information contained in the interim report and considered
whether it contains any apparent misstatements or material inconsistencies with
the information in the condensed set of financial statements.

This report is made solely to the company in accordance with the terms of our
engagement.  Our review has been undertaken so that we might state to the
consolidated entity\'s members those matters we are required to state to it in
this report and for no other purpose.  To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the consolidated
entity\'s members for our review work, for this report, or for the conclusions we
have reached.

Directors\' responsibility for the interim financial information

The directors of the company are responsible for the preparation and fair
presentation of the interim financial information in accordance with the AIM
Rules of the London Stock Exchange, International Accounting Standards
(including the International Accounting Interpretations) and the Australian
Corporations Act 2001.  This responsibility includes designing, implementing and
maintaining internal controls relevant to the preparation and fair presentation
of the interim financial information that is free from material misstatement,
whether due to fraud or error; selecting and applying appropriate accounting
policies; and making accounting estimates that are reasonable in the
circumstances.

Auditors\' responsibility

Our responsibility is to express a conclusion on the interim financial
information based on our review.  We conducted our review in accordance with
International Standard on Review Engagements ISRE 2410 "Review of Interim
Financial Information Performed by the Independent Auditor of the Entity", in
order to state whether, on the basis of the procedures described, anything has
come to our attention that causes us to believe that the financial report is not
presented fairly, in all material respects, in accordance with the Corporations
Act 2001 including: giving a true and fair view of the company\'s position as at
30 September 2010 and its performance for the year then ended and International
Accounting Standard IAS 34 "Interim Financial Reporting" and the Australian
Corporations Regulations 2001.  As the auditor of European Nickel PLC, ISRE
2410 requires that we comply with the ethical requirements relevant to the audit
of the annual financial report.

A review of the interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures.  A review is substantially less
in scope than an audit conducted in accordance with International Auditing
Standards (UK and Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters that might be
identified in an audit.  Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of
the Corporations Act 2001.

Conclusion

Based on our review, which is not an audit, nothing has come to our attention
that causes us to believe that the interim financial information of European
Nickel PLC:

(a) does not present fairly, in all material respects, the consolidated
entities\' financial position as at 30 September 2010 and of its financial
performance and cash flows for the year ended on that date; and

(b) does not comply with the AIM Rules of the London Stock Exchange,
International Accounting Standard IAS 34 "Interim Financial Reporting" and
Corporations Regulations 2001.


Emphasis of matter - Caldag forestry permit, availability of project finance and
going concern

In forming our opinion, which is not qualified, we have considered the adequacy
of the disclosures made in note 1 to the interim financial statements.

The Group will require further funding for working capital purposes over the
next twelve months and the current funding position as explained in note 1
indicates the existence of a material uncertainty which may cast significant
doubt on Group\'s ability to continue as a going concern. The Group\'s interim
financial statements do not include the adjustments that would result if the
Group were unable to continue as a going concern.

Note 1 to the interim financial statements also describes the delay in the
issuance of the necessary forestry permit for the Caldag project and the
requirement for the company to raise project debt for construction of the
project. Completion of the funding arrangements has currently been delayed
pending the issuance of the forestry permit. We understand that the directors
consider that they are taking the necessary steps for the permit to be issued
and they also believe that adequate funding will be arranged for construction of
the Caldag project. However, there can be no certainty in respect of these
matters and if the Company is unsuccessful in either regard in an appropriate
timescale this could lead to impairment of the carrying value of the Group\'s
Caldag related assets.

PKF (UK) LLP
London
United Kingdom

13 December 2010


Directors\' declaration

In the opinion of the directors of European Nickel PLC ("the Company"):

1. the financial statements and notes set out on pages 7 to 20, are in
accordance with the
Corporations Act 2001 including:

(a) giving a true and fair view of the consolidated entities financial position
as at 30 September 2010 and of its  performance for the half-year ended on that
date; and

(b) complying with International Accounting Standard 34 Interim Financial
Reporting and the Corporations Regulations 2001; and

2. there are reasonable grounds to believe that the Company will be able to pay
its debts as
and when they become due and payable.

Signed in accordance with a resolution of the directors made pursuant to
s.303(5) of the
Corporations Act 2001.




Robert Gregory
Managing Director
13 December 2010


Consolidated income statement
for the year and six months ended 30 September 2010

    Six months to Six months to Year ended Year ended
30 September 30 September 30 September 30 September

  Note 2010 2009 2010 2009

    Unaudited Unaudited Reviewed Audited

    US$000 US$000 US$000 US$000



Revenue   - - - -



Cost of sales   - - - -



Gross profit   - - - -



Administrative   (7,624) (5,521) (11,428) (9,215)
expenses

Exceptional 4 32,745 - 32,745 -
gain

Impairment loss 5 (30,518) - (30,518) -

Other operating   (252) 162 (1,722) (2,585)
costs

Other operating   - 97 - 123
income



Operating loss   (5,649) (5,262) (10,923) (11,677)



Other interest   111 2,055 13 82
receivable and
similar income

Interest   - (314) (1,227) (1,288)
payable and
similar charges

Share of   352 (205) 66 (1,486)
results of
associates and
joint ventures



Loss before tax   (5,186) (3,726) (12,071) (14,369)

Tax   - - - -



Loss for the   (5,186) (3,726) (12,071) (14,369)
period



Attributable
to:

Equity   (5,106) (3,726) (11,991) (14,369)
shareholders of
the parent
company

Non-controlling   (80) - (80) -
interest

                                                 _______

    (5,186) (3,726) (12,071) (14,369)



Loss per share 6 ($0.032) ($0.035) ($0.076) ($0.135)
(basic and
diluted)





Consolidated statement of comprehensive income
for the year and six months ended 30 September 2010

Six months to Six months to Year ended Year ended
  30 September 30 September 30 September 30 September

  2010 2009 2010 2009

  Unaudited Unaudited Reviewed Audited

  US$000 US$000 US$000 US$000



Loss for the
period (5,186) (3,726) (12,071) (14,369)

Other
comprehensive
income/(expense):

Exchange
differences
arising on
translation
of foreign
operations 5,096 191 5,118 197

Gain/(loss) on
available for
sale investments - 552 33 173

Loss on disposal
of investment in
associate (660) (5,755) (7,719) (5,755)



Total
comprehensive
expense for the
period (750) (8,738) (13,394) (19,754)



Total
comprehensive
expense
attributable to:

Equity
shareholders of
the parent
company (1,900) (8,738) (14,544) (19,754)

Non-controlling
interests 1,150 - 1,150 -

  _______              ______        _______ _______

  (750) (8,738) (13,394) (19,754)





Consolidated statement of financial position
As at 30 September 2010

Year ended Year ended
 30 September  30 September

      2010 2009

      Reviewed Audited

    Note US$000 US$000

Non-current assets

Goodwill     1,096 1,096

Intangible assets   4 91,030 2,641

Property, plant and equipment   7 80,843 78,553

Investments accounted for   5 853 50,169
using the equity method

Available for sale investments   4, 5 4,572 865



      178,394 133,324



Current assets

Inventories     94 102

Trade and other receivables   8 17,471 16,549

Cash and cash equivalents     7,556 1,530



      25,121 18,181



Total assets     203,515 151,505



Current liabilities

Interest-bearing loans     - (3,922)

Trade and other payables     (5,397) (3,073)



      (5,397) (6,995)

                                   _

Net current assets     198,118 144,510

                                  _

Non-current liabilities

Provisions     (2,400) (2,400)



Total liabilities     (7,797) (9,395)



Net assets     195,718 142,110




Consolidated statement of financial position (continued)
As at 30 September 2010


Equity

Called up share capital   9 15,604 8,480

Share premium account   9 226,401 207,496

Merger reserve   9 18,641 776

Translation reserve     3,533 (355)

Fair value reserve     - (1,278)

Accumulated losses     (90,868) (73,009)

       ______ _______

Total equity attributable to equity holders     173,311 142,110
of the parent

Non-controlling interest   4 22,407 -



Total equity     195,718 142,110




Consolidated cash flow statement
for the year and six months ended 30 September 2010

  Six months to Six months to Year ended Year ended
 30 September 30 September  30 September 30 September

  2010 2009 2010 2009

  Unaudited Unaudited Reviewed Audited

  US$000 US$000 US$000 US$000



Operating loss (5,649) (5,262) (10,923) (11,677)

Depreciation and 367 474 737 877
amortisation

Bad debt provision - - 30

Impairment loss - - 30,518

Exceptional gain - - (32,745)

Effect of exchange - 3,495 - 1,455
rate fluctuations

Share-based payment 520 589 1,267 1,025
expense

Operating cash (4,759) (704) (11,117) (8,320)
outflow before
movements in working
capital



(Increase)/decrease 2 - 8 (1)
in stocks

Decrease/(increase) (1,685) (2,507) (922) 489
in trade and other
receivables

Increase/(decrease) 1,858 1,535 2,324 621
in trade and other
payables



Net cash used in (6,785) (1,676) (9,707) (7,211)
operating activities



Interest and similar 9 - 13 82
income received

Interest and similar (67) (118) (290) (180)
charges paid

Purchase of (2,468) (3,550) (2,677) (3,937)
property, plant and
equipment

Purchase of (9) (2) (9) (13)
intangible fixed
assets

Purchase of 1,542 - - -
investments in joint
ventures reversed on
business combination

Purchase of - (4,181) - (4,861)
investments in joint
ventures

Repayments - 59 - (221)
from/(loans to)
associates

Proceeds from sale 73 - 1,031 -
of shares in
associate



Net cash used in (920) (7,792) (1,932) (9,130)
investing activities



Issue of ordinary 14,390 5,909 22,302 5,909
share capital

Interest-bearing - 4,000 (4,000) 4,000
loan



Net cash from 14,390 9,909 18,302 9,909
financing activities



Net 6,685 441 6,663 (6,432)
increase/(decrease)
in cash and cash
equivalents

Cash and cash 1,209 1,330 1,530 8,791
equivalents at
beginning of period

Effect of foreign (338) (241) (637) (829)
currency rate
changes



Cash and cash 7,556 1,530 7,556 1,530
equivalents at the
end of the period





Consolidated statement of changes in equity
for the period ended 30 September 2010

Called
up Share Fair Non-
share premium Merger Translation value Accumulated Sub- controlling Total
  capital account reserve reserve reserve losses total Interest equity

   US$000 US$000 US$000 US$000 US$000 US$000 US$000 US$000 US$000
-----------------------------------------------------------------------------------------------------
As at 30
September
2008 7,216 202,851 776 (552) (1,451) (54,268) 154,572 - 154,572
-----------------------------------------------------------------------------------------------------
Loss for the
period - - - - - (10,643) (10,643) - (10,643)

Exchange
differences - - - 6 - - 6 - 6

Change in the
fair value of
available for
sale
financial
assets - - - - (379) - (379) - (379)
-----------------------------------------------------------------------------------------------------
Total
comprehensive
income for
the period - - - 6 (379) (10,643) (11,017) - (11,017)
-----------------------------------------------------------------------------------------------------
Issue of
shares - - - - - - - - -

Expenses
incurred
issuing
shares - - - - - - - - -

Share-based
payments - - - - - 436 436 - 436
-----------------------------------------------------------------------------------------------------
As at 31
March 2009 7,216 202,851 776 (546) (1,830) (64,475) 143,992 - 143,992
-----------------------------------------------------------------------------------------------------
Loss for the
period -  -  -  -  -  (3,726) (3,726) - (3,726)

Exchange
differences  -  -  -  191  - - 191 - 191

Loss on
deemed
disposal  -  -  -  - - (5,755) (5,755) - (5,755)

Change in the
fair value of
available for
sale
financial
assets  -  -  -  -  552  - 552 - 552
-----------------------------------------------------------------------------------------------------
Total
comprehensive
income for
the period - - - 191 552 (9,481) (8,738) - (8,738)
-----------------------------------------------------------------------------------------------------
Issue of
shares  1,264  5,026  - -  -  - 6,290 - 6,290

Expenses
incurred
issuing
shares - (381) - - - - (381) - (381)

Share-based
payments  -  -  -  -  - 947 947 - 947
-----------------------------------------------------------------------------------------------------
As at 30
September
2009  8,480  207,496  776  (355)  (1,278) (73,009) 142,110 - 142,110
-----------------------------------------------------------------------------------------------------







-----------------------------------------------------------------------------------------------------
Loss for the
period -  -  -  -  -  (6,885) (6,885) - (6,885)

Exchange
differences  -  -  -  22  - - 22 - 22

Loss on
disposal  -  -  -  - - (7,059) (7,059) - (7,059)

Change in the
fair value of
available for
sale
financial 33 - 33
assets  -  -  -  -  33  -
-----------------------------------------------------------------------------------------------------
Total
comprehensive
income for
the period - - - 22 33 (13,944) (13,889) - (13,889)
-----------------------------------------------------------------------------------------------------
Issue of
shares  1,340  7,182  - -  -  - 8,522 - 8,522

Expenses
incurred
issuing
shares - (450) - - - - (450) - (450)

Share-based
payments  -  -  -  -  -  1,283 1,283 - 1,283
-----------------------------------------------------------------------------------------------------
As at 31
March 2010  9,820  214,228  776  (333)  (1,245) (85,670) 137,576 - 137,576
-----------------------------------------------------------------------------------------------------
Loss for the
period -  -  -  -  - (5,106) (5,106) (80) (5,186)

Exchange
differences  -  -  - 3,866  - - 3,866 1,230 5,096

Loss on
disposal  -  -  -  - - (660) (660) - (660)
-----------------------------------------------------------------------------------------------------
Total
comprehensive
income for
the period - - - 3,866 - (5,766) (1,900) 1,150 (750)
-----------------------------------------------------------------------------------------------------
Non-
controlling
interest
arising on
business
combination
(see note 4) - - - - - - - 21,257 21,257

Recycled on
disposal of
available for
sale
investment  -  -  -  -  1,245 - 1,245 - 1,245

Issue of
shares 5,784 12,344  17,865 -  - - 35,993 - 35,993

Expenses
incurred
issuing
shares - (171) - - - - (171) - (171)

Share-based
payments  -  -  -  -  - 568 568 - 568
-----------------------------------------------------------------------------------------------------
As at 30
September
2010 15,604 226,401 18,641 3,533 - (90,868) 173,311 22,407 195,718
-----------------------------------------------------------------------------------------------------


Notes

1. Basis of preparation

These consolidated interim financial statements have been prepared in accordance
with IAS 34 Interim Financial Statements and the AIM Rules and the Australian
Corporations Act 2001 and on the basis of the accounting policies used in
preparing the Group\'s financial statements for the period ending 30 September
2009 which were prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union (EU).

The Company announced a change to its Accounting Reference Date on 15 November
2010 extending it to 31 March.  Consequently, the results for the six months
ended 30 September 2010 are unaudited and the results for the year ended 30
September 2010 are reviewed.  Neither therefore constitute statutory accounts
within the meaning of Section 435 of the Companies Act 2006.  The statutory
accounts for the year ended 30 September 2009 have been delivered to the
Registrar of Companies. The audit report was unqualified and did not include any
statement under Sections 498 (2) or (3) of the Companies Act 2006 and included
an emphasis of matter relating to going concern, the availability of project
finance and the assumptions adopted for the Berong impairment review.

The interim financial statements were approved by a duly appointed and
authorised committee of the Board of Directors on 13 December 2010.  They are
unaudited but the financial information as at 30 September 2010 and for the year
then ended have been reviewed by the auditor as set out in their report.

Going concern, Caldag forestry permit and availability of project finance

In common with many companies in the exploration and development stages, the
Company raises its finance for exploration and development programmes in
discrete tranches. The directors have prepared cash flows projections for the
period to December 2011 which indicate that existing funds and readily
realisable assets will not be sufficient to fund the group for the foreseeable
future. The Board have held discussions with a number of finance providers in
respect of raising additional debt or equity finance and believes that these
funds will be forthcoming in the necessary timescale. It has therefore concluded
that it is appropriate to prepare these accounts on a going concern basis.
However, as with all such fundraisings, there can be no certainty in this
regard.

The directors have been in discussions to raise project debt required to fund
the construction of the Caldag project. These funding arrangements cannot be
completed until the forestry permit required for construction of the project is
obtained. Whilst the directors are confident that they are taking all the
necessary steps to ensure that the permit will be issued and the funding will be
available, there can be no certainty that this will be the case.  Were the
permit and the funding not to become available in an appropriate timescale the
directors would need to consider alternative strategies and an impairment review
would be required in respect of the capitalised expenditure on the Caldag
project.

2. The directors do not propose an interim dividend.

3. Segment information

The Group has adopted IFRS 8 Operating Segments with effect from 1 October
2009.  IFRS 8 requires operating segments to be identified on the basis of
internal reports on the performance of the managerial units of the Group to the
chief operating decision maker, in this case the Managing Director and the Board
of Directors.  The Group identifies these units primarily according to the
country of operations, Turkey and the Philippines with the remainder, including
investments, being unallocated.

Six months to 30
September 2010  Turkey  Philippines  Unallocated  Total

     USD\'000  USD\'000  USD\'000  USD\'000
--------------------------------------------------------------------------------

Revenue      - -        -           -
--------------------------------------------------------------------------------
Results


Segment result   (2,140) 30,554 (33,711) (5,297)


--------------------------------------------------------------------------------
Investment
income             9 9

Foreign
exchange gain       876 876

Finance costs       (774) (774)


Income taxes
--------------------------------------------------------------------------------
Loss for the
period         (5,186)




Segment assets       97,382 90,105  16,028       203,515



Six months to 30
September 2009  Turkey  Philippines  Unallocated  Total

     USD\'000  USD\'000  USD\'000  USD\'000
--------------------------------------------------------------------------------

Revenue      -       -        -                    -
--------------------------------------------------------------------------------
Results

Segment result   (1,373) (536) (2,102) (4,011)


--------------------------------------------------------------------------------
Investment
income       (83) (83)

Foreign
exchange gain         678 678

Finance costs       (314) (314)

Income tax
credit             4     4
--------------------------------------------------------------------------------
Loss for the
period         (3,726)




Segment assets       95,984 50,169  5,352  151,505



For the year ended
30 September 2010  Turkey  Philippines  Unallocated  Total

     USD\'000  USD\'000  USD\'000  USD\'000
--------------------------------------------------------------------------------


Revenue     -         -         -                  -
--------------------------------------------------------------------------------
Results


Segment result   (4,498)  30,380 (36,739) (10,857)


--------------------------------------------------------------------------------
Investment
income             13               13

Foreign
exchange loss       (120) (120)

Finance costs       (1,107) (1,107)


Income taxes               -                  -
--------------------------------------------------------------------------------
Loss for the
period         (12,071)

Assets and
liabilities


Segment assets      97,382  90,105  16,028      203,515



For the year ended
30 September 2009  Turkey  Philippines  Unallocated  Total

     USD\'000  USD\'000  USD\'000  USD\'000
--------------------------------------------------------------------------------


Revenue     -         -         -                  -
--------------------------------------------------------------------------------
Results


Segment result   (6,912)  (1,886) (2,911) (11,709)


--------------------------------------------------------------------------------
Investment
income             82               82

Foreign
exchange loss       (2,283) (2,283)

Finance costs       (459) (459)


Income taxes               -                  -
--------------------------------------------------------------------------------
Loss for the
period         (14,369)




Segment assets      95,984 50,169  5,352      151,505


4. Business combinations

Rusina Mining NL

Rusina Mining NL ("Rusina"), a publicly owned Australian company that had been
listed on AIM and the Australian Stock Exchange.  Prior to 16 June 2010 the
Group owned shares in Rusina representing 2.9% of the outstanding shares of
Rusina.  Effective 16 June 2010 the transaction became binding and the Group
acquired 97.1% of the outstanding shares and share options of Rusina with
European Nickel PLC shares being issued on 24 June 2010 giving the Group a 100%
interest in Rusina.

Rusina is a Philippines focused mineral exploration and development company.
 Its major asset is the Acoje Nickel Laterite Project.  It also has a portfolio
of exploration properties that are prospective for base metals, precious metals
and chromite.  The acquisition of Rusina will allow the Group improved access to
development capital; a strengthened management team; the creation of a nickel
development company of significant scale; geographical and project
diversification and a platform for growth.

The purchase consideration was US$21.25m, being the fair value of the shares
issued to the Rusina shareholders and option holders on 16 June 2010 the date
the merger became binding and control was obtained.  The premium of the shares
issued was credited to the merger reserve.


Details of the net assets acquired are as follows:

  Fair values

  US$000



Cash and cash equivalents 1,271

Intangible assets 84,000

Property, plant and equipment 459

VAT reclaimable 436

Trade and other receivables 831

Trade and other payables (847)

Borrowings (1,427)

                _______

Net identifiable assets 84,723



Previously held interests (18,683)

Non-controlling interests (21,257)

Purchase consideration (21,246)

  _______

Gain arising on bargain purchase (23,537)

  _______


The fair value of the assets was assessed by an independent expert using a
discounted cashflow model and both the indicated and inferred resources of the
project.  Non-controlling interests in the acquired entities were measured at
their proportionate share of the acquiree\'s net assets.  Key assumptions for the
fair valuation of the assets and inputs used were:

* The expected value (EV) per tonne of contained nickel at Acoje and ZCMC was
assessed using appropriate comparator companies.  As ZCMC is at an earlier
stage of development than Acoje a different set of comparator companies was
used.
* EV per tonne of contained nickel
* Acoje $131.50
* ZCMC $50.50


The Group recognised a gain of US$472k as a result of measuring at fair value
its 2.9% equity interest in Rusina held prior to the acquisition date.  The gain
is included in exceptional gains in the income statement.

The Group recognised a gain of US$5.23m as a result of measuring at fair value
its 20% equity interest in Fil-Euro Asian Nickel Corporation ("FEANC") held
prior to the acquisition date.  The gain is included in exceptional gains in the
income statement and FEANC is now consolidated in the Group accounts.

The Group recognised a gain of US$4.78m as a result of measuring at fair value
its 40% equity interest in Zambales Chromite Mining Corporation ("ZCMC") held
prior to the acquisition date.  The gain is included in exceptional gains in the
income statement and ZCMC is now consolidated in the Group accounts.

The Group recognised a gain arising on bargain purchase of US$23.54m being the
difference between (i) the acquisition date fair value of the consideration
transferred, (ii) the non-controlling interest, and (iii) the acquisition date
fair value of the previously held equity interest in the Rusina group entities;
and the fair value of the acquisition date amounts of the net identifiable
assets acquired and liabilities assumed.  The gain is included in exceptional
gains in the income statement.

The Directors believe the bargain purchase resulted from the increased
volatility in the share price at the time the transaction completed.  The gain
arising would not have been recognised if, as anticipated at the time, the share
price had reached a level whereby the valuation cap under the Scheme of
Arrangement had become operational.

Directly attributable acquisition costs of US$1,330,000 were incurred in the
transaction.  US$1,212,000 of these are reported within administration expenses
in the current period as part of the operating result of the unallocated
operating segment.  US$118,000 are legal expenses which have been debited to the
share premium account.

The acquired businesses contributed nil revenue and a net loss of US$1,717,000
for the period from 16 June 2010 to 30 September 2010.  If the acquisition had
occurred on 1 October 2009 Group revenue would have been nil and the net loss
would have increased by US$9,245,000.

5. Impairment losses

A loss of US$7,719,000 was recognised in accumulated losses for the loss on
disposal following the sale of shares held by the Group for the Toledo Mining
Corporation ("TMC") during the period.  Significant influence existed following
the disposal as Simon Purkiss is a director of TMC and it was deemed appropriate
to continue to equity account the Group\'s interest.  However, a more recent
change of strategy by TMC has led the Directors to conclude that significant
influence is no longer exerted.  A loss of US$8,928,000 was therefore recognised
as an impairment loss in the income statement and reported in the unallocated
operating segment for the Group\'s 7.08% interest in Toledo Mining Corporation.
 The carrying value of the Group\'s interest in TMC is now accounted for as an
available for sale investment and valued at the closing share price on 30
September 2010.  The closing share price on 30 September 2010 was 23.5p valuing
the Group\'s interest at US$1,092,000.

A loss of US$21,590,000 was recognised as an impairment loss in the income
statement and reported in the unallocated operating segment for the Group\'s
18.7% interest in Berong Nickel Corporation (BNC).  A change of strategy has led
the Directors to conclude that despite the presence of Robert Gregory as a
director of BNC significant influence no longer exists.  The carrying value of
the Group\'s interest in BNC is now accounted for as an available for sale
investment.  As a private company the fair value assessment of BNC necessitated
an estimate of the economic value per tonne of the contained nickel resources at
the Berong project.  The Directors have assessed the likelihood of success for
the ongoing drilling program at Berong and consider that a JORC and pre-JORC
resource of 40m tonnes is a realistic basis for valuation.  Based on an economic
value per tonne of US$40 the Directors have concluded that it is appropriate to
value the Group\'s interest in BNC at US$3,480,000.

Both investments have therefore been reallocated to "available for sale
investments" from "investments accounted for using the equity method."

6. The calculation of loss per share is based on a loss attributable to equity
shareholders of the company of US$5,106,000 for the six months to 30 September
2010 (six months to 30 September 2009 - loss US$3,726,000) and US$11,991,000 for
the year to 30 September 2010 (year to 30 September 2009 - loss US$14,369,000)
and on 158,237,624  (period to 30 September 2009 - 106,431,279) ordinary shares
of 4p each, being the weighted average number of shares in issue during the
period accounting for the four for one consolidation that took place on 21 June
2010 as if it had occurred at the start of the period.  Outstanding options have
no dilutive effect for the six months and the year to 30 September 2010.

7. Property, plant and equipment includes "Assets under construction" amounting
to US$78,477,000 (year to 30 September 2009 - US$76,183,000), which relates to
expenditure on the Çaldag project and which is not yet being depreciated.

8. Receivables includes an amount of US$7,883,000 (30 September 2009 -
US$7,719,000) recoverable in over one year.  This represents input VAT incurred
in Turkey which will in due course be recovered against taxable sales in that
country.

Receivables include a refundable deposit of US$4m which is an advance payment
for equipment for the Çaldag project that may be recalled under a bank
guarantee.

9. On 8 February 2010 76.3m ordinary shares of 1p each were issued at 7p each
raising gross proceeds of £5.34m.

On 18 June 2010 96m ordinary shares of 1p each were issued at 7p each raising
gross proceeds of £6.72m.

On 21 June 2010 a four for one consolidation of the ordinary shares of 1p each
took place.

On 24 June 2010 60.48m ordinary shares of 4p each were issued to Rusina
shareholders and optionholders.  The premium on the shares was credited to the
merger reserve.

On 20 July 2010 10m ordinary shares of 4p each were issued at 32p each raising
gross proceeds of £3.2m.

10. On 8 February 2010 the Company repaid the US$5m loan provided by Endeavour
Financial Corporation.

11. On 10 December 2010 the Company announced that until such time as the
forestry permit is received, the Caldag project will be put on care and
maintenance and the project financing process suspended.

Company information


Directors Perth Office
David Whitehead (Non-Executive Chairman) Level 1
Simon Purkiss (Executive Deputy Chairman) 83 Havelock Street
Robert Gregory (Managing Director) West Perth
Mark Hanlon (Finance Director) Western Australia 6005
Neil Herbert (Non-Executive Director) Tel: +61 (0)8 9226 1111
Paul Lush (Non-Executive Director) Fax: +61 (0)8 9226 1011
John McManus (Non-Executive Director)
  Auditors
Senior Management PKF (UK) LLP
Cevat Er Farringdon Place
Country Manager, Turkey 20 Farringdon Road
Ian Moller London EC1M 3AP
Country Manager, Philippines
  Nominated adviser and joint broker
Company Secretary Evolution Securities Limited
Robert McLearon 100 Wood St
  London
Registered office EC2V 7AN
3rd Floor
49 Albemarle Street Joint broker
London W1S 4JR Mirabaud Securities LLP
Tel: +44 20 7290 3130 33 Grosvenor Place
Fax: +44 20 7290 3149 London
  SW1X 7HY
Company registration number
4013168 Solicitors
  Fasken Martineau LLP
Web address 17 Hanover Square
www.enk.co.uk London W1S 1HU

Izmir office Bankers
Sardes Nikel Madencilik A.?. Barclays Bank PLC
Akdeniz Caddesi 54 Lombard Street
No: 14 Birsel I? Merkezi London EC3V 9EX
Kat: 5 D.502
35210 Konak Registrars
Izmir Computershare Investor Services PLC
Turkey PO Box 82
Tel: +90 232 455 0030 The Pavilions
Fax: +90 232 489 8060 Bridgwater Road
  Bristol BS99 7NH
Manila office
ENickel Services (Philippines) Dedicated Shareholder Tel:
4F Pilgrim Building 0870 889 4064
111 Aguirre Street
Legaspi Village Computershare Investor Services Pty
Makati City Limited
The Philippines Level 2, 45 St George\'s Terrace
Tel: +63 2 815 1656 Perth
Fax: +63 2 815 1655 Western Australia 6000









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Source: European Nickel PLC via Thomson Reuters ONE

[HUG#1472092]


Unternehmen: European Nickel PLC - ISIN: GB00B3XPFJ68