Direct Nickel seeks to raise $1m to help fund RI plant

By Romel S. Gurky

ASX-listed Direct Nickel Limited (DNi) said Thursday that it is undertaking a placement to raise funds for future corporate development and has also initiated plans for funding its first commercial plant in Indonesia.

The company said in a statement it will be undertaking a private placement to raise up to A$1 million for working capital. The raise is targeting sophisticated investors and existing shareholders and is being managed by Sydney Capital Partners.

?The funds raised will be used to support programs currently underway in Indonesia with partner PT Antam, as well as to maintain its Test Plant facilities at CSIRO?s Australian Minerals Research Centre in Perth,? the company said, referring to IDX-listed mining firm PT Aneka Tambang.

Antam and DNi are currently undertaking a feasibility study with the aim of developing the first nickel laterite processing plant in Indonesia using the DNi Process.

Antam has already confirmed approval of the site selected for the plant adjacent to Antam?s ferronickel plant, a location crucial for providing ready access to a power supply, shipping wharf and office/work shop facilities. ?The joint venture, PT Nikel Halmahera Timur in which DNi holds a 50 percent interest, has successfully completed all the necessary regulatory steps in September in order to be officially incorporated in Indonesia,? the statement explained.

The DNi Process has the potential to materially change the cost structures of the nickel industry, and this fact along with an increase in the market?s confidence in this process following the company?s successful test plant program in 2013-2014 has resulted in a number of investment banks being attracted to the opportunity.

Elsewhere, DNi said that three investment banks have responded to a formal tender, with proposals to fund the joint venture entity for the feasibility study for the first commercial plant in Indonesia. ?The selection process is underway,? it said.

?Direct Nickel believes that with the potential for CAPEX and OPEX to be reduced by as much as 50 percent compared with traditional processing and with the potential to reduce capital intensity by operating smaller, scalable plants, the joint venture will also be able to attract a range of industrial and strategic investors going forward. The company has initiated discussions with industrial groups in China, Japan and elsewhere in Asia, including product-related discussions with steel-sector group.?

Editing by Reiner Simanjuntak