 TORONTO (miningweekly.com) – Toronto-based Sherritt International does not have any concerns at this point with meeting the scheduled timeline for its Ambatovy nickel project, in Madagascar, CFO Dean Chambers said on Wednesday.
The project is scheduled for mechanical completion by year-end 2010.
“We are always consistently reviewing our schedule and our spending profile on an ongoing basis, but we are confident of the schedule at this time,” Chambers said on a conference call.
Sherritt owns 40% of the Ambatovy project, Sumitomo and a consortium led by Korea Resources each have a 27,5% stake in the mine, and the project's engineering contractor, SNC-Lavalin, also has a 5% interest.
Chambers said that plans by Korea Resources to sell a part of its holding to another Korean company should not have any impact on the project or Sherritt's agreements with the partners.
“Korea Resources is the largest participant by far in that consortium and what they are proposing is effectively a restructuring within the consortium,” he said in response to an analyst question.
“Korea Resources will still be the largest participant. And all of the contractual arrangements that we have are directly with Korea Resources, so this should have no impact on the project or on our arrangements with the partners. “
There have been changes in the consortium make-up “from time to time” in the past as well, Chambers added.
The partners spent a total of C$330,9-million on Ambatovy in the third quarter, bringing total expenditures to date to $3,1-billion.
All major foundation work has now been completed and the hydrotest of the first boiler in the power plant was completed successfully during the quarter.
The Ambatovy mine is expected to produce 60 000 t of nickel and 5 600 t of cobalt a year.
In June this year, Sherritt finalised arrangements with the other partners, which agreed to provide loans to fund the Canadian firm's share of the remaining capital spending on the project.
EARNINGS DOWN
Besides the Ambatovy project, Sherritt also has nickel, oil, gas and electricity assets in Cuba, oil and gas operations in Pakistan and Spain and coal assets in Canada.
The company earned C$55,9-million in the third quarter, compared with C$133,1-million a year earlier.
Profit was affected by lower realised prices for the company's nickel, cobalt, coal and oil.
Shares in the company slid 5,5% on Wednesday, to C$6,85 apiece by 15:40 in Toronto.
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