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Sherritt, partners arrange funding for Ambatovy nickel mine

Sherritt International said Wednesday it has finalized arrangements with its partners for the remaining funding for the Ambatovy nickel project in Madagascar.

Japan's Sumitomo Corp., Korea Resources Corp and SNC-Lavalin Inc. have agreed to fund Sherritt's pro rata share of shareholder funding for the Ambatovy Project, which is currently under construction.

Ambatovy is owned 40 per cent by Sherritt and is expected to one day produce 60,000 tonnes of nickel a year. Sumitomo and Korea Resources each hold a 27.5-per-cent interest, while SNC-Lavalin indirectly hold a 5-per-cent interest in the project.

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Toronto-based Sherritt, which also operates in Cuba and Canada, said in February that the project's construction costs had ballooned to $4.5-billion, forcing it to seek alternative funding options to finance its share.

Financing of $2.1-billion is already in place. The company said this funding will be unaffected by the new arrangements.

The partners have the right to exchange some or all of the new loans for a share of Sherritt's equity interest in the project.

Construction of the Ambatovy project is about 50-per-cent complete and mechanical completion is on schedule for the latter part of 2010.

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