Sherritt lowers Ambatovy’s 2016 nickel target for second time this year

TORONTO – Sherritt International Corp. (TSX:S) cut its Ambatovy mine’s 2016 nickel production forecast for the second time this year.

The mining company — which operates Ambatovy and owns 40 per cent of the joint venture — said Tuesday the new production estimate is for between 40,000 and 42,000 tonnes of nickel.

That’s down 2,000 tonnes from an estimate issued in July and down 8,000 tonnes from the original 2016 estimate for between 48,000 and 50,000 tonnes of nickel from the mine in Madagascar.

Ambatovy’s 2016 cobalt production estimate is 2,000 to 3,300 tonnes — unchanged from the previous estimate but down from the original 2016 guidance for between 3,300 and 3,800 tonnes.

The revised outlook for one of Sherritt’s biggest operations was included with the company’s third-quarter financial report, which showed a loss of $120.8 million or 41 cents per share. That compared with a loss of $210 million or 72 cents per share in the third quarter of 2015.

The company reported an adjusted loss from continuing operations of $104.3 million or 35 cents per share for the quarter compared with a loss of $91.4 million or 31 cents per share a year ago.

Sherritt’s revenue totalled $58.5 million in the third quarter, down from $74.9 million in the same quarter last year.

The Ambatovy project in Madagascar is jointly owned by Sherritt, Sumitomo Corp (32.5 per cent), and Korea Resources Corp (27.5 per cent)

In January, Sherritt announced a $1.6-billion writedown of the value of its stake in Ambatovy.