Sherritt to transfer part ownership of Madagascar mine to settled debt woes

TORONTO _ Sherritt International Corp. (TSX:S) says it has reached a deal with the joint owners of a Madagascar mine that will see it transfer more ownership to cut its outstanding debt.

The Toronto-based miner says it will shift a 28 per cent interest in the Ambatovy nickel mine joint venture to partners Sumitomo Corp. and Korea Resources Corp. in a deal that will eliminate $1.3 billion in partner loans from its balance sheet.

Sherritt will be left with a 12 per cent stake in the mine, but remain operator until at least 2024.

The company has struggled to make payments on its debt to the partners, and has been operating under a temporary deferral agreement while unable to make cash payments.

Sherritt says the Ambatovy mine is the world’s largest finished nickel operation of its kind, with expected production this year of 36,000- to 39,000-tonnes of finished nickel and 3,300 to 3,600 tonnes of finished cobalt.

The company also says it has had a fatality at its Energas S.A. power generation in Cuba due to an apparent electrocution.