TORONTO (miningweekly.com) – Toronto-based Sherritt International expects to finalise arrangements by the end of the second quarter for its share of construction costs for the $4,5-billion Ambatovy nickel project, in Madagascar, CFO Dean Chambers said on Wednesday.

In February, the partners in the project revised the estimated cost to build the mine to $4,52-billion, a big jump from the previous figure of $3,4-billion.

Sherritt owns 40%, Sumitomo and Korea Resources each have a 27,5% stake in the mine, and the project's engineering contractor, SNC-Lavalin, also has a 5% interest.

Sherritt is in talks with its partners for help in funding its share of the project, without putting the company's balance sheet and liquidity in jeopardy.

“We're working diligently on it and there's lots of progress being made,” Chambers said.

“We're setting up a new structure that allows for Sherritt's funding, potentially without dilution, up to the capital cost of $4,5-billion.”

He declined to disclose specifics on the arrangements being considered until an agreement is reached.

Meanwhile, construction is continuing at Ambatovy, which is currently designed to produce 60 000 t/y of nickel and 5 600 t/y of cobalt over 27 years.

Construction was 48% complete by the end of the first quarter, and the project is still expected to be mechanically complete in the second half of next year, Chambers said.

There had been no material disruptions related to the political unrest in Madagascar, where now-President Andry Rajoelina took power last month in a move that was condemned as a coup by the international community.

Besides its investment in Ambatovy, Sherritt also has nickel, oil, gas and electricity assets in Cuba, oil and gas operations in Pakistan and Spain and coal assets in Canada.