Sherritt International Corporation (TSX:S) today announced it has executed an earn-in and shareholders agreement with a subsidiary of Rio Tinto Limited whereby Sherritt will acquire an interest in the Sulawesi Nickel Project in Indonesia.
Subject to satisfaction of certain conditions, Sherritt will acquire a controlling 57.5% equity interest in the holding company that owns the Sulawesi Project, and Rio Tinto will continue to hold the remaining 42.5%. Sherritt has been appointed as the Operator and will license its commercially-proven, proprietary technology to the Project. As consideration for its interest, Sherritt has committed to fund US$110 million towards producing a feasibility study from which a development decision will be made.
In compliance with Indonesia's Mining Law, local Indonesian interests are expected to acquire a 20% interest in the Project. Following that event, Sherritt and Rio Tinto together will indirectly own and control an 80% interest in the Sulawesi Project, which will give Sherritt a controlling interest and a 46% economic interest with Rio Tinto maintaining a 34% economic interest.
The Sulawesi Project currently ranks as one of the largest known undeveloped, greenfield lateritic nickel deposits in the world. Ian W. Delaney, Sherritt's Chairman and CEO commented, "The Sulawesi Project is a truly impressive, high quality lateritic nickel resource. With 60 years of technological expertise in lateritic solutions, 50 years of operational experience in Canada and Cuba, and most recently, its project experience in the development of the Ambatovy Project in Madagascar, Sherritt is uniquely positioned to help move the Sulawesi Project forward. We will begin process development and further delineation of the resource immediately."
About the Sulawesi Project
The Sulawesi Project is located in the Southeast and Central Sulawesi provinces on the island of Sulawesi in the Republic of Indonesia. Based on exploration completed to date, the Project includes a large, high grade resource potentially richer than Ambatovy. Identification of further mineralization will be achieved through additional exploration and completion of feasibility studies.
Source: Sherritt International Corporation