Impala to earn in on Ambatovy (May 27, 2005)

Dynatec (DY-T) has found its partner to develop the large Ambatovy nickel-laterite project in central Madagascar, in the person of South African platinum producer Impala Platinum (IMPUY-P).

The deal between Dynatec and Implats will see each take a 50% interest in the project, with Dynatec retaining operation of the mine and plant in Madagascar and Implats operating a new refinery in Springs, South Africa, adjoining its existing platinum-group-metal plant.

Implats’s admission ticket is a US$50-million contribution to Dynatec’s equity portion of project financing, and the company will also guarantee US$170 million of the project debt for Dynatec. The partners are in discussions with prospective third partners, who would come on board for a 25% interest, diluting Dynatec and Implats to 37.5% each. Dynatec would receive any payment from a third partner.

Implats and Dynatec will revise the current feasibility study on Ambatovy, based on the new plan to refine metal at Springs. Implats pays for that revision, budgeted at US$60 million, with US$30 million of that credited as part of its US$50-million defrayment of Dynatec’s contribution to the project.