TORONTO, Jan. 4 /PRNewswire-FirstCall/ -- Inco Limited announced today that it and Goro Nickel S.A., its approximately 85 per cent owned subsidiary and the project company for the Goro project, have entered into the necessary agreements covering the previously announced Girardin Act tax-advantaged lease financing program provided by the French Government for the Goro nickel-cobalt project in New Caledonia. This French legislative program provides certain tax incentives for French qualified investors to extend financing to companies like Goro Nickel who sponsor investments or projects in French overseas territorial communities like New Caledonia.
Under the terms of the Girardin Act lease financing, an initial drawdown was made at year-end 2004 to finance the purchase of specified equipment and other assets for the Goro project's planned process plant. Additional drawdowns are currently scheduled to be made in 2005 and 2006. This program is currently expected to involve the lease financing of a total of about U.S. $500 million in equipment and other assets for the process plant.
Inco Limited currently estimates that Goro Nickel would, through the effective forgiveness of approximately U.S. $130 million of the total financing to be provided by the French qualified investors under this program for the purchase of equipment and assets for the Goro project's process plant, realize net cash benefits totalling approximately U.S. $130 million. This estimate assumes that all of the terms and conditions of this financing are met on a timely basis and that the maximum amounts to be drawn down in 2005 and 2006 would be available based upon certain assumptions relating to this financing. The terms and conditions of this financing include a 12-year lease payment schedule commencing in 2008 and require that the project meets certain minimum production, operating and other tests over the currently projected 2005 - 2012 period.
"We would like to thank the French government and all of the other parties involved in the Girardin financing for their efforts," stated Scott Hand, Chairman and CEO of Inco. "We continue to make steady progress in achieving the key milestones needed to make our Goro project a reality."
Since late October 2004, Inco Limited and Goro Nickel have continued their negotiations on completing a definitive agreement on the acquisition by the three provinces of New Caledonia of the interest in Goro Nickel held by the French Government agency, Bureau de Recherches Geologiques et Minieres ("BRGM"), as part of a required realignment of the equity ownership in the project to enable Sumitomo Metal Mining Co., Ltd. and Mitsui & Co., Ltd. to become shareholders in Goro Nickel. Once the capitalization of certain shareholder advances made since late 2001 to meet Goro Nickel's funding requirements, currently expected to be completed by late January 2005, this will have the effect of reducing BRGM's current approximately 15 per cent interest in Goro Nickel to about 10 per cent. It is currently expected that this acquisition, as well as a shareholders agreement covering the rights that the three provinces will have as a shareholder in Goro Nickel, including their right to maintain a 10 percent interest in Goro Nickel, will be completed by late January 2005.
Inco has also continued negotiations to finalize the definitive agreements with Sumitomo Metal Mining Co., Ltd. and Mitsui & Co., Ltd. covering their purchase from Inco of a 21 per cent interest in Goro Nickel. Inco and Goro Nickel currently expect that the finalization of these definitive agreements covering the terms and conditions of this acquisition and certain other arrangements relating to the participation of these two Japanese companies in the project, including pro rata rights to product offtake, and the purchase of this 21 per cent interest will be completed by the late January - early February 2005 period.
This news release contains forward-looking statements regarding the Company and its Goro nickel-cobalt project, including anticipated sources of financing and agreements and other arrangements with the provinces of New Caledonia, the Government of France, Sumitomo Metal Mining Co., Ltd., Mitsui & Co., Ltd. and certain other parties. Actual results and developments may differ materially from those contemplated by these statements depending on, among others, the capital cost, scope, schedule, ramp-up and other key aspects of the Goro project, the timing of receipt of all necessary permits and regulatory approvals, engineering and construction timetables, implementation of the necessary financing plans, including the Girardin Act financing arrangements, and the other necessary agreements with the French Government and the Provinces of New Caledonia, and the finalization of the arrangements for the restructuring of the ownership of Goro Nickel S.A., and joint venture, partner or similar investments and other agreements and arrangements associated with, the Goro project.
Inco Limited
Under the terms of the Girardin Act lease financing, an initial drawdown was made at year-end 2004 to finance the purchase of specified equipment and other assets for the Goro project's planned process plant. Additional drawdowns are currently scheduled to be made in 2005 and 2006. This program is currently expected to involve the lease financing of a total of about U.S. $500 million in equipment and other assets for the process plant.
Inco Limited currently estimates that Goro Nickel would, through the effective forgiveness of approximately U.S. $130 million of the total financing to be provided by the French qualified investors under this program for the purchase of equipment and assets for the Goro project's process plant, realize net cash benefits totalling approximately U.S. $130 million. This estimate assumes that all of the terms and conditions of this financing are met on a timely basis and that the maximum amounts to be drawn down in 2005 and 2006 would be available based upon certain assumptions relating to this financing. The terms and conditions of this financing include a 12-year lease payment schedule commencing in 2008 and require that the project meets certain minimum production, operating and other tests over the currently projected 2005 - 2012 period.
"We would like to thank the French government and all of the other parties involved in the Girardin financing for their efforts," stated Scott Hand, Chairman and CEO of Inco. "We continue to make steady progress in achieving the key milestones needed to make our Goro project a reality."
Since late October 2004, Inco Limited and Goro Nickel have continued their negotiations on completing a definitive agreement on the acquisition by the three provinces of New Caledonia of the interest in Goro Nickel held by the French Government agency, Bureau de Recherches Geologiques et Minieres ("BRGM"), as part of a required realignment of the equity ownership in the project to enable Sumitomo Metal Mining Co., Ltd. and Mitsui & Co., Ltd. to become shareholders in Goro Nickel. Once the capitalization of certain shareholder advances made since late 2001 to meet Goro Nickel's funding requirements, currently expected to be completed by late January 2005, this will have the effect of reducing BRGM's current approximately 15 per cent interest in Goro Nickel to about 10 per cent. It is currently expected that this acquisition, as well as a shareholders agreement covering the rights that the three provinces will have as a shareholder in Goro Nickel, including their right to maintain a 10 percent interest in Goro Nickel, will be completed by late January 2005.
Inco has also continued negotiations to finalize the definitive agreements with Sumitomo Metal Mining Co., Ltd. and Mitsui & Co., Ltd. covering their purchase from Inco of a 21 per cent interest in Goro Nickel. Inco and Goro Nickel currently expect that the finalization of these definitive agreements covering the terms and conditions of this acquisition and certain other arrangements relating to the participation of these two Japanese companies in the project, including pro rata rights to product offtake, and the purchase of this 21 per cent interest will be completed by the late January - early February 2005 period.
This news release contains forward-looking statements regarding the Company and its Goro nickel-cobalt project, including anticipated sources of financing and agreements and other arrangements with the provinces of New Caledonia, the Government of France, Sumitomo Metal Mining Co., Ltd., Mitsui & Co., Ltd. and certain other parties. Actual results and developments may differ materially from those contemplated by these statements depending on, among others, the capital cost, scope, schedule, ramp-up and other key aspects of the Goro project, the timing of receipt of all necessary permits and regulatory approvals, engineering and construction timetables, implementation of the necessary financing plans, including the Girardin Act financing arrangements, and the other necessary agreements with the French Government and the Provinces of New Caledonia, and the finalization of the arrangements for the restructuring of the ownership of Goro Nickel S.A., and joint venture, partner or similar investments and other agreements and arrangements associated with, the Goro project.
Inco Limited
© 2005 PR Newswire
