Sumitomo Corporation (ADRS:SSUMY), one of Japan’s largest integrated trading and investment companies with total assets of 5.5 trillion yen (US$49.4 billion) and a market capitalization of 1.16 trillion yen (US$10.4 billion), announced that Sumitomo Corporation (“Sumitomo”) and Dynatec Corporation (TSX:DY) (“Dynatec”), a growing Canadian mining company with extensive mining and metallurgical expertise, have entered into an agreement, whereby Sumitomo will acquire a 25% interest in the Ambatovy Nickel Project in Madagascar (the “Project”).

Sumitomo will fund 25% of the equity requirement for Ambatovy and provide its pro rata share of project financing completion guarantees related to the project debt funding being sought for the Project. In addition, subject to certain conditions, Sumitomo will provide Dynatec with a $98 million subordinated loan facility, which will be used to fund a portion of Dynatec’s equity contributions to the Project and provide a project completion cross guarantee with respect to $249 million of Dynatec’s financing guarantees related to project debt. In exchange, Dynatec shall pay to Sumitomo a fee of 10.2 million common shares of Dynatec. Finally, Sumitomo has undertaken to ensure that for the first 15 years of production not less than 30,000 tonnes per annum of nickel produced by the Project will be acquired by offtakers (or, if required, by Sumitomo) on arms-length terms.

Mitsuhiko Yamada, Corporate Officer, General Manager of Mineral Resources Division 1 of Sumitomo, said, “Sumitomo is pleased to join the Ambatovy partnership. Ambatovy is a highly competitive project with the potential for large-tonnage long-life production of nickel metal and cobalt metal, two metals with excellent long-term fundamentals, and very low operating costs. Implats and Dynatec are excellent partners who are committed to the long-term operation of the Project and we are looking forward to working with them.”

Bryant Park Capital provided financial advisory services to Sumitomo Corporation in connection with transaction.