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Sherritt International announced Q1 2018 results

Mining News - Published on Thu, 26 Apr 2018

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Sherritt International Corporation, a world leader in the mining and hydrometallurgical refining of nickel and cobalt from lateritic ores, announced that its financial results for the first quarter ended March 31, 2018. All amounts are in Canadian currency unless noted.

Mr David Pathe, President and CEO of Sherritt International said that “Sherritt’s results for Q1 reflect the positive impact of improving commodity prices and our continuing efforts to strengthen our balance sheet.” Mr Pathe added that “We ended the quarter with more cash on hand, less debt, and higher cash received from the Moa JV – all clear signs of progress.”

Mr Pathe added that “With production challenges at the Moa JV caused by excessive rainfall and rail transportation delays largely behind us, we are bullish about our prospects for the balance of 2018 given the favorable outlook for nickel and cobalt prices due to favorable demand trends, particularly within the electric vehicle battery market.”


1. Average-realized prices at the Moa Joint Venture for nickel improved 26% to CAD 7.80 per pound while average-realized prices for cobalt increased 100% to CAD 48.47 per pound.

2. Sherritt ended the quarter with CAD 237.3 million in cash, cash equivalents and short-term investments, up from CAD 203.0 million at December 31, 2017.

3. Sherritt strengthened its balance sheet by purchasing for cancellation CAD 121.2 million of outstanding debentures at an aggregate cost of CAD 110.3 million through a modified Dutch auction tender offer. The transaction, which was funded by a unit offering that generated net proceeds of approximately CAD 125 million, brings the total amount of indebtedness eliminated by the Corporation over the past four years to approximately CAD 2 billion.

4. Received CAD 16.0 million from the Moa JV as repayment on its working capital facility and USD 40.7 million in Cuban energy payments, lowering overdue scheduled receivables to CAD 126.7 million from CAD 132.6 million at year end 2017.

5. Net direct cash cost at the Moa Joint Venture was USD 2.06 per pound of finished nickel sold, marking the fourth consecutive quarter that the Moa JV is in the lowest cost quartile.

6. Sherritt’s share of finished nickel production at the Moa JV was 2,854 tonnes in Q1 2018, down 26% from Q1 2017, while its share of finished cobalt was 336 tonnes, down 23% from Q1 2017. Consistent with previous disclosure, the decline in production in Q1 2018 was attributable to the reduced availability of mixed sulphides due to the highest level of rainfall at Moa’s operations in more than 20 years and rail transportation delays to the refinery in Fort Saskatchewan, Alberta by the rail service provider. Subsequent to quarter end, delays with rail transportation service have largely been resolved and mixed sulphides availability has been restored to normal levels.

7. Executed a three-year extension of the Puerto Escondido/Yumuri oil production sharing contract to 2021.

8. Adjusted EBITDA was CAD 36.4 million, relatively flat when compared to Q1 2017. Adjusted EBITDA in Q1 2018 reflected the impact of the restructuring of the Ambatovy Joint Venture completed in December 2017 that reduced Sherritt’s ownership interest from 40% to 12%.

9. Net loss for Q1 2018 was CAD 0.6 million or CAD nil on a per share basis. In Q1 2017, net loss was CAD 72.6 million or CAD 0.25 per share.

10. Q1 results marked Sherritt’s first full quarter of operations since its ownership interest at Ambatovy was reduced to 12% as a result of the Joint Venture restructuring completed in December 2017.

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Posted By : Rabi Wangkhem on Thu, 26 Apr 2018
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