Sherritt Ends 2021 With Strong Production Results and a Favourable Outlook for Nickel and Cobalt Markets
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE U.S.
TORONTO–(BUSINESS WIRE)–Sherritt International Corporation (“Sherritt”, the “Corporation”, the “Company”) (TSX: S), a world leader in the mining and hydrometallurgical refining of nickel and cobalt from lateritic ores, today reported its financial results for the three months and year ended December 31, 2021. All amounts are in Canadian currency unless otherwise noted.
“Our fourth quarter results capped a year of transition for Sherritt as we pivot towards growth and expansion,” said Leon Binedell, President and CEO of Sherritt International Corporation. “Against a backdrop of a global pandemic, continued sanctions against Cuba, and rising input costs, our strong performance in the fourth quarter enabled us to meet our 2021 targets for production and unit costs at each of our business units. Just as significantly, we also embarked on a multi-pronged strategy focused on generating incremental cash flow and transformative growth at a low capital intensity.”
Mr. Binedell added, “Underpinning the progress we made in 2021 were improved nickel and cobalt market fundamentals being driven by the rapid adoption of electric vehicles. With market conditions expected to be bullish in the near term, Sherritt provides favourable exposure to rising nickel prices as one of the few pure play companies. And as we commercialize projects developed by Sherritt Technologies, increase our combined nickel and cobalt production capacity by up to 20%, and extend the mine life of Moa beyond 2040, we expect to significantly grow shareholder value over the coming years.”
SELECTED Q4 2021 DEVELOPMENTS
- Sherritt’s share of finished nickel and cobalt production at the Moa Joint Venture (Moa JV) were 4,266 tonnes and 476 tonnes, respectively. The totals, which are consistent with historical performance and reflective of efforts to mitigate the impacts of COVID-19 and the 13-day full-facility shutdown experienced in Q3 2021, enabled Sherritt to meets its production guidance at the Moa JV for FY2021(1).
- Net Direct Cash Cost (NDCC)(2) at the Moa JV was US$3.60/lb, the lowest total since Q4 2018. NDCC in Q4 2021 benefitted from improved cobalt and fertilizer by-product credits offset by significantly higher input costs, including a 146% increase in sulphur prices, 76% increase in natural gas prices and 72% increase in fuel oil prices.
- Sherritt recognized net earnings from continuing operations of $14.4 million, or $0.04 per share, for Q4 2021 compared to a net loss of $49.3 million, or a loss of $0.12 per share, in Q4 2020. Adjusted EBITDA(2) was $46.4 million, the highest total since Q4 2017 and indicative of improved nickel and cobalt market fundamentals and Sherritt’s continued efforts to reduce costs.
- In support of the growth strategy announced on November 3, 2021 aimed at growing finished nickel and cobalt production by 15 to 20% of combined totals achieved in FY2021 and extending the life of mine at Moa beyond 2040, the Moa JV completed a feasibility study for a new slurry preparation plant (SPP) and received approval for planned expenditures from its Board of Directors. The SPP, which is estimated to cost US$27 million and be completed in early 2024 will deliver a number of benefits, including reduced ore haulage, lower carbon intensity from mining, and increased annual production of mixed sulphides by approximately 1,700 tonnes commencing in mid-2024.
- Sherritt outlined its strategic priorities for 2022, which are focused on establishing the Corporation as a leading green metals producer, leveraging its Technologies group for transformational growth, achieving balance sheet strength, being recognized as a sustainable organization, and maximizing the value of its Cuban energy businesses.
- Dr. Peter Hancock, a mining industry executive with more than 30 years of experience overseeing nickel mining operations, developing and commercializing process technologies, and ramping up nickel projects, was appointed to Sherritt’s Board of Directors.
- Announced the planned retirement of Chief Operating Officer, Steve Wood, effective April 30, 2022.
- Sherritt made a number of promotions to its senior leadership to accelerate its multi-pronged growth strategy naming Dan Rusnell Senior Vice President of Metals, Elvin Saruk Head of Growth Projects in addition to his accountabilities for Oil & Gas and Power, and Greg Honig Head of Marketing and the Technologies Group in addition to his accountabilities as Chief Commercial Officer.
- Sherritt amended its syndicated revolving-term credit facility with its lenders, increasing the maximum amount of credit available to $100 million from $70 million and extending the maturity to April 2024. Under the amended terms, borrowings on the credit facility are available to fund capital as well as for working capital purposes. Spending on capital expenditures cannot exceed $75 million in a fiscal year. Capital expenditure restrictions do not apply to planned spending of Moa Nickel S.A. The increase in credit facility is indicative of Sherritt’s strengthened financial position and favourable outlook in light of improved nickel and cobalt markets.
- Received US$6.5 million in Cuban energy payments. Sherritt anticipates continued variability in the timing of collections into 2022, and is working with its Cuban partners to ensure timely receipts.
- Environmental rehabilitation obligations (ERO) held by Sherritt’s Spanish Oil and Gas operations were secured by a parent company guarantee of €31.5 million ($46.7 million) until December 31, 2023. Unlike the $47 million letter of credit issued previously to support the ERO and secured by Sherritt’s credit facility, the new guarantee has no impact on the Corporation’s available liquidity.
|
(1) |
Sherritt adjusted its nickel production guidance for 2021 on November 3, 2021 as a result of disruptions caused in the third quarter by the spread of COVID-19, extension of the full-facility shutdown at the refinery in Fort Saskatchewan, Alberta, and unplanned maintenance activities. |
|||
|
(2) |
Non-GAAP financial measures. For additional information see the Non-GAAP and other financial measures section of this press release. |
SUMMARY OF KEY 2021 DEVELOPMENTS
- Sherritt ended 2021 with cash and cash equivalents of $145.6 million ($78.9 million held by Energas in Cuba), down from $167.4 million at the end of last year ($75 million held by Energas in Cuba). The lower cash position and amount held in Canada were driven by lower energy payments from Cuban partners on account of their reduced access to foreign currency and by the deferral of distributions expected from the Moa JV in the fourth quarter as it assessed the impact of delays in product deliveries on account of flooding in B.C. and congestion at the Vancouver Port in November. In January 2022, Sherritt received $8.1 million as its share of Moa JV distributions.
- Sherritt’s share of production, unit costs, and spending on capital for each of its business units in 2021 were in line with guidance for the year, indicative of ongoing commitments to operational excellence and efforts to mitigate the spread of COVID-19 through additional health and safety measures designed to protect employees, suppliers, and other stakeholders at its operations in Canada and Cuba.
- Sherritt announced it is embarking on an expansion strategy with its Cuban partners to capitalize on the growing demand for high purity nickel and cobalt being driven by the accelerated adoption of electric vehicles which builds on the 26-year successful track record of the Moa Joint Venture and centres on growing annual finished nickel and cobalt production by 15 to 20% from the 34,710 tonnes produced in 2021 and extending the life of mine at Moa beyond 2040 through the conversion of mineral resources into reserves using an economic cut-off grade.
- Sherritt improved its net earnings from continuing operations by $72.3 million in FY2021 as a result of strengthened nickel, cobalt, and fertilizer prices and efforts to reduce operating and corporate costs. Adjusted EBITDA was $112.2 million, up 188% from last year.
- Implemented a 10% workforce reduction at Sherritt’s Corporate office in Toronto that will result in a savings of employee costs of approximately $1.3 million annually.
- Sherritt released its 2020 Sustainability Report that featured a number of upgraded environmental, social, and governance (ESG) targets, including achieving net zero greenhouse emissions by 2050, obtaining 15% of overall energy from renewable sources by 2030, reducing nitrogen oxide emission intensity by 10% by 2024, and increasing the number of women in the workforce to 36% by 2030.
- Named Leon Binedell as President and CEO, Yasmin Gabriel as Chief Financial Officer, Greg Honig as Chief Commercial Officer, and Chad Ross as Chief Human Resources Officer as part of senior leadership changes. The appointments underscore Sherritt’s two-pronged growth strategy focused on capitalizing on the accelerating demand for high-purity nickel and cobalt from the electric vehicle industry and commercializing innovative process technology solutions for resources companies looking to improve their environmental performance and increase economic value.
DEVELOPMENTS SUBSEQUENT TO THE YEAR END
- Sherritt received $8.1 million of its share of Moa JV distributions on January 19, 2022. Given prevailing nickel and cobalt prices, planned spending on capital at the Moa JV, and expected liquidity requirements Sherritt anticipates an additional distribution in Q1 2022. Sherritt also expects distributions for FY2022 to be greater than the $35.9 million (excluding re-directions from its Cuban partner, General Nickel Company S.A.) received in FY2021.
Q4 2021 FINANCIAL HIGHLIGHTS
|
|
For the three months ended |
|
|
For the year ended |
|
|||||||||||
|
|
|
2021 |
|
2020 |
|
|
2021 |
|
2020 |
|
||||||
|
$ millions, except per share amount |
December 31 |
December 31 |
Change |
December 31 |
December 31 |
Change |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Revenue |
$ |
36.6 |
|
$ |
28.2 |
|
30 |
% |
$ |
110.2 |
|
$ |
119.8 |
|
(8 |
%) |
|
Combined revenue(1) |
|
198.6 |
|
|
135.9 |
|
46 |
% |
|
612.8 |
|
|
497.0 |
|
23 |
% |
|
Earnings (loss) from operations and joint venture |
|
20.5 |
|
|
(33.9 |
) |
160 |
% |
|
8.5 |
|
|
(197.1 |
) |
104 |
% |
|
Net earnings (loss) from continuing operations |
|
14.4 |
|
|
(49.3 |
) |
129 |
% |
|
(13.4 |
) |
|
(85.7 |
) |
84 |
% |
|
Net earnings (loss) for the period |
|
14.1 |
|
|
(49.6 |
) |
128 |
% |
|
(18.4 |
) |
|
22.2 |
|
(183 |
%) |
|
Adjusted EBITDA(1) |
|
46.4 |
|
|
10.7 |
|
334 |
% |
|
112.2 |
|
|
38.9 |
|
188 |
% |
|
Net earnings (loss) from continuing operations ($ per share) |
|
0.04 |
|
|
(0.12 |
) |
133 |
% |
|
(0.03 |
) |
|
(0.22 |
) |
86 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Cash (used) provided by continuing operations for operating activities |
|
(13.4 |
) |
|
12.7 |
|
(206 |
%) |
|
1.3 |
|
|
48.0 |
|
(97 |
%) |
|
Combined free cash flow(1) |
|
(26.4 |
) |
|
(11.6 |
) |
(128 |
%) |
|
14.5 |
|
|
17.9 |
|
(19 |
%) |
|
Average exchange rate (CAD/US$) |
|
1.260 |
|
|
1.303 |
|
(3 |
%) |
|
1.254 |
|
|
1.341 |
|
(7 |
%) |
| (1) |
Non-GAAP financial measures. For additional information see the Non-GAAP and other financial measures section of this press release. |
|
$ millions, as at December 31 |
|
|
|
2021 |
|
2020 |
Change |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Cash and cash equivalents |
|
|
|
|
|
$ |
145.6 |
$ |
167.4 |
(13 |
%) |
|
|
Loans and borrowings |
|
|
|
|
|
|
444.5 |
|
441.4 |
1 |
% |
|
Cash and cash equivalents at December 31, 2021 were $145.6 million, down from $163.4 million at September 30, 2021. During the quarter, the Moa JV deferred distributions to its partners as it assessed the impact of delays in customer deliveries caused by flooding in B.C. and congestion at the Vancouver port on its expected cash needs. Subsequent to the year end, Sherritt received $8.1 million as its share of Moa JV distributions.
During the quarter, the Corporation received US$6.5 million in Cuban energy payments, which were offset by the interest payment of $14.8 million on the second lien notes and sustaining capital expenditures of $2.9 million.
During 2021, Sherritt received a total of $52.8 million in direct and re-directed distributions from the Moa JV and its partner, General Nickel Company S.A. (GNC).
Total overdue scheduled receivables at December 31, 2021 were US$156 million, up from US$152.5 million at September 30, 2021. Subsequent to year end, Sherritt received US$2.2 million in Cuban energy payments. Collections on overdue amounts from Sherritt’s Cuban energy partners continue to be adversely impacted by Cuba’s access to foreign currency as a result of ongoing U.S. sanctions and the global pandemic. While Sherritt anticipates improved economic conditions in Cuba in 2022, it continues to anticipate variability in the timing and the amount of energy payments in the near term, and continues to work with its Cuban partners to ensure timely receipt of energy payments.
Of the $145.6 million of cash and cash equivalents, $64.2 million was held in Canada, down from $82.1 million at September 30, 2021 and $78.9 million was held at Energas, up from $76.7 million at September 30, 2021. The remaining amounts were held in Cuba and other countries.
Adjusted net earnings (loss) from continuing operations(1)
|
|
|
2021 |
|
2020 |
||||||||
|
For the three months ended December 31 |
$ millions |
$/share |
$ millions |
$/share |
||||||||
|
|
|
|
|
|
|
|
|
|
||||
|
Net earnings (loss) from continuing operations |
|
14.4 |
|
|
0.04 |
|
(49.3 |
) |
|
(0.12 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Adjusting items: |
|
|
|
|
|
|
|
|
||||
|
Unrealized foreign exchange (gain) loss – continuing operations |
|
(1.4 |
) |
|
– |
|
4.3 |
|
|
0.01 |
|
|
|
Other contractual benefits expense |
|
0.6 |
|
|
– |
|
– |
|
|
– |
|
|
|
Realized and unrealized losses on commodity put options, net |
|
0.1 |
|
|
– |
|
3.4 |
|
|
0.01 |
|
|
|
Impairment of Power assets |
|
– |
|
|
– |
|
9.4 |
|
|
0.02 |
|
|
|
Other(2) |
|
1.3 |
|
|
– |
|
2.3 |
|
|
0.01 |
|
|
|
Total adjustments, before tax |
|
0.6 |
|
|
– |
|
19.4 |
|
|
0.05 |
|
|
|
Tax adjustments |
|
(0.2 |
) |
|
– |
|
(1.8 |
) |
|
(0.01 |
) |
|
|
Adjusted net earnings (loss) from continuing operations |
|
14.8 |
|
|
0.04 |
|
(31.7 |
) |
|
(0.08 |
) |
|
|
|
|
2021 |
|
2020 |
||||||||
|
For the year ended December 31 |
|
$ millions |
|
$/share |
$ millions |
$/share |
||||||
|
|
|
|
|
|
|
|
|
|
||||
|
Net loss from continuing operations |
|
(13.4 |
) |
|
(0.03 |
) |
|
(85.7 |
) |
|
(0.22 |
) |
|
|
|
|
|
|
|
|
|
|
||||
|
Adjusting items: |
|
|
|
|
|
|
|
|
||||
|
Unrealized foreign exchange gain – continuing operations |
|
(4.7 |
) |
|
(0.01 |
) |
|
(4.4 |
) |
|
(0.01 |
) |
|
Severance and other contractual benefits expense |
|
6.1 |
|
|
0.02 |
|
|
– |
|
|
– |
|
|
Realized and unrealized losses on commodity put options, net |
|
5.6 |
|
|
0.02 |
|
|
3.4 |
|
|
0.01 |
|
|
Gain on repurchase of notes |
|
(2.1 |
) |
|
(0.01 |
) |
|
– |
|
|
– |
|
|
Gain on debenture exchange |
|
– |
|
|
– |
|
|
(142.3 |
) |
|
(0.36 |
) |
|
Impairment of Oil assets |
|
– |
|
|
– |
|
|
115.6 |
|
|
0.30 |
|
|
Realized foreign exchange gain due to Cuban currency unification |
|
(10.0 |
) |
|
(0.03 |
) |
|
– |
|
|
– |
|
|
Impairment of Power assets |
|
– |
|
|
– |
|
|
9.4 |
|
|
0.03 |
|
|
Other(2) |
|
5.0 |
|
|
0.01 |
|
|
1.7 |
|
|
– |
|
|
Total adjustments, before tax |
|
(0.1 |
) |
|
– |
|
|
(16.6 |
) |
|
(0.03 |
) |
|
Tax adjustments |
|
(0.4 |
) |
|
– |
|
|
(2.4 |
) |
|
(0.01 |
) |
|
Adjusted net loss from continuing operations |
|
(13.9 |
) |
|
(0.03 |
) |
|
(104.7 |
) |
|
(0.26 |
) |
| (1) |
A non-GAAP financial measure. The tables above summarize some of the key components of Adjusted net earnings (loss) from continuing operations and associated per share amount. For a full reconciliation to net earnings (loss) from continuing operations and additional information see the Non-GAAP and other financial measures section of this press release. |
|||
| (2) |
Other items primarily relate to inventory obsolescence and (gains) losses in net finance (expense) income. |
METALS MARKET
Nickel
Nickel prices hit a seven-year high in Q4 2021, climbing to US$9.59/lb on November 24. The price increase was driven by improving market fundamentals, including strong demand from across multiple industries, consumer stockpiling, reduced inventory levels, and ongoing supply disruptions caused by COVID-19. Rising nickel prices and favourable market conditions were jolted by the rapid spread of the Omicron variant and concerns of its impact on the global economy in early December, causing prices to soften slightly through to the end of the quarter. Nickel prices closed the year at US$9.49/lb, representing a 27% increase for 2021 relative to the closing price of 2020 of US$7.50/lb.
Since the start of 2022, nickel prices have sustained their recent momentum, reaching US$10.89/lb on January 21, the highest price in more than 10 years. It is anticipated that nickel prices will maintain their current robustness through the end of 2022 based on forecasts provided by industry analysts.
Strong nickel demand in Q4 was reflected by the continued decrease in inventory levels since the start of 2021. In Q4, nickel inventory levels on the London Metals Exchange (LME) fell by 35% from 157,062 tonnes at the start of the period to 101,886 tonnes on December 31. Similarly, inventory levels on the Shanghai Futures Exchange fell 35% to 2,406 tonnes, down from 3,728 tonnes at the start of the quarter.
Industry analysts, including Wood Mackenzie and S&P Global, have forecast continued strong demand and market tightness through to the end of the 2022. LME nickel inventories continued to decline in 2022, falling below 100,000 tonnes on January 10, reaching 85,644 tonnes on February 9, the lowest level since November 2019.
Visibility of market fundamentals, including inventory levels, in the mid-term is limited given the economic uncertainty caused by the pandemic and news from Indonesia suggesting that the country, one of the world’s largest suppliers of nickel, plans to curtail exports in an effort to support a domestic refining and processing activities.
The long-term outlook for nickel remains bullish on account of the strong demand expected from the stainless steel sector, the largest market for nickel, and the electric vehicle battery market. Some market observers, such as Wood Mackenzie, have forecast a prolonged nickel supply deficit beginning in 2025 due to recent developments in the electric vehicle market and insufficient nickel production coming on stream in the near term.
Over the past year, multiple automakers and governments have announced plans for significant investments to expand electric vehicle production capacity to meet growing demand as well as more aggressive timelines to phase out the sale of internal combustion engines. In 2021, more than 6.5 million plug-in electric vehicles were sold despite the global pandemic. Industry observers estimate that the number of electric vehicles sold in 2022 will grow to 8.6 million units. CRU has forecast that electric vehicles sales will grow to 17.4 million units by 2025.
As a result of its unique properties, high-nickel cathode formulations remain the dominant choice for long-range electric vehicles manufactured by automakers with Class 1 nickel being an essential feedstock in the battery supply chain. Sherritt is particularly well positioned given our Class 1 production capabilities and the fact that Cuba possesses the world’s fourth largest nickel reserves.
Cobalt
Cobalt prices rose steadily in Q4 2021, closing on December 31 at US$33.78/lb, up 30% from US$25.88/lb at the start of the quarter according to data collected by Fastmarkets MB.
Higher cobalt prices in Q4 2021 were primarily driven by increased buying from electric vehicle battery manufacturers. Cobalt is a key component of rechargeable batteries providing energy stability. Higher cobalt prices in Q4 2021 were also impacted by increased stockpiling by consumers and ongoing supply logistics disruptions in South Africa, where cobalt produced in the Democratic Republic of Congo, the source of almost two-thirds of the world’s supply, is sent before being shipped internationally.
Industry observers, such as CRU, expect cobalt prices to continue to be robust in the near term as limited new sources of supply have been announced to fill expected demand over the next five years.
The outlook for cobalt over the long term remains bullish as demand is expected to grow to approximately 280,000 tonnes by 2025, representing a compound annual growth rate of 13.5% according to CRU.
REVIEW OF OPERATIONS
Moa Joint Venture (50% interest) and Fort Site (100%)
|
|
For the three months ended |
|
For the year ended |
|
||||||||||||
|
|
|
2021 |
|
2020 |
|
|
2021 |
|
2020 |
|
||||||
|
$ millions (Sherritt’s share), except as otherwise noted |
December 31 |
December 31 |
Change |
December 31 |
December 31 |
Change |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
FINANCIAL HIGHLIGHTS |
|
|
|
|
|
|
|
|
|
|
||||||
|
Revenue(1) |
$ |
183.2 |
|
$ |
118.8 |
|
54 |
% |
$ |
560.6 |
|
$ |
425.5 |
|
32 |
% |
|
Cost of Sales(1) |
|
142.7 |
|
|
111.3 |
|
28 |
% |
|
451.4 |
|
|
411.7 |
|
10 |
% |
|
Earnings from operations |
|
36.2 |
|
|
4.4 |
|
723 |
% |
|
98.3 |
|
|
3.9 |
|
nm(2) |
|
|
Adjusted EBITDA(3) |
|
49.4 |
|
|
24.8 |
|
99 |
% |
|
152.3 |
|
|
68.7 |
|
122 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
CASH FLOW |
|
|
|
|
|
|
|
|
|
|
||||||
|
Cash provided by continuing operations for operating activities |
$ |
8.9 |
|
$ |
13.4 |
|
(34 |
%) |
$ |
90.5 |
|
$ |
53.7 |
|
69 |
% |
|
Free cash flow(3) |
|
0.6 |
|
|
4.1 |
|
(85 |
%) |
|
56.5 |
|
|
24.5 |
|
131 |
% |
|
Dividend distributions from the Moa Joint Venture(4) |
|
– |
|
|
26.3 |
|
(100 |
%) |
|
35.9 |
|
|
39.6 |
|
(9 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
PRODUCTION VOLUMES (tonnes) |
|
|
|
|
|
|
|
|
|
|
||||||
|
Mixed Sulphides |
|
3,881 |
|
|
4,421 |
|
(12 |
%) |
|
16,498 |
|
|
17,429 |
|
(5 |
%) |
|
Finished Nickel |
|
4,266 |
|
|
4,020 |
|
6 |
% |
|
15,592 |
|
|
15,753 |
|
(1 |
%) |
|
Finished Cobalt |
|
476 |
|
|
451 |
|
6 |
% |
|
1,763 |
|
|
1,685 |
|
5 |
% |
|
Fertilizer |
|
65,021 |
|
|
56,277 |
|
16 |
% |
|
245,059 |
|
|
235,886 |
|
4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
NICKEL RECOVERY(5) (%) |
|
90 |
% |
|
86 |
% |
4 |
% |
|
86 |
% |
|
86 |
% |
– |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
SALES VOLUMES (tonnes) |
|
|
|
|
|
|
|
|
|
|||||||
|
Finished Nickel(6) |
|
4,169 |
|
|
4,177 |
|
– |
|
|
15,603 |
|
|
15,687 |
|
(1 |
%) |
|
Finished Cobalt |
|
474 |
|
|
443 |
|
7 |
% |
|
1,775 |
|
|
1,678 |
|
6 |
% |
|
Fertilizer |
|
51,748 |
|
|
48,542 |
|
7 |
% |
|
168,782 |
|
|
187,922 |
|
(10 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
AVERAGE-REFERENCE PRICE (USD) |
|
|
|
|
|
|
|
|
|
|
||||||
|
Nickel (US$ per pound) |
$ |
8.99 |
|
$ |
7.23 |
|
24 |
% |
$ |
8.39 |
|
$ |
6.25 |
|
34 |
% |
|
Cobalt (US$ per pound)(7) |
|
29.89 |
|
|
15.73 |
|
90 |
% |
|
24.34 |
|
|
15.58 |
|
56 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
AVERAGE-REALIZED PRICE (CAD)(3) |
|
|
|
|
|
|
|
|
|
|
||||||
|
Nickel ($ per pound) |
$ |
11.16 |
|
$ |
9.13 |
|
22 |
% |
$ |
10.30 |
|
$ |
8.16 |
|
26 |
% |
|
Cobalt ($ per pound) |
|
31.88 |
|
|
17.55 |
|
82 |
% |
|
25.88 |
|
|
17.84 |
|
45 |
% |
|
Fertilizer ($ per tonne) |
|
545.08 |
|
|
298.02 |
|
83 |
% |
|
438.75 |
|
|
343.45 |
|
28 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
UNIT OPERATING COST(3) (US$ per pound) |
|
|
|
|
|
|
|
|
|
|
||||||
|
Nickel – net direct cash cost |
$ |
3.60 |
|
$ |
4.47 |
|
(19 |
%) |
$ |
4.11 |
|
$ |
4.20 |
|
(2 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
SPENDING ON CAPITAL(3) |
|
|
|
|
|
|
|
|
|
|
||||||
|
Sustaining |
$ |
12.1 |
|
$ |
9.3 |
|
30 |
% |
$ |
37.7 |
|
$ |
32.2 |
|
17 |
% |
|
|
$ |
12.1 |
|
$ |
9.3 |
|
30 |
% |
$ |
37.7 |
|
$ |
32.2 |
|
17 |
% |
|
(1) |
Revenue and Cost of sales of Moa Joint Venture and Fort Site is composed of revenue/cost of sales, respectively, recognized by the Moa Joint Venture at Sherritt’s 50% share, which is equity-accounted and included in share of earnings (loss) of Moa Joint Venture, net of tax, and revenue/cost of sales recognized by Fort Site, which is included in consolidated revenue. For a breakdown of revenue between Moa Joint Venture and Fort Site see the Combined revenue section in the Non-GAAP and other financial measures section of this press release. |
|||
|
(2) |
Not meaningful (nm). |
|||
|
(3) |
Non-GAAP financial measures. For additional information see the Non-GAAP and other financial measures section of this press release. |
|||
|
(4) |
Excludes redirections of dividends from Sherritt’s joint venture partner. |
|||
|
(5) |
The nickel recovery rate measures the amount of finished nickel that is produced compared to the original nickel content of the ore that was mined. |
|||
|
(6) |
For the three months and year ended December 31, 2021, excludes 600 tonnes (50% basis) of finished nickel purchased from and sold to a third party as it was not internally produced. |
|||
|
(7) |
Average standard grade cobalt published price per Fastmarkets MB. |
Finished production at the Moa JV in the fourth quarter of 2021 resumed to levels consistent with historical performance following the completion of a 13-day full-facility shutdown and unplanned maintenance activities at the refinery, and efforts to mitigate the spread of COVID-19 in Fort Saskatchewan and in the Holguin province of Cuba through the successful rollout of vaccines and additional health and safety measures to protect employees, suppliers and various stakeholders in the third quarter of 2021. Improved results in Q4 relative to performance in Q3 2021 enabled the Moa JV to meet its targets for finished nickel and cobalt production and achieve unit costs that were below target for the year.
Mixed sulphides production at the Moa JV in Q4 2021 was 3,881 tonnes, down 12% from the 4,421 tonnes produced in Q4 2020.
Contacts
For further investor information contact:
Joe Racanelli, Director of Investor Relations
Telephone: (416) 935-2457
Toll-free: 1 (800) 704-6698
E-mail: investor@sherritt.com
Sherritt International Corporation
Bay Adelaide Centre, East Tower
22 Adelaide St. West, Suite 4220
Toronto, ON M5H 4E3
www.sherritt.com
