NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
TORONTO--(BUSINESS WIRE)--November 13, 2026--
Sherritt International Corporation ("Sherritt", the "Corporation") (TSX: S) today reported its financial results for the three and nine months ended September 30, 2026. All amounts are in Canadian dollars unless otherwise noted.
Summary of recent developments
On May 7, 2026, following the U.S. administration's issuance of Executive Order 14404 expanding sanctions against persons and companies conducting business in Cuba (the "Executive Order"), Sherritt suspended its direct participation in both its Moa and Energas joint venture activities in Cuba.
Mining and processing operations ceased at the end of Q2 2026 as a result of fuel supply disruptions in Cuba and the inability to procure other input commodities and supplies. Feed inventory at the refinery in Fort Saskatchewan, Alberta was depleted on June 22, 2026 and the production of finished nickel and cobalt stopped. The Corporation continued to produce fertilizers and sulphuric acid for sale at Fort Site and fertilizers at the Moa Joint Venture during the third quarter. The Corporation currently anticipates for the Fort Site to continue to produce ammonia fertilizer and sulphuric acid, but to stop production of ammonium sulphate fertilizers at Fort Site and the Moa Joint Venture during the fourth quarter.
Energas, which processes domestically sourced raw natural gas to generate electricity, was not affected by fuel supply constraints to Cuba and its operations continued during the third quarter of 2026.
On October 19, 2026, Sherritt received a specific license (the "Fuel License") from the United States Department of the Treasury's Office of Foreign Assets Control ("OFAC") authorizing the purchase and delivery of fuel, fuel oil, and sulphur to Sherritt's Moa Nickel mining and processing operations in Cuba ("Moa Nickel"), which form part of the Moa Joint Venture ("Moa JV"), as well as the procurement of related ancillary services. The Fuel License is the first of a series of anticipated OFAC emergency licenses that will be necessary for Sherritt to be able to restart mining and processing operations at Moa Nickel as well as further refining operations in Canada. There is no guarantee that OFAC will issue any further such anticipated licenses.
In early November 2026, the Corporation temporarily laid off approximately 280 employees, representing 47% of the Canadian workforce, for an approximate 90-day period beginning November 16, 2026 as part of ongoing measures to preserve liquidity.
"The third quarter reflected the full impact of the interruption to our mining and refining operations," said Dr. Peter Hancock, Interim President and Chief Executive Officer. "We stayed focused on safety and getting the most out of our fertilizer business, where our team successfully increased production and sales from last year. While we have recently made important regulatory progress with the receipt of our Fuel License from OFAC, we have also taken difficult but necessary measures, including temporary layoffs, to preserve liquidity and extend our financial runway as we pursue the additional regulatory approvals and financing required for a restart. These measures are intended to give Sherritt the flexibility needed to navigate this period and work toward restoring our role as a key critical minerals producer."
THIRD QUARTER 2026 SELECTED DEVELOPMENTS(1)
Operational performance
-- Finished nickel and cobalt sales were 160 tonnes and 4 tonnes,
respectively, (Sherritt's share(1)). There was no production of finished
nickel and cobalt during the quarter as the inventory of mixed sulphides
was depleted on June 22, 2026.
-- Fertilizer sales were 38,847 tonnes(1) as initiatives to maximize
fertilizer production were prioritized.
-- Electricity production was 169 GWh. Production was not affected by fuel
supply disruptions to Cuba as Energas processes domestically sourced raw
natural gas to generate electricity.
-- Electricity unit operating cost(2) was $14.43/MWh.
Financial performance
-- Net loss from continuing operations was $79.3 million, or $(0.11) per
share.
-- Adjusted net loss from continuing operations(2) was $50.9 million or
$(0.07) per share which primarily excludes a $26.8 million non-cash net
loss on revaluation of the GNC(3) receivable and Energas payable pursuant
to the Cobalt Swap agreement(4).
-- Adjusted EBITDA(2) was $(30.2) million.
-- Available liquidity in Canada as at September 30, 2026 was $42.4
million.
Organizational updates
-- In respect of the Corporation's Credit Facility:
-- As a result of the issuance of the Executive Order, a material
adverse change to the Corporation's business occurred which would
give the administrative agent (on behalf of the lenders) the
ability to call an event of default under the Credit Facility and
demand repayment of all indebtedness currently owing thereunder.
-- On September 30, 2026, the borrowing base of the Credit Facility
was $21.9 million, which was below the then aggregate borrowings
of $59.7 million including outstanding letters of credit,
resulting in a borrowing base deficiency of $37.8 million. The
lenders issued a notice of excess borrowing and required repayment
of the deficiency amount. The Corporation did not make the
required repayment and as a result, an event of default occurred,
for which the lenders have not issued a notice of acceleration of
the debt.
-- During the three months ended September 30, 2026, the
Corporation was not in compliance with the EBITDA-to-Interest
Expense and Senior Secured Net Debt-to-EBITDA covenants, as
defined in the Credit Facility agreement, which resulted in events
of default during the three months ended September 30, 2026, for
which the lenders have not issued notices of events of default.
-- The Corporation does not have the ability to make further draws
on the Credit Facility at this time.
-- Refer to the Capital resources section of the Corporation's
Management's Discussion and Analysis for the three and nine months
ended September 30, 2026 ("MD&A") for further details.
(1) References to operational and financial metrics in this press release,
unless otherwise indicated, are to "Sherritt's share" which is
consistent with the Corporation's definition of reportable segments for
financial statement purposes. Sherritt's share of "Metals" includes the
Corporation's 50% interest in the Moa Joint Venture ("Moa JV"), its 100%
interest in the utility and fertilizer operations in Fort Saskatchewan
("Fort Site") and its 100% interests in subsidiaries established to buy,
market and sell certain of the Moa JV's nickel and cobalt production and
the Corporation's cobalt inventory received under the Cobalt Swap
agreement ("Metals Marketing"). Sherritt's share of Power includes the
Corporation's 331/3% interest in Energas S.A. ("Energas"). References to
Corporate and Other and Oil and Gas includes the Corporation's 100%
interest in these businesses. Corporate and Other refers to the
Corporate head office and growth and market development support. Fort
Site refers to the Corporation's 100% interest in the utility and
fertilizer operations.
(2) Non-GAAP financial measures. For additional information see the Non-GAAP
and other financial measures section of this press release.
(3) General Nickel Company S.A. ("GNC").
(4) For additional information on the "Cobalt Swap", see Note 13 --
Advances, loans receivable and other financial assets of the
consolidated financial statements for the year ended December 31, 2025.
DEVELOPMENTS SUBSEQUENT TO THE QUARTER
-- In respect of the Corporation's Credit Facility:
-- The Corporation repaid $7.8 million on the Credit Facility.
-- As of November 13, 2026, the administrative agent under the
Credit Facility has not issued a notice of acceleration of the
debt. An acceleration of the indebtedness owing under the Credit
Facility and/or the expiry of the 30-day cure period in respect of
the October 30, 2026 missed interest payment on the Amended Senior
Secured Notes would permit the holders of at least 25% of the
outstanding principal amount of the Amended Senior Secured Notes
of the Corporation to also declare all of the Corporation's
Amended Senior Secured Notes to be due and payable. Enforcement
rights by the noteholders are subject to a 180-day standstill
period, as provided in the inter-creditor agreement, and further
subject to limitation if the Credit Facility lenders have already
commenced enforcement action against all or a material portion of
the collateral.
-- On October 19, 2026, the Corporation received the Fuel License from the
United States Department of the Treasury's OFAC authorizing the purchase
and delivery of fuel, fuel oil, and sulphur to Sherritt's Moa Nickel
mining and processing operations in Cuba, which form part of the Moa JV,
as well as the procurement of ancillary services. The Fuel License is the
first of a series of anticipated OFAC emergency licenses that will be
necessary for Sherritt to be able to restart mining and processing
operations at Moa Nickel as well as further refining operations in
Canada. The Fuel License authorizes the sale, transportation, export,
delivery and payment for fuel, fuel oil, and sulphur to Moa Nickel,
together with all related services. The authorization extends to the
Corporation's licensed fuel supplier and persons acting on their behalf
(including banks and vessel operators), as well as other necessary
insurance or ancillary service providers (the "Covered Participants").
In connection with the Fuel License, Sherritt entered into an interim
consent agreement dated as of September 23, 2026 (the "Agreement") with
Moa Bay Mining Co. ("Moa Bay"), the holder of a certified claim relating
to Moa Nickel under Title III of the Cuban Liberty and Democratic
Solidarity (LIBERTAD) Act of 1996 (the "Helms-Burton Act"). Under the
Agreement, Moa Bay consented to interim fuel shipments to Moa Nickel in
exchange for consent fees payable by or on behalf of Sherritt. As part of
the Agreement, Moa Bay also agreed not to bring any Helms-Burton Act
claims against the Covered Participants in connection with those
authorized shipments. Sherritt and Moa Bay also obtained, concurrently
with the Fuel License issued on October 19, 2026, separate OFAC
authorization required for performance under the Agreement in the form of
an additional OFAC license authorizing execution and performance of the
interim consent agreement. The actual restart of operations at Moa
Nickel remains subject to receipt of a second OFAC emergency license,
which the Corporation is working to obtain with the continued support of
and in close coordination with U.S. investment firm Gillon Capital, LLC
("Gillon Capital").
-- On October 30, 2026, the Corporation did not pay interest of $11.5
million on the Amended Senior Secured Notes that was due and payable.
Overdue interest bears interest at a rate of 9.25%. Under the terms of
the Amended Senior Secured Notes indenture, failure to make a scheduled
interest payment results in a continuing event of default if the interest
payment remains unpaid for 30 days after the due date. Upon the
occurrence of such an event of default, noteholders representing at least
25% of the outstanding principal amount of the Amended Senior Secured
Notes may direct the trustee to declare the notes immediately due and
payable or noteholders themselves may issue a notice to the Corporation.
In addition, the trustee may exercise enforcement rights, including
rights against pledged collateral. Enforcement rights by noteholders are
subject to a 180-day standstill period, as provided in the inter-creditor
agreement, and further subject to limitation if the Credit Facility
lenders have already commenced enforcement action against all or a
material portion of the collateral.
-- Following the cessation of mining and refining activities at the Moa JV
in late June 2026 as a result of the Executive Order, in early November
2026, the Corporation temporarily laid off approximately 280 employees,
representing 47% of the Canadian workforce, for an approximate 90-day
period beginning November 16, 2026 as part of ongoing measures to
preserve liquidity. Separately, the Corporation announced that its Chief
Human Resources Officer has departed Sherritt to pursue another
opportunity. To ensure continuity, Sherritt's Vice President, Human
Resources, who has been with the Corporation for 14 years, has assumed
oversight of the human resources function.
Q3 2026 FINANCIAL HIGHLIGHTS
For the nine months
For the three months ended ended
2026 2025 2026 2025
$ millions,
except per share September September September
amount September 30 30 Change 30 30 Change
----------------- ------------- ----------- -------- ----------- ----------- --------
Revenue $ 39.7 $ 39.7 - $ 133.0 $ 121.8 9%
Combined
revenue(1) 54.1 108.4 (50%) 292.8 369.7 (21%)
Loss from
operations and
joint venture (41.3) (12.6) (228%) (106.1) (63.8) (66%)
Net loss from
continuing
operations (79.3) (19.5) (307%) (159.6) (49.7) (221%)
Net loss for the
period (79.3) (19.5) (307%) (159.6) (49.9) (220%)
Adjusted
EBITDA(1) (30.2) 1.6 nm(2) (24.6) 8.6 (386%)
Adjusted loss
from continuing
operations(1) (50.9) (15.5) (228%) (87.6) (63.3) (38%)
Net loss earnings
from continuing
operations ($
per share) (0.11) (0.04) (175%) (0.25) (0.11) (127%)
Adjusted loss
from continuing
operations ($
per share)(1) (0.07) (0.03) (133%) (0.14) (0.14) -
Cash provided by
continuing
operations for
operating
activities (19.9) 2.5 nm(2) 5.9 9.1 (35%)
Combined free
cash flow(1) (16.2) (24.0) nm(2) 14.1 (27.8) 151%
Average exchange
rate (CAD/US$) 1.399 1.377 2% 1.385 1.399 (1%)
----------------- ----- ------ ---- ------ ------ ----
2026 2025
$ millions, as at September 30 December 31 Change
-------------------- -------------- ------------- --------
Cash and cash
equivalents
Canada $ 42.4 $ 13.4 216%
Cuba(3) 123.5 109.4 13%
Other 1.1 2.1 (48%)
------------------------- ---------- --------- ----
167.0 124.9 34%
Loans and borrowings 309.3 316.0 (2%)
------------------------- ---------- --------- ----
The Corporation's share
of cash and cash
equivalents in the Moa
Joint Venture, not
included in the above
balances: $ 6.8 $ 12.8 (47%)
------------------------ ---------- --------- ----
(1) Non-GAAP financial measures. For additional information see the Non-GAAP
and other financial measures section of this press release.
(2) Not Meaningful ("nm")
(3) As at September 30, 2026, $120.0 million of the Corporation's cash and
cash equivalents was held by Energas (December 31, 2025 - $103.3
million).
Cash and cash equivalents were $167.0 million as at September 30, 2026 compared to $203.8 million at June 30, 2026. As at September 30, 2026, total available liquidity in Canada was $42.4 million, composed of cash and cash equivalents in Canada. The Corporation did not have availability under its Credit Facility at the end of the quarter.
During the three and nine months ended September 30, 2026, the Corporation received $36.6 million and $165.3 million of cash receipts for nickel, cobalt and fertilizer sales and other working capital items from the Moa JV, respectively, in the Corporate and Other segment in response to the Executive Order and the Corporation's suspension of its direct participation in joint venture activities in Cuba effective May 7, 2026 which are being used to fund working capital. The cash receipts are recognized as accounts payable to the Moa JV and included in trade accounts payable and accrued liabilities and settled through the incurrence of costs by the Corporation on behalf of the Moa JV's Canadian operations. In addition, during the three months ended September 30, 2026, the Corporation repaid $16.6 million on the Credit Facility.
See the Capital resources and Liquidity sections of the MD&A for additional details on the Credit Facility and cash flows.
REVIEW OF OPERATIONS
Metals
For the three months
ended For the nine months ended
2026 2025 2026 2025
$ millions
(Sherritt's share),
except as otherwise September
noted September 30 30 Change September 30 September 30 Change
-------------------- ------------ ----------- -------- ------------ ------------ --------
FINANCIAL
HIGHLIGHTS(1)
Revenue $ 41.2 $ 94.1 (56%) $ 252.5 $ 332.5 (24%)
Cost of sales 84.3 106.8 (21%) 316.8 356.0 (11%)
Loss from operations (46.2) (14.4) (221%) (70.3) (30.4) (131%)
Adjusted EBITDA(2) (25.7) (1.5) nm(7) (19.7) 11.8 (267%)
CASH FLOW(1)
Cash (used) provided
by continuing
operations for
operating
activities(2) $ (32.5) $ (9.2) (253%) $ (60.4) $ 32.7 (285%)
Free cash flow(2) (33.4) (17.9) (87%) (68.5) (0.1) nm(7)
PRODUCTION VOLUMES
(tonnes)
Mixed sulphides
("MSP") 73 3,720 (98%) 2,818 10,115 (72%)
Finished nickel - 2,426 (100%) 3,204 8,804 (64%)
Finished cobalt - 228 (100%) 348 940 (63%)
Fertilizer 54,489 49,253 11% 163,837 170,280 (4%)
NICKEL RECOVERY(3)
(%) 0% 82% nm(7) 80% 83% (4%)
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