Sherritt posts first losses from Cuba disruptions
Embattled nickel and cobalt refiner Sherritt International Corporation has started feeling the effects of US sanctions imposed on Cuba earlier this year and the company subsequently stopping mining and refining operations in both Cuba and Canada, having reported a net loss from continuing operations of C$71.1-million, or a loss per share of C$0.10 apiece, in the quarter ended June 30.
The company’s adjusted net loss from continuing operations was C$24.8-million, or -C$0.04, which primarily excludes the C$38.6-million loss from operations of Sherritt’s oil and gas division owing to a contractually obligated environmental rehabilitation cost update on legacy assets in Spain.
In terms of production, the company reported finished nickel and cobalt production from its Moa joint venture operation in Cuba of 1 319 t and 135 t, respectively. Finished nickel and cobalt sales were 1 720 t and 167 t in the second quarter, respectively.
Sherritt also sold 52 328 t of fertiliser in the reporting quarter as the company prioritised initiatives to maximise fertiliser production at the Fort Site plant despite lower metals production. The company produced 65 207 t of fertiliser in the second quarter last year and expects to conduct a planned acid plant maintenance shutdown at the fertiliser plant in the third quarter.
As a result of fuel supply disruptions in Cuba and challenges procuring other input commodities and supplies at the Moa mine site, only small quantities of mixed sulphides were produced during the second quarter. Sherritt posted mixed sulphide production of 934 t, compared to 3 238 t produced in the same quarter last year.
At the Alberta refinery, metals production was maintained at reduced rates during the quarter until June 22 when mixed sulphides inventory was depleted and metals refining activity stopped. Sherritt’s share of finished nickel and cobalt production was 1 319 t and 135 t, respectively, compared to attributable nickel and cobalt production of 3 431 t ad 389 t, respectively, in the same quarter last year.
The company had available liquidity of C$80-million in Canada at the end of June.
Sherritt interim president and CEO Peter Hancock says the second quarter was marked by significant challenges and disruption and, against this backdrop, the company focused on preserving liquidity, maintaining safety, maximising fertiliser production and advancing stakeholder engagement and strategic initiatives that are necessary to prepare for a restart of the company’s mining and refining operations – subject to US government approval.
“We continue to work with urgency and discipline to deliver a solution that supports the long-term stability and viability of our business,” Hancock affirms.