Sherritt Announces Amendment to its Transaction to Improve its Capital Structure relating to its Ambatovy Joint Venture Partner Loans

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES

OR FOR DISSEMINATION IN THE UNITED STATES

Sherritt Announces Amendment to its Transaction to Improve its

Capital Structure relating to its Ambatovy Joint Venture Partner Loans

TORONTO, July 17, 2020 – Sherritt International Corporation (“Sherritt” or the “Corporation”)

(TSX:S) announced today that it has amended certain terms of its previously announced

transaction to improve its capital structure described in the Corporation’s management

information circular dated March 6, 2020 (the “ Information Circular ”), together with certain

amendments to the transaction described in Sherritt’s news release s issued on June 10, 2020

and June 29, 2020 (collectively, the “Transaction”).

The amended terms announc ed today (the “ Amended CFA Terms”) are limited to matters

relating to the Corporation’s Ambatovy Joint Venture partners (the “CFA Lenders”) and provide

that all of Sherritt’s obligations under its Ambatovy Joint Venture partner loans outstanding

pursuant to subordinated carry finance agreements with the CFA Lenders (the “CFA Loans”) will

be exchanged for Sherritt’s interest in the Ambatovy Joint Venture (including its equity ownership

in, and the subordinated loan obligations owed from, the Ambatovy Joint V enture) (collectively,

the “Ambatovy Interests”), rather than providing each CFA Lender with the option to elect to

exchange its CFA Loans for either (i) its CFA Lender’s pro rata share of the Ambatovy Interests

or (ii) an amended CFA Loan with no recourse against Sherritt (as further described in the

Information Circular).

An amended version of the Corporation’s plan of arrangement (the “ Plan of Arrangement ”)

pursuant to which the Transaction is to be implemented in the Corporation’s proceedings under

the Canada Business Corporations Act (the “CBCA”) reflecting the Amended CFA Terms, as well

as a blackline of the amended Plan of Arrangement to the version filed by Sherritt on June 29,

2020, will be made available under Sherritt’s SEDAR profile at www.sedar.com and on Sherritt’s

website at www.sherritt.com.

Sherritt believes that the Transaction and the Amended CFA Terms are in the best interests of

the Corporation and its stakeholders considering all current circumstances. The Amended CFA

Terms do not impact the consideration being provided under the Plan of Arrangement to holders

of the Corporation’s outstanding (i) 8.00% senior unsecured debentures due 2021, (ii) 7.50%

senior unsecured debentures due 2023, and (iii) 7.875% senior unse cured notes due 2025 (the

“Noteholders”). Sherritt and its board of directors encourage all Noteholders and CFA Lenders

(collectively, the “Debtholders”) to vote in favour of the Plan of Arrangement to implement the

Transaction.

Additional Information

Additional information and materials in respect of the Transaction are available on Sherritt’s profile

on SEDAR (www.sedar.com) and Sherritt’s website under its “Balance Sheet Initiative – Details”

page ( https://www.sherritt.com/English/Investor-Relations/Balance-Sheet-Initiative-

Details/default.aspx).

Debtholders an d shareholders with questions may also contact Kingsdale Advisors, the

Corporation’s Proxy, Information and Exchange Agent, by telephone at 1-800-749-9197 or 416-

867-2272, or by email at [email protected].

This news release is not an offer of securities for sale in the United States. The securit ies to be

issued pursuant to the Transaction have not been and will not be registered under the U.S.

Securities Act of 1933 (the “ 1933 Act”), or the securities laws of any state of the United States,

and may not be offered or sold within the United States except pursuant to an exemption from the

registration requirements of the 1933 Act. The securities to be issued pursuant to the Transaction

will be issued and distributed in reliance on the exemption from registration set forth in Section

3(a)(10) of the 1933 Act (and similar exemptions under applicable state securities laws).

About Sherritt

Sherritt is a world leader in the mining and refining of nickel and cobalt from lateritic ores with

projects, operations and investments in Canada, Cuba and Madagascar. The Corporation is the

largest independent energy producer in Cuba, with extensive oil and power operations across the

island. Sherritt licenses its proprietary technologies and provides metallurgical services to mining

and refining operations worldwide. The Corporation’s common shares are listed on the Toronto

Stock Exchange under the symbol “S”.

For more information, please contact:

Joe Racanelli, Director of Investor Relations

Telephone: 416-935-2457

Email: [email protected]

www.sherritt.com

Forward-Looking Statements

This news release contains certain forward-looking statements. Forward-looking statements can

generally be identified by the use of statements that include such words as “believe”, “expect”,

“anticipate”, “intend”, “plan”, “forecast”, “likely”, “may”, “will”, “could”, “should”, “suspect”, “outlook”,

“projected”, “continue” or other similar words or phrases. Specifically, forward-looking statements

in this document include, but are not limited to, statements set out in this news release relating

to: the Amended CFA Terms and the filing of certain documents by Sherritt.

Forward-looking statements are not based on historic facts, but rather on curre nt expectations,

assumptions and projections about future events, including matters relating to the proposed

Transaction; commodity and product prices and demand; the level of liquidity; production results;

realized prices for production; earnings and reve nues; and certain objectives, goals and plans.

By their nature, forward looking statements require the Corporation to make assumptions and are

subject to inherent risks and uncertainties. There is significant risk that predictions, forecasts,

conclusions o r projections will not prove to be accurate, that those assumptions may not be

correct and that actual results or payments may differ materially from such predictions, forecasts,

conclusions or projections.

The Corporation cautions readers of this news release not to place undue reliance on any forward-

looking statement as a number of factors could cause actual future results, conditions, actions or

events to differ materially from the targets, expectations, estimates or intentions expressed in the

forward-looking statements. These risks, uncertainties and other factors include, but are not

limited to, risks associated with the ability of the Corporation to receive all necessary regulatory,

court, third party and stakeholder approvals in order to complete the Transaction; the ability of the

Corporation to achieve its financial goals; the ability of the Corporation to operate in the ordinary

course during the CBCA proceedings, including with respect to satisfying obligations to service

providers, suppliers, contractors and employees; the ability of the Corporation to continue as a

going concern; the ability of the Corporation to continue to realize its assets and discharge its

liabilities and commitments; the Corporation’s future liquidity position, and access to capital, to

fund ongoing operations and obligations (including debt obligations); the ability of the Corporation

to stabilize its business and financial condition; the ability of the Corporation to implement and

successfully achieve its business priori ties; the ability of the Corporation to comply with its

contractual obligations, including, without limitation, its obligations under debt arrangements; the

general regulatory environment in which the Corporation operates; the tax treatment of the

Corporation and the materiality of any legal and regulatory proceedings; the general economic,

financial, market and political conditions impacting the industry and markets in which the

Corporation operates; the ability of the Corporation to sustain or increase pr ofitability, fund its

operations with existing capital and/or raise additional capital to fund its operations; the ability of

the Corporation to generate sufficient cash flow from operations; the impact of competition; the

ability of the Corporation to obt ain and retain qualified staff, equipment and services in a timely

and efficient manner (particularly in light of the Corporation’s efforts to restructure its debt

obligations); the ability of the Corporation to retain members of the senior management team ,

including but not limited to, the officers of the Corporation; and the impact on business operations

of the Corporation resulting from the COVID-19 pandemic and the responses of government and

the public to the pandemic; matters relating to the meeting of Debtholders and the special meeting

of shareholders in connection with the Transaction , including attending such meetings and the

timing thereof ; and the implementation of the Transaction and timing thereof. Readers are

cautioned that the foregoing list of factors is not exhaustive and should be considered in

conjunction with the risk factors described in this news release and in the Corporation’s other

documents filed with the Canadian securities authorities, including without limitation the

Management’s Discussion and Analysis of the Corporation for the year ended December 31,

2019, the Management’s Discussion and Analysis of the Corporation for the three months ended

March 31, 2020, and the Annual Information Form of the Corporation dated March 19, 2020 for

the period ending December 31, 2019, which are available on SEDAR at www.sedar.com.

The Corporation may, from time to time, make oral forward-looking statements. The Corporation

advises that the above paragraph and the risk factors described in this news release and in the

Corporation’s other documents filed with the Canadian securities authorities should be read for a

description of certain factors that could cause the actual results of the Corporation to differ

materially from those in the oral forward-looking statements. The forward-looking information and

statements contained in this news release are made as of the date hereof and the Corporation

undertakes no obligation to update publicly or revise any oral or written forward -looking

information or statements, whether as a result of new information, future events or otherwise,

except as required by applicable securities laws. The forward-looking information and statements

contained herein are expressly qualified in their entirety by this cautionary statement.