Sherritt Reports First Quarter 2024 Results; Solid Performance from Power; Metals Achieved Strong Nickel Sales Volume; Slurry
Sherritt International Corporation 1
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SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Sherritt Reports First Quarter 2024 Results; Solid Performance from
Power; Metals Achieved Strong Nickel Sales Volume; Slurry
Preparation Plant Operating at Design Capacity
TORONTO – May 8, 2024 – Sherritt International Corporation (“Sherritt”, the “Corporation”) (TSX: S), a world leader in using
hydrometallurgical processes to mine and refine nickel and cobalt – metals deemed critical for the energy transition , today
reported its financial results for the three months ended March 31, 2024. All amounts are in Canadian currency unless otherwise
noted.
Leon Binedell, President and CEO of Sherritt commented, “ The first quarter saw a continuation in depressed nickel market
conditions, however more recently, conditions gradually improved and we are pleased to see the market gaining traction. These
conditions contributed towards our success in reducing our opening nickel inventory with strong nickel sales. Our available
liquidity in Canada improved from the year end, reversing the negative trend from the second half of 2023 . We achieved this
despite our previously disclosed expectations that the first quarter would be our highest NDCC quarter in 2024. We saw improved
mining, processing and refining cost from the strong actions taken in response to market conditions including our restructuring
early in the year and increased production year over year and expect improved operating performance and lower NDCC over
the rest of the year in line with our guidance.”
Mr. Binedell continued, “Growing geopolitical competition over critical minerals has led to new sanctions being implemented on
Russian produced metals and potential trade measures in the nickel market being contemplated against China and Indonesia.
We are closely monitoring these developments and their implications for advancing the build -out of regionalized supply chains
and influencing future pricing.
Against this market backdrop, Sherritt is in a strong position with its technical expertise and innovative processing solutio ns
which are key differentiators and enablers towards our near -term strategic focus to expand midstream processing capacity of
critical minerals for the EV supply chain in North America. I am excited by the recent advancements our team has made on our
MHP midstream processing flowsheet, aimed to significantly reduce sodium sulphate effluent, a significant environmental
challenge for the industry, while still ensuring low GHG emissions and energy intensity. We believe this project is an important
step to help unlock the processing value chain for the North American EV sector while also providing a catalyst for future
domestic mine production. We look forward to accelerating this project throughout 2024, with near -term efforts focused on site
identification, customer and partnership arrangements, and further process development and project definition.”
FIRST QUARTER 2024 SELECTED DEVELOPMENTS
• Sherritt’s share(1) of finished nickel and cobalt production at the Moa Joint Venture (“Moa JV”) was 3,597 tonnes and
342 tonnes, respectively.
• Sherritt’s share of finished nickel and cobalt sales of 4,023 tonnes and 362 tonnes, respectively, exceeded production
volumes with strong spot sales driving progress on reducing nickel inventory.
• Net direct cash cost (“NDCC”)(2) was US$7.24/lb due to higher-cost opening inventory sold and lower cobalt and fertilizer
by-product credits. Importantly, mining, processing and refining (“MPR”) costs, the largest component of NDCC(2), improved
13% compared to Q1 2023.
o In March NDCC(2) improved to an average of US$6.82/lb and continues to trend lower.
o Higher year-over-year NDCC(2) was expected during the quarter and was factored into the Corporation’s 2024
outlook for NDCC(2) which Sherritt continues to expect will be within a range of US$5.50 to US$6.00/lb implying
a 20% decrease from 2023.
• Electricity production was 210 GWh benefitting from increased gas supply and equipment availability.
• Electricity unit operating cost(2) was $17.12/MWh benefitting from higher electricity production and sales volume.
• Net loss from continuing operations of $40.9 million, or $(0.10) per share was primarily due to lower average-realized
prices(2) for nickel, cobalt and fertilizers, partly offset by higher nickel sales volumes.
2024 First Quarter Report
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2 Sherritt International Corporation
• Adjusted net loss from continuing operations(2) was $24.6 million or $(0.06) per share, which excludes a non-cash
$9.1 million revaluation loss on the net receivable pursuant to the Cobalt Swap on updates to valuation assumptions and
$3.5 million of severance costs on the restructuring.
• Adjusted EBITDA(2) was $(6.5) million.
• Available liquidity in Canada as at March 31, 2024 was $67.9 million increasing from $63.0 million as at December 31, 2023.
• The Moa JV received a $20.0 million prepayment on a sales agreement for nickel deliveries in 2024.
• Continued implementation of an organization-wide restructuring and cost-cutting program to improve operational
performance and respond to market conditions resulting in a reduction to the Corporation’s Canadian operations headcount
by approximately 10% which is expected to result in annualized cost savings of $13.0 million.
• The overall timing and budget to reach targeted production remains unchanged for the Moa JV expansion. The Slurry
Preparation Plant (“SPP”) was commissioned and has been operating at design capacity since the end of January 2024,
and phase two is on schedule for an expected end of year 2024 completion with commissioning and ramp up in 2025.
• Advanced the mixed hydroxide precipitate (“MHP”) midstream processing flowsheet for production of nickel and cobalt
sulphate while also reducing sodium sulphate effluent which is a key environmental challenge for the industry. Project focus
in 2024 will be on site identification, customer and partnership arrangements, and further process development and project
definition.
• Sherritt appointed Louise Blais and Steven Goldman to the Board of Directors in accordance with its succession planning
with the retirements of Maryse Bélanger in March, and John Warwick, who will not seek reelection at the Corporation’s
annual meeting of shareholders in May.
(1) References to “Sherritt’s share” 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 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 33⅓% interest in Energas S.A. (“Energas”).
References to Technologies and Oil and Gas includes the Corporation’s 100% interest in these businesses. References to Fort Site directly is to the Corporation’s
interest in its 100% interest in the utility and fertilizer operations. For additional information on the Cobalt Swap, see Note 12 – Advances, loans receivable and other
financial assets of the consolidated financial statements for the year ended December 31, 2023.
(2) Non-GAAP financial measures. For additional information see the Non-GAAP and other financial measures section of this press release.
(3) Cobalt by-product credits include Sherritt’s share of cobalt revenue per pound of nickel sold only.
DEVELOPMENTS SUBSEQUENT TO THE QUARTER
Subsequent to the quarter end:
• Sherritt received an additional $10.0 million repayment from the Moa JV on the advances made for short-term working
capital purposes at the Moa JV.
• Sherritt’s syndicated revolving-term credit facility was amended to extend its maturity by one year from April 30, 2025
to April 30, 2026 and change the EBITDA-to-Interest Expense covenant as defined in the agreement. There were no
other significant changes to the terms, financial covenants or restrictions.
• Sherritt completed a 10% workforce reduction at its Corporate office. Annual cost savings from employee costs and
reductions to other Corporate office-related costs are expected to be $2.0 million per year. This follows the 10%
workforce reduction to the Corporation’s Canadian operations earlier this year and is in addition to the 10% workforce
reduction at Sherritt’s Corporate office in 2021. Sherritt’s cost-cutting measures demonstrate its ongoing commitment
to cost optimization, streamlining operations, enhancing efficiencies, improving profitability and liquidity while ensuring
proper resources for safe and effective operations and to advance future growth initiatives.
• Sherritt’s Board of Directors continuously engages with shareholders and following its latest engagement, the Board
has made the determination to accelerate its review of corporate costs and executive compensation which was planned
to be conducted this year. Executive compensation will be assessed relative to peers to ensure it is aligned with the
current size, scope and complexity of Sherritt as well as reviewed to ensure that it is strategic, fair, appropriate and
competitive, and aligns with shareholder experience which is consistent with its review in 2022. The Board will complete
this review by no later than September 30, 2024 and will report on the results of this review following its completion.
Sherritt International Corporation 3
Q1 2024 FINANCIAL HIGHLIGHTS
$ millions, except as otherwise noted, for the three months ended March 31 2024 2023 Change
Revenue $ 28.8 $ 58.6 (51%)
Combined revenue(1) 127.7 187.4 (32%)
(Loss) earnings from operations and joint venture (22.4) 21.6 (204%)
Net (loss) earnings from continuing operations (40.9) 13.6 (401%)
Net (loss) earnings (40.5) 13.3 (405%)
Adjusted EBITDA(1) (6.5) 41.2 (116%)
Adjusted net (loss) earnings from continuing operations(1) (24.6) 13.3 (285%)
Net (loss) earnings from continuing operations ($ per share) (basic and diluted) (0.10) 0.03 (433%)
Cash provided by continuing operations for operating activities 13.0 9.8 33%
Combined free cash flow(1) 15.8 35.7 (56%)
Average exchange rate (CAD/US$) 1.349 1.353 N/A
(1) Non-GAAP financial measures. For additional information see the Non-GAAP and other financial measures section of this press release.
2024 2023
$ millions, as at March 31 December 31 Change
Cash and cash equivalents
Canada $ 37.5 $ 21.5 74%
Cuba(1) 105.9 96.3 10%
Other 1.0 1.3 (23%)
144.4 119.1 21%
Loans and borrowings 371.3 355.6 4%
The Corporation's share of cash and cash equivalents in the Moa Joint Venture,
not included in the above balances: $ 11.2 $ 5.9 90%
(1) As at March 31, 2024, $103.1 million of the Corporation’s cash and cash equivalents was held by Energas (December 31, 2023 - $93.9 million).
Cash and cash equivalents as at March 31, 2024 were $144.4 million, increasing from $119.1 million as at December 31, 2023.
During Q1 2024, Sherritt received $11.3 million proceeds from operating activities from Fort Site including the impact of receipts
from strong fertilizer pre-sales and timing of working capital payments and drew an additional $11.0 million on its revolving credit
facility due to timing of receipts and disbursements. These amounts were offset primarily by payments of $3.7 million for property,
plant and equipment and $7.4 million on rehabilitation and closure costs related to legacy Oil and Gas Spain assets.
Sherritt also began receiving repayment of the advances made for short -term working capital purposes at the Moa JV with an
initial repayment of $3.0 million. Advances to the Moa JV under its credit facility with the Corporation are to the two non -Cuban
operating companies of the Moa JV, are interest bearing at the Corporation’s borrowing rates and are expected to be fully repaid
during the first half of 2024. Sherritt does not expect to advance further amounts to the Moa JV under its credit facility in 2024.
Upon repayment of the advances outstanding by the Moa JV, and subject to the Moa JV’s available liquidity to support operations
and expected liquidity requirements, the joint venture will be eligible to commence payment of cobalt dividends pursuant to t he
Cobalt Swap. At current spot nickel prices and given the prioritization of the joint venture to repay its outstanding advance s, as
previously disclosed, the Corporation expects that under the Cobalt Swap, the cobalt dividends are anticipated to commence in
the second half the year and will not meet the annual maximum amount in 2024. As defined by the agreement, any short fall in
the annual minimum payment amount will be added to the following year.
As at March 31, 2024, total available liquidity in Canada, which is composed of cash and cash equivalents in Canada and
available credit facilities of $30.4 million was $67.9 million increasing from $63.0 million as at December 31, 2023.
Subsequent to the quarter end:
• Sherritt received an additional $10.0 million repayment from the Moa JV on the advances made for short-term working
capital purposes at the Moa JV.
• Sherritt’s syndicated revolving-term credit facility was amended to extend its maturity by one year from April 30, 2025
to April 30, 2026 and change the EBITDA-to-Interest Expense covenant as defined in the agreement. The benchmark
rate will transition to the CORRA after cessation of the bankers’ acceptance benchmark rate. There were no other
significant changes to the terms, financial covenants or restrictions.
• Sherritt paid interest of $9.4 million on the Second Lien Notes and was not required to make any mandatory
redemptions.
2024 First Quarter Report
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4 Sherritt International Corporation
REVIEW OF OPERATIONS
Reportable segment update
As a result of the organization-wide restructuring in January 2024, the former Technologies reportable segment and Corporate
reportable segment were combined into a single Corporate and Other reportable segment, which includes the Corporation’s
management of its joint operations and subsidiaries and general corporate activities related to public companies, including
business and market development, growth and external technical services activities, as well as management of cash, publicly -
traded debt and government relations. Segmented information for the prior year was restated for comparative purposes to reflect
the new Corporate and Other reportable segment. In the current year period, expenses incurred to support and enhance Metals’
operations and busines s and market development, formerly reported within Technologies, are recognized within the Metals
reportable segment.
Metals
$ millions (Sherritt's share), except as otherwise noted, for the three months ended March 31 2024 2023 Change
FINANCIAL HIGHLIGHTS(1)
Revenue $ 115.1 $ 176.5 (35%)
Cost of sales 131.1 144.5 (9%)
(Loss) earnings from operations (21.0) 31.0 (168%)
Adjusted EBITDA(2) (7.5) 44.5 (117%)
CASH FLOW(1)
Cash provided by continuing operations for operating activities $ 31.2 $ 69.5 (55%)
Free cash flow(2) 21.7 59.9 (64%)
PRODUCTION VOLUMES (tonnes)
Mixed Sulphides 4,052 3,750 8%
Finished Nickel 3,597 3,483 3%
Finished Cobalt 342 367 (7%)
Fertilizers 57,064 57,991 (2%)
NICKEL RECOVERY(3) (%) 85% 88% (3%)
SALES VOLUMES (tonnes)
Finished Nickel 4,023 3,344 20%
Finished Cobalt 362 731 (50%)
Fertilizer 23,909 29,879 (20%)
AVERAGE-REFERENCE PRICES (US$ per pound)
Nickel(4) $ 7.52 $ 11.77 (36%)
Cobalt(4) 13.89 17.56 (21%)
AVERAGE REALIZED PRICE(2)
Nickel ($ per pound) $ 9.90 $ 16.47 (40%)
Cobalt ($ per pound) 14.51 19.11 (24%)
Fertilizer ($ per tonne) 412.05 566.93 (27%)
UNIT OPERATING COSTS(2) (US$ per pound)
Nickel - net direct cash cost $ 7.24 $ 6.46 12%
SPENDING ON CAPITAL(2)
Sustaining $ 7.4 $ 5.9 25%
Expansion 2.0 3.7 (46%)
9.4 9.6 (2%)
(1) The Financial Highlights, and cash flow amounts for Metals combine the operations of the Moa JV, Fort Site and Metals Marketing. Breakdowns of revenue,
Adjusted EBITDA, and the components of free cash flow (cash provided (used) by continuing operations for operating activities and Property, plant and equipment
expenditures) for each of these operations are included in the Combined Revenue, Adjusted EBITDA and Free cash flow reconciliations, respectively, in the Non-
GAAP and other financial measures section of this press release.
(2) Non-GAAP financial measures. For additional information see the Non-GAAP and other financial measures section of this press release.
(3) 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.
(4) Reference sources: Nickel – London Metal Exchange. Cobalt - Average standard-grade cobalt price published per Argus.
Sherritt International Corporation 5
Revenue
Metals revenue in Q1 2024 was $115.1 million compared to $176.5 million in Q1 2023. Revenue in the current year period was
lower primarily due to lower average-realized prices(1) for nickel, cobalt and fertilizer and the timing of receipts and sales of cobalt
by Sherritt under the Cobalt Swap agreement, partly offset by higher nickel sales volumes. In Q1 2024 the average-realized
prices(1) for nickel, cobalt and fertilizers were $9.90/lb, $14.51/lb and $412.05/tonne, 40%, 24% and 27% lower, respectively,
compared to the same period in the prior year.
Nickel revenue in Q1 2024 was $87.8 million compared to $121.4 million in Q1 2023. Finished nickel sales volumes in Q1 2024
were 20% higher than Q1 2023 and exceeded production volumes as Metals reduced its opening inventory with strong spot
sales.
Cobalt revenue in Q1 2024 was $11.6 million compared to $30.8 million in Q1 2023. Cobalt revenue on the Cobalt Swap sales
was $0.9 million in Q1 2024 compared to $29.8 million in Q1 2023. Higher Moa JV cobalt revenue of $10.7 million in Q1 2024
compared to $1.0 million in Q1 2023, partly offsetting the lower Cobalt Swap revenue.
Fertilizer revenue in Q1 2024 was $9.9 million compared to $16.9 million in Q1 2023. Fertilizer sales volume was 20% lower on
delayed demand ahead of the spring planting season.
Cobalt Swap sales
During Q1 2024, and for the remainder of 2024, Sherritt anticipates variances in cobalt sales volumes, revenue and cost of sales
as a result of the timing of receipts of cobalt and their subsequent sale by Sherritt under the Cobalt Swap agreement. In 2023,
Sherritt began receiving and selling 100% of the available cobalt in Q1 and received the annual maximum amount of cobalt
(2,082 tonnes) by the end of Q2. In the current year, Sherritt expects to begin receiving cobalt under the Cobalt Swap in the
second half of the year.
As a result, sales of cobalt will be recognized by the Moa JV at Sherritt’s 50% share until such time as Sherritt begins receiving
cobalt from the Cobalt Swap. While this will result in variances in cobalt sales volumes, revenue and cost of sales, it will not
have a material impact on earnings from operations, average-realized prices(1), cobalt by-product credits, or NDCC(1).
Production
Mixed sulphides production at the Moa JV in Q1 2024 was 4,052 tonnes, up 8% from the 3,750 tonnes produced in Q1 2023
benefitting from lower unplanned maintenance activities, improved ore blends and grades and additional processing capacity
and efficiencies resulting from the completion of the SPP.
Sherritt’s share of finished nickel and cobalt production in Q1 2024 was 3,597 tonnes and 342 tonnes, 3% higher and 7% lower,
respectively, than Q1 2023. Finished nickel production during the quarter increased due to higher nickel rich third-party feed
processed partly offset by weather-related shipping delays in delivering Moa mixed sulphides feed to the refinery and reduced
production rates to mitigate feed contaminants. Finished cobalt production was lower consistent with higher nickel-to-cobalt ratio
in available feed processed. The delayed shipment of mixed sulphides was received at the refinery in April.
Fertilizer production in Q1 2024 of 57,064 tonnes was 2% lower compared to Q1 2023.
NDCC(1)
NDCC(1) per pound of nickel sold was US$7.24/lb in Q1 2024 compared to US$6.46/lb in Q1 2023; however, NDCC(1) was 8%
lower than in Q4 2023 improving quarter over quarter. During Q1 2024, NDCC(1) was impacted by higher-cost opening inventory
sold in addition to lower cobalt and fertilizer by-product credits(2). NDCC(1) improved to average US$6.82/lb during the last month
of the quarter and continues to trend lower. Importantly, mining, processing and refining costs per pound of nickel sold (“MPR/lb”),
the largest cost component of NDCC(1), improved 13% from Q1 2023. Lower MPR/lb costs were primarily due to lower sulphur,
natural gas and diesel prices, lower maintenance costs and the impact of higher nickel sales volumes, partly offset by the higher
opening inventory costs. The Cobalt Swap did not have a significant impact on NDCC(1) in either of the comparative periods.
Higher year-over-year NDCC(1) was expected during the first quarter and factored into the Corporation’s 2024 outlook for
NDCC(1) which Sherritt continues to expect will be within a range of US$5.50 to US$6.00/lb implying a 20% decrease from 2023.
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6 Sherritt International Corporation
Spending on capital(1)
Sustaining spending on capital in Q1 2024 was $7.4 million, compared to $5.9 million in Q1 2023 with modestly higher spending
during the current year quarter.
Growth spending on capital in Q1 2024 was $2.0 million most of which was related to spending on the second phase of the Moa
JV expansion.
(1) Non-GAAP financial measures. For additional information see the Non-GAAP and other financial measures section of this press release.
(2) Cobalt by-product credits include Sherritt’s share of cobalt revenue per pound of nickel sold only.
Expansion program and strategic developments
Moa JV expansion program update
The first phase of the Moa JV expansion program, the SPP, was commissioned and has been operating at design capacity since
the end of January.
The second phase, the Processing Plant, is underway and
• civil construction and structural erection is nearing completion;
• piping installation will commence in the second quarter; and
• in response to lower nickel prices, the joint venture optimized the timing of certain capital spending items shifting some
phase two spending to beyond 2024. Deferring the ordering of equipment and materials for the Fifth Sulphide
Precipitation Train beyond 2024 is an additional opportunity that was identified during the quarter to optimize the timing
of near-term spending without any expected impact on the timing of the ramp up of mixed sulphide precipitate
production from the expansion.
The overall timing and budget to reach target production remains unchanged and is on schedule for an expected end of year
2024 completion with commissioning and ramp up in 2025. With completion of phase two of the expansion, annual mixed
sulphide precipitate production is expected to increase by approximately 20% of contained nickel and cobalt and is expected to
fill the refinery to nameplate capacity to maximize profitability from the joint venture’s own mine feed, displacing lower margin
third-party feeds and increasing overall finished nickel and cobalt production.
Strategic developments
Sherritt’s technical expertise and innovative processing solutions are key differentiators and enablers towards the Corporation’s
near-term strategic focus to expand midstream processing capacity of critical minerals for the electric vehicle supply chain in North
America.
During the quarter, Sherritt advanced its MHP midstream processing flowsheet for production of nickel and cobalt sulphate while
also reducing sodium sulphate effluent which is a key environmental challenge for the industry. Project focus in 2024 will be on
site identification, customer and partnership arrangements, and further process development and project definition.
Sherritt International Corporation 7
Power
$ millions (Sherritt Share, 33⅓% basis), except as otherwise noted, for the three months ended March 31 2024 2023 Change
FINANCIAL HIGHLIGHTS
Revenue $ 12.0 $ 10.3 17%
Cost of sales 4.0 3.4 18%
Earnings from operations 7.1 5.9 20%
Adjusted EBITDA(1) 7.6 6.4 19%
CASH FLOW
Cash provided by continuing operations for operating activities $ 9.7 $ 4.4 120%
Free cash flow(1) 7.1 3.7 92%
PRODUCTION AND SALES
Electricity (GWh(2)) 210 158 33%
AVERAGE-REALIZED PRICE(1)
Electricity (per MWh(2)) $ 51.25 $ 58.33 (12%)
UNIT OPERATING COST(1)
Electricity (per MWh) $ 17.12 $ 19.37 (12%)
SPENDING ON CAPITAL(1)
Sustaining $ 2.6 $ 0.7 271%
(1) Non-GAAP financial measures. For additional information see the Non-GAAP and other financial measures section of this press release.
(2) Gigawatt hours (“GWh”), Megawatt hours (“MWh”).
Revenue for Q1 2024 of $12.0 million was 17% higher than Q1 2023 primarily due to higher production resulting in higher sales
of 210 GWh compared to 158 GWh in the prior year period, partly offset by lower average-realized price(1). Higher production was
a result of higher gas availability as a result of the two wells that went into production at the end of the second quarter of 2023
and better equipment availability.
As a key partner in supporting the Cuban government's plans to increase power production, Sherritt continues to work with its
Cuban partners to drill additional wells which will increase gas supply for additional electricity production.
Unit operating costs(1) for the three months ended March 31, 2024 were $17.12/MWh, 12% lower than Q1 2023 primarily as a
result of higher electricity production and sales volume relative to maintenance costs during the periods.
Spending on capital(1) of $2.6 million in Q1 2024 was primarily driven by timing of maintenance activities at Varadero.
(1) Non-GAAP financial measures. For additional information see the Non-GAAP and other financial measures section of this press release.
OUTLOOK
2024 guidance for production volumes, unit operating costs and spending on capital remains unchanged.
CONFERENCE CALL AND WEBCAST
Sherritt will hold its conference call and webcast May 9, 2024 at 10:00 a.m. Eastern Time to review its first quarter 2024 results.
Dial-in and webcast details are as follows:
North American callers, please dial: 1 (800) 717-1738 Passcode: 00402
International callers, please dial: 1 (289) 514-5100 Passcode: 00402
Live webcast: www.sherritt.com
Please dial in 15 minutes before the start of the call to secure a line. Alternatively, listeners can access the conference call and
presentation via the webcast available on Sherritt’s website.
An archive of the webcast and replay of the conference call will also be available on the website.
2024 First Quarter Report
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8 Sherritt International Corporation
FINANCIAL STATEMENTS AND MANAGEMENT’S DISCUSSION AND ANALYSIS
Sherritt’s condensed consolidated financial statements and MD&A for the three months ended March 31, 2024 are available at
www.sherritt.com and should be read in conjunction with this news release. Financial and operating data can also be viewed in
the investor relations section of Sherritt’s website or on SEDAR+ at www.sedarplus.ca.
NON-GAAP AND OTHER FINANCIAL MEASURES
Management uses the following non-GAAP and other financial measures in this press release and other documents: combined
revenue, adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”), average-realized price,
unit operating cost/net direct cash cost (“NDCC”), adjusted net earnings/loss from continuing operations, adjusted net
earnings/loss from continuing operations per share, spending on capital, combined cash provided (used) by continuing
operations for operating activities and combined free cash flow.
Management uses these measures to monitor the financial performance of the Corporation and its operating divisions and
believes these measures enable investors and analysts to compare the Corporation’s financial performance with its competitors
and/or evaluate the results of its underlying business. These measures are intended to provide additional information, not to
replace International Financial Reporting Standards (“IFRS”) measures, and do not have a standard definition under IFRS and
should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. As
these measures do not have a standardized meaning, they may not be comparable to similar measures provided by other
companies.
The non-GAAP and other financial measures are reconciled to their most directly comparable IFRS measures in the Appendix
below.
ABOUT SHERRITT INTERNATIONAL CORPORATION
Sherritt is a world leader in using hydrometallurgical processes to mine and refine nickel and cobalt – metals deemed critical for
the energy transition. Sherritt’s Moa Joint Venture has a current estimated mine life of 25 years and has embarked on an
expansion program focused on increasing annual mixed sulphide precipitate production by approximately 20% of contained
nickel and cobalt. The Corporation’s Power division, through its ownership in Energas S.A., is the largest independent energy
producer in Cuba with installed electrical generating capacity of 506 MW, representing approximately 10% of the nationa l
electrical generating capacity in Cuba. The Energas facilities are comprised of two combined cycle plants that produce low-cost
electricity from one of the lowest carbon emitting sources of power in Cuba. Sherritt’s common shares are listed on the Toronto
Stock Exchange under the symbol “S”.