Sherritt Announces Q1 2016 Results

April 26, 2016

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TORONTO, ON–(Marketwired – April 26, 2016) –


Sherritt International Corporation (“Sherritt” or the “Corporation”) (TSX: S), the world leader in the mining and refining of nickel from lateritic ores, today reported its financial results for the three months ended March 31, 2016.

“Our focus remains steadfast on maintaining liquidity and enforcing strict cost discipline and smart capital allocation across our business,” said David Pathe, President and CEO, Sherritt International. “Consistent with that focus, we continue to decline to fund Ambatovy under the current capital structure. Liquidity at the end of the quarter remained strong after credit facility debt repayment of $45 million.”


  • Nickel and oil prices made new multi-year lows in the quarter, although prices for both commodities rallied somewhat in April, with WTI crude trading in a volatile fashion. The nickel price rally has been more cautious, with recent US$4/lb nickel up roughly 15% from the low in Feburary. Strong cobalt and fertilizer production provided some support to mitigate the first quarter impact of the lower nickel production and lower nickel and oil average realized prices.
  • Net direct cash costs of US$4.41/lb at Ambatovy and US$3.34/lb at the Moa JV remain well below the 50th percentile of C1 costs tracked by Wood Mackenzie, and on average are down 24% from the year ago quarter.
  • Finished nickel production was down 4% from the year ago quarter, as Ambatovy’s process plant experienced a number of unrelated reliability issues that increased downtime. Although this affected first quarter production by approximately 1,000 tonnes (100% basis), replacement components have been installed or other mitigation has occurred. Production guidance for Ambatovy remains at 48,000 – 50,000 tonnes finished nickel (100% basis).
  • Cash, cash equivalents and short-term investments ended the first quarter at $370 million, after repaying and terminating the $35 million line of credit and making a $10 million repayment on the revolving term credit facility.


  • Production guidance remains unchanged for all operations.
  • Capital spending guidance has been reduced by US$9 million, attributable to lower spending in Oil & Gas as only one well will be drilled in Block 10 this year.

All amounts are Canadian dollars unless otherwise indicated.
(1) For additional information see the Non-GAAP measures section of this press release.

$ millions, except as otherwise noted, for the three months ended March 31       2016   2015   Change
Combined Revenue(1)       191.3   278.3   (31%)
Adjusted EBITDA(1)       (9.1)   44.2   (121%)
Combined Free Cash Flow (1)       (31.4)   11.2   (380%)
Net (loss) earnings from continuing operations per share       (0.16)   (0.19)   16%
Combined Adjusted continuing operating cash flow per share ($ per share)(1)       (0.08)   0.19   (142%)
  (1) For additional information, see the Non-GAAP measures section of this release.                
        2016   2015    
$ millions, except as noted, as at       March 31   December 31   Change
Cash, cash equivalents and short term investments       369.9   435.4   (15%)
Total loans and borrowings       2,128.1   2,263.1   (6%)
Adjusted earnings (loss) from continuing operations (1)         
For the three months ended March 31       2016       2015
    $ millions   $/share   $ millions   $/share
Net (loss) from continuing operations   (47.8)   (0.16)   (56.8)   (0.19)
Adjusting Items, net of tax   (79.1)   (0.27)   (14.2)   (0.05)
Adjusted net (loss) from continuing operations   (126.9)   (0.43)   (71.0)   (0.24)
  (1) For additional information, see the Non-GAAP measures section of this release.                

During the first quarter, $(79.1) million $(0.27) per share in adjusting items occurred, primarily an unrealized foreign exchange gain of $76 million, as the Canadian dollar strengthened by approximately 10 cents from period end December 31, 2015 to period end March 31, 2016.



$ millions except as otherwise noted, for the three months ended March 31       2016               2015    
    Moa JV and   Ambatovy           Moa JV and   Ambatov            
    Fort Site (1)   JV   Other (2)   Total   Fort Site(1)   JV   Other(2)   Total   Change
    (50%)   (40%)           (50%)   (40%)            
FINANCIAL HIGHLIGHTS                                                                  
Revenue   $ 76.7     $ 65.1     $ 11.2   $ 153.0     $ 104.5     $ 100.7     $ 18.5     $ 223.7   (32 %)
Adjusted EBITDA(3)     (0.2 )     (12.8 )     0.3     (12.7 )     18.3       4.3       0.1       22.7   (156 %)
Cash provided (used) by operations     (3.0 )     (5.5 )     4.2     (4.3 )     30.2       12.6       (0.5 )     42.3   (110 %)
Spending on Capital(4)     7.8       1.7           9.5       8.1       6.4             14.5   (34 %)
Free cash flow(3)     (10.6 )     (5.5 )     4.2     (11.9 )     22.4       9.9       (0.5 )     31.8   (137 %)
PRODUCTION VOLUMES (tonnes)                                                                  
Mixed Sulphides     4,321       4,571           8,892       4,876       5,522             10,398   (14 %)
Finished Nickel     4,242       4,442           8,684       4,357       4,656             9,013   (4 %)
Finished Cobalt     499       365           864       426       344             770   12 %
Fertilizer     70,907       14,355           85,262       60,529       11,662             72,191   18 %
NICKEL RECOVERY (%)     88 %     87 %                   88 %     85 %                    
SALES VOLUMES (tonnes)                                                                  
Finished Nickel     4,141       4,491           8,632       4,275       4,944             9,219   (6 %)
Finished Cobalt     468       332           800       409       342             751   7 %
Fertilizer     31,713       14,107           45,820       30,842       13,127             43,969   4 %
AVERAGE REFERENCE PRICES (US$ per pound)(3)                                                            
Nickel                         $ 3.86                             $ 6.50   (41 %)
Cobalt                           10.70                               13.73   (22 %)
AVERAGE-REALIZED PRICES (3)                                                                  
Nickel ($ per pound)   $ 5.17     $ 5.15           $ 5.16     $ 7.91     $ 7.95             $ 7.93   (35 %)
Cobalt ($ per pound)     13.84       15.39             14.52       16.23       14.42               15.41   (6 %)
Fertilizer ($ per tonne)     391       186             327       375       190               318   3 %
UNIT OPERATING COSTS (3) (US$ per pound)                                                            
Nickel – net direct cash cost   $ 3.34     $ 4.41             3.90     $ 4.36     $ 5.74               5.10   (24 %)
(1)   Includes results for certain 100% owned assets at Fort Saskatchewan plant.
(2)   Includes results for Sherritt’s marketing organization for certain Ambatovy sales.
(3)   For additional information, see the Non-GAAP measures section of this release.
(4)   Spending on capital includes accruals.


Although nickel prices continued their decline to lows not experienced in the past decade, Sherritt customer demand has been firm with demand from China climbing. Nickel sales into China increased over the prior year period at both the Moa JV and the Ambatovy JV, which is consistent with an overall increase reported in Chinese nickel imports. Importantly, the largest increase has been in non-LME deliverable metal, which indicates demand from end users rather than metal traders who tend to prefer LME-deliverable material. The increase experienced by Sherritt in Chinese demand is linked to declining availability of NPI and stainless steel scrap. Recent Chinese NPI production estimates for 2016 have pointed to approximately 300,000 tonnes compared to levels of approximately 350,000 – 375,000 tonnes in 2015.

Cobalt demand and pricing have been rising slowly, as cobalt supply suffers when nickel and copper production are cut back, and we are beginning to see evidence of supply cuts in these commodities. Cobalt is a smaller market, with most production occurring as by-products of copper or nickel production. Demand growth has come from battery manufacturers shifting from small consumer batteries (laptops, cell phones, etc.) to larger storage applications such as automotive, power tools and industrial/household storage. Sherritt’s high grade cobalt remains well positioned to meet the demand for these applications as it is approved by the majority of major rechargeable battery manufacturers and recognized for its high purity.

Moa Joint Venture (50% interest) and Fort Site (100%)

Adjusted EBITDA of $(0.2) million in the quarter declined to levels that have not been seen since the first quarter of 2009, as nickel prices continued their downward trend.

Finished nickel production of 4,242 tonnes (50% basis) in the first quarter of 2016 was down marginally from the comparable quarter in 2015, although above planned levels. Mixed sulphide production was down 11%, which could have an impact on finished nickel production in the second quarter. Heavy rainfall in the first quarter limited access to planned mining faces, which impacted ore grade and was the primary cause for the lower production of mixed sulphides in the quarter. Refinery production remained relatively strong despite the limited mixed sulphide availability because of third party feed usage and a drawdown of mixed sulphides inventory.

Finished cobalt production of 499 tonnes (50% basis) in the first quarter was up 17% from last year’s comparable quarter, reflecting stable plant operation.

The nickel recovery was 88% in the first quarter of 2016, consistent with the first quarter of last year.

The NDCC of US$3.34 per pound of nickel in the first quarter of 2016 was a significant improvement over last year’s comparable quarter, and reflects mainly lower mining, processing and refining costs (driven by lower fuel oil, sulphuric acid and sulphur prices) and a higher fertilizer credit. In addition, the weaker Canadian dollar had a positive impact on refining costs, as the Fort Saskatchewan refinery costs are Canadian dollar denominated.

Continuing cost discipline is evident, as the first quarter 2016 NDCC is comparable to the fourth quarter 2015 NDCC of US$2.90 per pound when seasonal fertilizer sales are taken into account.

Capital spending of $7.8 million in the quarter is similar to its comparable quarter last year, with most of the capital spending this quarter related to the acid plant construction. The expansion capital of $4 million (US$3 million) refers to the 50% share of the acid plant, which has a total construction and commissioning budget of US$67 million (100% basis). On a 100% basis, counting the US$6 million spent in the first quarter of 2016 plus expenditures incurred in 2014 and 2015, approximately US$47 million has been spent on the acid plant. Acid plant construction progress is greater than 95% complete and pre-commissioning activities have been initiated with full operation expected in the third quarter of 2016.

Ambatovy Joint Venture (40% interest)

Adjusted EBITDA in the first quarter of 2016 was $(12.8) million compared to Adjusted EBITDA of $4.3 million in the same quarter last year. While lower nickel prices were the main factor affecting Ambatovy’s results, the quarter’s finished nickel production of 4,442 tonnes (40% basis) was also lower than expected. Ambatovy continued to improve in safety performance, and met expectations for ore grade and throughput rate, process control and stability, and product quality. However, the process plant experienced a number of unrelated reliability issues on equipment in the HPAL plant that resulted in lower nickel production. These issues are well understood, and Sherritt is addressing the challenge through both progressive replacement of problematic equipment and the implementation of a comprehensive asset management program. The impacts in the first quarter have not required any change to production or capital spending guidance, as they have been largely addressed during the quarter, with additional improvements to be implemented over the next one or two months.

First quarter finished cobalt production of 365 tonnes was also impacted by the unplanned downtime events, although cobalt revenue benefited from timing of sales as the average reference price of cobalt was approximately 6% higher in the fourth quarter of 2015.

Port operations at Ambatovy were interrupted for 21 days during the quarter while Sherritt confirmed Ambatovy’s status regarding the Government of Madagascar’s imposition of a new security-related protocol, the Advance Cargo Declaration, on all port users. This matter was resolved with no material financial impact and no impact to production.

Despite the lower first quarter production results, the trend in NDCC continues to be positive, as NDCC of US$4.41/lb is only 8% higher than the fourth quarter 2015 record low NDCC of US$4.07/lb, with finished nickel production down 9% in the same comparison period. First quarter 2016 NDCC was down 23% over its comparable quarter last year (NDCC of US$5.74/lb) on similar production levels.

Ambatovy Funding

As Sherritt announced in its fourth quarter and 2015 year end results disclosure, Ambatovy cash calls due in January this year amounted to US$50 million, with funding of US$30 million provided by partners Sumitomo Corp. and Korea Resources Corp. (KORES). Total cash funding provided by Sumitomo and KORES has increased to US$51 million, pursuant to additional cash calls of US$35 million. By agreement amongst the partners, Sherritt’s unfunded amounts remain payable with accrued interest. These amounts will be subtracted from future Ambatovy Joint Venture distributions, or may be set off against other amounts owed to Sherritt. Sherritt also has the option to pay the amounts in cash at any time, at Sherritt’s election. Until the funding deficit is addressed, and subject to continued discussions with the Ambatovy partners, Sherritt will not exercise its Ambatovy voting rights.

Sherritt continues not to fund further cash calls at this time due to the structure of the Ambatovy partner loans, which, at current nickel prices, effectively reduce Sherritt’s 40% interest in Ambatovy to a 12% economic interest (1). Sherritt continues to serve as operator, as constructive discussions are ongoing between partners and senior lenders regarding future funding of Ambatovy and modifications to the principal amortization on the existing senior loan.

(1)   70% of Sherritt’s distributable cash flow from Ambatovy (after opex, capex and project debt service) goes to Partner Loan repayment, leaving Sherritt with 30%; 30% of Sherritt’s 40% ownership = 12%.
OIL AND GAS                  
    2016     2015        
$ millions, except as otherwise noted, for the three months ended   March 31     March 31     Change  
Financial Highlights                      
Revenue   $ 22.4     $ 42.3     (47 %)
Adjusted EBITDA(1)     4.0       21.5     (81 %)
Cash provided by operations     2.6       6.6     (61 %)
Spending on Capital(2)     4.7       27.0     (83 %)
Free cash flow(1)     (2.4 )     (14.0 )   83 %
Production and sales (boepd)                      
Gross working-interest (GWI) – Cuba     16,449       19,719     (17 %)
Total net working-interest (NWI)     10,504       10,938     (4 %)
Average reference price (US$ per barrel)                      
Gulf Coast Fuel Oil No. 6   $ 21.13     $ 44.32     (52 %)
Brent     33.64       53.88     (38 %)
Average-realized price (1) (NWI)                      
Cuba ($ per barrel)     21.80     $ 41.44     (47 %)
Unit operating costs (1)(3) (GWI)                      
Cuba ($ per barrel)     9.53     $ 8.26     15 %
(1)   For additional information, see the Non-GAAP measures section of this release.
(2)   Spending on capital includes accruals.
(3)   Average unit operating costs are calculated by dividing operating costs incurred by gross working-interest production.

Adjusted EBITDA in the first quarter of $4.0 million remained positive, although reference prices declined further from the lows of the fourth quarter 2015. In the first quarter this year, WTI prices averaged US$33.40/barrel, down 21% from fourth quarter 2015 levels, and down 31% from their average in the first quarter last year. Gulf Fuel Oil 6, the relevant benchmark for Sherritt’s Cuban oil production, experienced a larger decline, where prices fell 29% from fourth quarter 2015 levels and 52% from the first quarter 2015. In the first quarter this year, Gulf Fuel Oil 6 averaged only 63% of WTI, compared to 92% in the first quarter of 2015.

Unit operating costs are higher on the lower production base and a lower Canadian dollar, but are lower than fourth quarter 2015 unit operating costs, and will fluctuate during the year, with the amount of workover activity and changes in the exchange rate.

First quarter GWI oil production in Cuba was as expected, down from the same quarter last year, consistent with the natural reservoir declines in our existing Production Sharing Contract (PSC) wells. Net working-interest (NWI) oil production in Cuba of 9,890 bopd, however, is down only slightly from its levels in the first quarter and the fourth quarter last year. This trend follows the pattern established last year with falling oil prices, where cost recovery oil increased because of lower oil prices.

Quarterly free cash flow of $(2.4) million is an improvement over the year ago quarter, when capex was higher. Capital spending in the first quarter of $4.7 million related mainly to drilling rig maintenance, well workovers and equipment purchases. Drilling activity in 2016 will be focused on the preparation and drilling of Block 10, as previously announced. Drilling the first well has shifted to the second half of the year, and with this timing, only one well will be drilled in 2016 (compared to the two originally planned). This is the main reason for the current capital expenditures guidance being revised to US$34 million from previous guidance of US$43 million. Results of the first well are to be evaluated in the fourth quarter.

Block 10 is one of two new PSC’s which Sherritt signed in 2014 with the Cuban agency, covering 261 square kilometres for a 25-year term. Sherritt originally held Block 10 in the Bay of Cardenas, and drilled one well in June 1994. The well was drilled using an offshore drilling rig, and was tested at 3,750 barrels of oil per day. Since then, significant advances in horizontal drilling technology have made drilling the prospect from an onshore location viable.

    2016   2015      
$ millions (33⅓% basis), except as otherwise noted, for the three months ended   March 31   March 31   Change  
Financial Highlights                  
Revenue   $ 15.6   $ 11.8   32 %
Adjusted EBITDA(1)     8.7     7.3   19 %
Cash provided by operations     0.9     24.1   (96 %)
Spending on Capital(2)     2.0     0.4   400 %
Free cash flow(1)     0.8     23.7   (97 %)
Production and sales                  
Electricity (GWh)     217     210   3 %
Average-realized price (1)                  
Electricity ($/MWh)   $ 58.27   $ 52.63   11 %
Total unit operating costs (1)                  
Electricity ($/MWh)     16.86     15.64   8 %
Net capacity factor (%)     67     66   2 %
(1)   For additional information see the Non-GAAP measures section of this release.
(2)   Includes service concession arrangements and accruals.

Quarterly Adjusted EBITDA of $8.7 million is up over its comparable quarter last year, mainly due to a higher average realized price from the weaker Canadian dollar. Production was higher than its year ago period, although down from quarterly production in fourth quarter 2015 due to slightly less gas being available for power generation.

The increase in operating costs on a year over year basis reflects mainly the weaker Canadian dollar; however, the first quarter of 2016 unit operating costs have reverted back to more normal ranges following the anomaly that existed in the fourth quarter of 2015 when a number of large maintenance activities occurred which had a disproportionate impact on the quarterly results.

Free cash flow generation of $0.8 million in the quarter is low compared to each of the four quarters last year. The power segment benefited in each of the four quarters of last year from principal repayments and interest payments received on the Energas conditional sales agreement ($71.6 million received for 2015). Due to higher capital spending and the current payment schedule, the repayment under the conditional sales agreement for 2016 is estimated at $34 million.


The table below lists Sherritt’s strategic priorities for 2016. The 2016 Strategic Priorities reflect the continuing depressed commodity outlook and the Corporation’s responsibility to preserve liquidity, continue to drive down costs, and execute rational capital allocation plans. Sherritt’s purpose, originally communicated in 2014, continues to be a low-cost nickel producer that creates sustainable prosperity for our employees, investors and communities.

Strategic Priorities   2016 Targets   Status
1 UPHOLD GLOBAL OPERATIONAL LEADERSHIP IN FINISHED NICKEL LATERITE PRODUCTION   Complete and commission the acid plant at Moa in the second half of 2016   Acid plant on track to complete in Q2 with full operation in Q3 this year
    Further reduce NDCC costs at Moa and Ambatovy towards the goal of being in the lowest quartile   Q1 NDCC of US$3.90/lb (avg between both operations) was down 24% over Q1 2015
    Increase Ambatovy production over 2015, despite the major maintenance work scheduled for Q3   Ambatovy production was lower in the first quarter, but expected to recover in the second quarter with no change to guidance
    Maintain peer leading performance in environmental, health, safety and sustainability   Performance on track
2 EXTEND THE LIFE OF OUR CUBAN ENERGY BUSINESS   Allocate capital to new drilling on Block 10, with future drilling to be contingent on results from 2016 activity   Capital allocation has been reduced in Q1, as drilling is expected to take place in the second half. Results from the first well will dictate next steps
3 PRESERVE LIQUIDITY AND BUILD BALANCE SHEET STRENGTH   Protect Sherritt’s balance sheet and preserve cash   Cash position declined by approximately $66 million since year end, with $45 million being repayment of credit facilities
    Establish clarity on long-term funding of Ambatovy    
    Run business units to be free cash flow neutral, and continue to optimize administrative costs   Ceased funding Ambatovy cash calls due to the “40 for 12” issue



In 2016, Sherritt has made certain modifications to how guidance is presented. For example, capital spending estimates are presented in US dollars. In the quarterly reporting, actual capital spending is presented in Canadian dollars consistent with Sherritt’s reporting currency, but estimates and forward looking information continue to be provided in US dollars. This change in presentation is intended to align with Sherritt’s capital budgeting practices, and to mitigate the change to capital spending that arises from translation to the Canadian dollar reporting currency. In Sherritt’s full year and Q4 2015 reporting, when guidance was first presented, the forecast exchange rate was Cdn$1.36 per U.S. dollar. Capital projects in the Metals business are generally US dollar expenditures, while in Oil & Gas, the expenditures are roughly 50% Canadian dollar denominated and 50% U.S. dollar denominated.

    Guidance at   Actual   Revised Projected
    2015   2016   2016
Production volumes and spending on capital   December 31   March 31    
Production volumes            
Nickel, finished (tonnes, 100% basis)            
  Moa Joint Venture   33,500-34,500   8,484   No change
  Ambatovy Joint Venture   48,000-50,000   11,105   No change
  Total   81,500-84,500   19,589   No change
Cobalt, finished (tonnes, 100% basis)            
  Moa Joint Venture   3,300-3,800   998   No change
  Ambatovy Joint Venture   3,300-3,800   913   No change
  Total   6,600-7,600   1,911   No change
Oil – Cuba (gross working-interest, bopd)   14,500   16,449   No change
Oil and Gas – All operations (net working-interest, boepd)   8,900   10,504   No change
Electricity (GWh, 100% basis)   860   217   No change
Spending on capital (US$ millions)            
Metals – Moa Joint Venture (50% basis), Fort Site (100% basis)   US$38   US$6   No change
Metals – Ambatovy Joint Venture (40% basis)   US$25   US$1   No change
Oil and Gas   US$43   US$3   US$34
Power (33⅓% basis) Pipeline Construction on Service Concession Agreements   US$4   US$2   No change
Power (33⅓% basis)   US$1     No change
Spending on capital (excluding Corporate)   US$111   US$12   US$102


The Corporation uses combined results, Adjusted EBITDA, average-realized price, unit operating cost, and adjusted operating cash flow to monitor the 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 evaluate the results of its underlying business. These measures 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. See Sherritt’s Management’s Discussion and Analysis for the period ended March 31, 2016 for further information.


Sherritt will hold its quarterly conference call and webcast tomorrow at 10:00 a.m. Eastern Time.

Conference Call and Webcast: April 27, 2016, 10:00 a.m. ET
North American callers, please 1-866-530-1553
International callers, please dial: 416-847-6330
Live webcast:

An archive of the webcast will also be available on the website. The conference call will be available for replay until May 2, 2016 by calling 647-436-0148 or 1-888-203-1112, access code 3281643#.


Sherritt’s complete interim condensed consolidated financial statements and MD&A for the three months ended March 31, 2016 are available at and should be read in conjunction with this news release.


Sherritt is the world leader in the mining and refining of nickel from lateritic ores with operations in Canada, Cuba, and Madagascar. The Corporation is the largest independent energy producer in Cuba, with extensive oil and power operations on the island. Sherritt licenses its proprietary technologies and provides metallurgical services to commercial metals operations worldwide. The Corporation’s common shares are listed on the Toronto Stock Exchange under the symbol “S”.

Source: Sherritt Investor Relations


This press 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 the “Outlook” sections of this press release and certain expectations about capital costs and expenditures; capital project completion dates; production volumes; and amounts of certain joint venture commitments.

Forward-looking statements are not based on historic facts, but rather on current expectations, assumptions and projections about future events, including commodity and product prices and demand; share price volatility realized prices for production; earnings and revenues; development and exploratory wells and enhanced oil recovery in Cuba; environmental rehabilitation provisions; availability of regulatory approvals; compliance with applicable environmental laws and regulations; the impact of regulations related to greenhouse gas emissions and credits; debt repayments; collection of accounts receivable; and certain corporate objectives, goals and plans for 2016. 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 or projections will not prove to be accurate, that those assumptions may not be correct and that actual results may differ materially from such predictions, forecasts, conclusions or projections.

The Corporation cautions readers of this press 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. This risks, uncertainties and other factors include, but are not limited to changes in the global price for nickel, cobalt, oil and gas or certain other commodities, share-price volatility, level of liquidity and access to capital resources, access to financing, risk of future non – compliance with debt restrictions and covenant, risks associated with the Corporation’s joint venture partners; discrepancies between actual and estimated production; variability in production at Sherritt’s operations in Madagascar and Cuba; risks associated with the completion of capital projects; potential interruptions in transportation; uncertainty of gas supply for electrical generation; uncertainty of exploration results and Sherritt’s ability to replace depleted mineral and oil and gas reserves; the Corporation’s reliance on key personnel and skilled workers; the possibility of equipment and other failures; the potential for shortages of equipment and supplies; risks associated with mining, processing and refining activities; uncertainty of resources and reserve estimates; uncertainties in environmental rehabilitation provisions estimates; risks related to the Corporation’s corporate structure; political, economic and other risks of foreign operations; risks related to Sherritt’s operations in Madagascar and Cuba; risks related to the U.S. government policy toward Cuba, including the U.S. embargo on Cuba and the Helms-Burton legislation; risks related to the accuracy of capital and operating cost estimates; reliance on significant customers; foreign exchange and pricing risks; compliance with applicable environment, health and safety legislation and other associated matters; risks associated with governmental regulations regarding greenhouse gas emissions; maintaining the

Corporation’s social license to grow and operate; risks relating to community relations; credit risks; shortage of equipment and supplies; competition in product markets; future market access; interest rate changes; risks in obtaining insurance; uncertainties in labour relations; uncertainty in the ability of the Corporation to enforce legal rights in foreign jurisdictions; uncertainty regarding the interpretation and/or application of the applicable laws in foreign jurisdictions; legal contingencies; risks related to the Corporation’s accounting policies; risks associated with future acquisitions; uncertainty in the ability of the Corporation to obtain government permits; failure to comply with, or changes to, applicable government regulations; bribery and corruption risks, including failure to comply with the Corruption of Foreign Public Officials Act or applicable local anti-corruption law; uncertainties in growth management; and certain corporate objectives, goals and plans for 2016; and the Corporation’s ability to meet other factors listed from time to time in the Corporation’s continuous disclosure documents. 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 press release and in the Corporation’s other documents filed with the Canadian securities authorities.

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 press release and in the Corporation’s other documents filed with the Canadian securities authorities including, but not limited to, the Corporation’s Management’s Discussion and Analysis for the year ended December 31, 2015 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 press 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.

Category: General