Sherritt International, a nickel-cobalt mining and refining company has reported its financial results for the three- and six-month periods ended June 30, 2018 detailing production at its Cuba JV.
Sherritt International (TSX:S), a nickel-cobalt mining and refining company has reported its financial results for the three- and six-month periods ended June 30, 2018 detailing production at its Cuba JV.
As highlighted in the press release:
- Adjusted EBITDA was C$49.5 million, up 70 percent from C$29.2 million in Q2 2017. Growth was largely due to higher realized nickel and cobalt prices, offsetting the impact of lower oil production due to the expiration of a production sharing contract at Varadero West.
- Sherritt’s share of finished nickel production at the Moa Joint Venture in Cuba was 3,749 tonnes while finished cobalt was 388 tonnes. Q2’s production totals, which are consistent with Sherritt’s historical performance, indicate that the production challenges experienced in Q1 2018 that limited the availability of mixed sulphides due to the highest level of rainfall at Moa in more than 20 years and rail transportation delays to the refinery in Fort Saskatchewan, Alberta have been resolved.
- Net direct cash cost at the Moa JV was US$1.68 per pound of finished nickel sold, marking the lowest unit operating cost since Q3 2004. Q2’s NDCC represents the fifth consecutive quarter that the Moa JV is in the lowest cost quartile relative to other nickel producers based on annualized information tracked by Wood Mackenzie.
- Average-reference prices for nickel improved 57% from last year to US$6.56/lb while average-reference prices for cobalt increased 66 percent to US$42.93/lb.
- Received C$9 million from the Moa JV as a final repayment on a C$45 million working capital facility provided by Sherritt. This working capital facility is now fully repaid and future available free cash flow from the Moa JV is expected in the form of dividends commencing in Q3 2018
- Sherritt reduced its long-term debt to C$730.5 million based on the book value of outstanding debt by purchasing for cancellation C$10.7 million of outstanding debentures in Q2 2018. Combined with the results of its modified Dutch auction tender offer completed in Q1, Sherritt has eliminated C$131.9 million of indebtedness in 2018 and approximately C$2 billion since 2014.
- Sherritt ended the quarter with C$197.2 million in cash, cash equivalents and short-term investments, down from C$237.3 million at March 31, 2018. The decrease was due to a number of factors, including the timing of fertilizer receipts and the timing of interest payments on debentures. In addition, Sherritt purchased C$10.7 million of the Corporation’s debentures for cancellation during Q2 2018.
- Net earnings for Q2 2018 totaled C$2.8 million or C$0.01 on a per share basis. In Q2 2017, Sherritt incurred a net loss of C$101.9 million or C$0.35 per share
- Announced the successful completion of a pilot-scale test of a proprietary process to upgrade Alberta bitumen at a lower cost. The pilot-scale test was based on Sherritt’s 60 years of experience developing hydrometallurgical processes and use of autoclaves.