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Sherritt International Corp T.S

Alternate Symbol(s):  SHERF

Sherritt International Corporation is a Canada-based company engaged in the mining and refining of nickel and cobalt metals essential for the adoption of electric vehicles through hydrometallurgical processes. The Company is engaged in the production of high purity nickel and cobalt metals from lateritic ore. Its technologies group creates solutions for oil and mining companies around the world to improve environmental performance. The Company offers a range of products including Nickel, Cobalt, Fertilizers and Other Products. The Nickel products category includes standard grade, steel grade, and nickel powders. The Cobalt products category includes cobalt briquettes and cobalt powders. The Company’s Fertilizers product category includes anhydrous ammonia, granular ammonium sulfate, crystalline ammonium sulfate-super salt, and crystalline ammonium sulfate-standard grade. The Other products category includes sulfuric acid, zinc sulfide, and copper sulfide.


TSX:S - Post by User

Post by Contrarian333on Jul 30, 2021 2:17pm
225 Views
Post# 33632885

Some Random Thoughts!

Some Random Thoughts!It is important to understand the reality of SCN’s competitive position.  While they are a low cost producer at the operating level, and at certain cobalt credit prices can be one of the lowest cost producers in the world, at the overall corporate level they are not.  Therefore, their cash flow swings dramatically at different nickel prices.  They are heavily torqued to Ni prices and the cash flow delta between even say $8 Ni and $9 Ni is significant.  At an annual average of $8 nickel the stock is fairly priced.  At an annual average $9 nickel it could reasonably trade up to $2.00 (at $15 Ni more like $8/shr).  If you believe there will be a substantive nickel cycle SCN is a great way to play it.  George Soros always said that for a given commodity price move one wanted to own the low cost producer AND the swing cost producer.  Cash flow and not necessarily earnings is the right way to measure the attractiveness of this Company as some of the accountants on this Board have pointed out.  As I previously stated, I didn’t expect a big buyback of bonds this Q with one CEO departing, another starting, and new budgets being prepared.  I do expect more significant buybacks in the quarters ahead if Ni prices remain flat to higher.  I also think the technology thing is not to be discounted and offers a low risk “growth” aspect to the story, the absence of which some posters complained in the past.    

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