Sherritt International Corp T.S

TD Moves PT to $1.25

[Ernieandbert]

Moving  price deck on many commodities higher but notably Ni and Uranium.  Still way behind the curve at $1.25.  I think he has the wrong handle...should be $2.25 to bring valuation to where it was when Ni was at U$5.00/lb....and it is almost 3x that price today.

[Ventoux]

 Thanks for sharing. What kind of earnings and cash flow is this analyst projecting based on his new price deck? 

[Ernieandbert]

for a small cap co, earnings are useless...look at Ebitda and deduct cash expenses (Interest Expense on 2nd Lien Bonds, Cash Taxes and Capex).  TD is so far behind that they are looking for 2022 Ebitda of $103mm...about the same as BNS (who still has a PT of $0.45).   I think they will avg C$13.75/lb in 1Q22 with C$ NDCC of $5.31/lb = C$ Ebitda of $78.14mm (Street wide estimate is

[Ventoux]

Good points. Perhaps the "cheap" share price is a reflection of market concern as to whether managemant can deliver? They are talking about expanding production. I for one prefer your scenario of paying the debt back and de-levering the company.The last management team didn't exactly cover themselves in glory.   

[Ernieandbert]

Fair enough.  I was no fan of Pathe.  New CEO and CFO seem on it.  COO leaving is also good.  Not blowing their brains out in the waters to the north of Cuba is also good.  Largely same Board but two new additions should not hurt.  If Ni holds here, there will be so much bloody FCF, paying down debt and the modest expansion will not be a problem.    And

[Ventoux]

All very good points. I just heard that a million of the 8.5% bonds traded at $76.00 GLTA, especially the longs!!!

[Ernieandbert]

thanks for that and wouldn't be surprised as I saw them at 71 bid yday and 74 this monring.  I bought some one month ago at $59 and sent off a roll in them.  Cash Flow Sweep...bonds are catching on to how powerful this Ni price is to FCF...stock traders, not so much.  

[Ventoux]

To quote you" Bonds are traded Insitutionally and by those who do more in-depth research..." March 18, 2022  

[Ernieandbert]

Exactly.  Follow the bonds. 

[Abruzz0]

It has been some time since we have seen the SP this high. Bodes well for 2022.

[Ernieandbert]

Jan/18 it was $1.87, Ni was at $5.00, it has over $750mm of debt and $561mm of mkt cap for EV excl cash of $1.3bln. Today it is $0.76, Ni is at $15.00, it has about $450mm of debt $83mm which is subordinated and $300mm of mkt cap for EV excl cash of $727mm Do you guys see the difference?  For the EV to equate to what it was in Jan/18, when Ni was only $5.00, the stock would need to trade

[Stratocheif]

You seem to be doing some homework on sherritt I was wondering what your opinion is on this.......thier financial statements for year 2021 show $612 million revenue for MOA joint venture. But only $110 million assigned to sherritt. Doesn't sound like a 50/50 partnership to me. I find thier financial statements are a bit of smoke and mirrors and hard to pin down exactly what's going on

[YourFriendo]

Sherritt gets 50% of the declared dividends from the Moa JV, that's all that matters.   

[Stratocheif]

And who declares this dividend? The cuban government?

[Stratocheif]

This isn't a valid business. It's monkey business. If sherritt was getting 50% of the earnings from moa, they'd have taken in about 100 million last year.

[Ernieandbert]

It would help us all on this board tho if you showed us the math behind your model though.  Please share.  It would be helpful.  

[Maxmoe]

Hey fellas, maybe "show me yours and I'll show you mine" will work? So you start, I'm sure others will follow. I don't have one, I just pick numbers out of my mineshaft. Or openpit. Like I'm expecting eps and cfps both about 50+ cents per share for 2022. At $12 Ni. What you got?

[Contrarian333]

Earnings are not the same as dividends declared.  

[rkhosla]

Yeah - this is kinda the problem.  So Cuba is the JV partner (through a state owned company 'General Nickel') AND rules the jurisdiction / sets royalty and taxes... So you kind of see that the partnership is definitely not equal.  Which is why I have been stressing out so much about JV dividends which I had hoped we would've heard an announcement this quarter but we haven'

[Contrarian333]

Yeah - this is kinda the problem.  So Cuba is the JV partner (through a state owned company 'General Nickel') AND rules the jurisdiction / sets royalty and taxes... So you kind of see that the partnership is definitely not equal.  Which is why I have been stressing out so much about JV dividends which I had hoped we would've heard an announcement this quarter but we haven'

[rkhosla]

Yes correct, the marketing is done through a third company.  However this doesn't answer the question: Where is the money?  There really ought to be waterfalls of cash flowing out at the momment.  Contrarian you are as well aware as I that in the past on many occassions they have issued a news release when they recieve a divy from the JV.  On other occassions (especially

[Stratocheif]

We can try to look at the numbers for this complex and murky situation called sherritt. The various segments, power, fertilizer etc etc. The various sites and the fact that there are other cuban parts to the moa site. All a bit of a challenge to sort out without doing a lot of investigation and playing auditor. But dependance on and waiting for money from the cuban government is definitely the

[Contrarian333]

What some of you do not understand is that unlike power and oil and gas Sherritt is not dependant upon the Cuban government to make payments to them from the Moa nickel operation.  ICCI (Bahamas Company) has ownership of the refined nickel and sells it.   International Cobalt Company Inc. (“ICCI”)–located in Nassau, Bahamas, acquires mixed sulphides from Moa Nickel and other third

[rkhosla]

Thank you so much for explaining this elaborate shell game.  It brings me back to my original question however.....  Where is the money?  Now don't get me wrong, I am a true believer and I am absolutely certain we are going to be churning out huge amounts of cash and retiring our debt whilst investing in efficiencies etc.  But I really had expected a news release re cash

[mas7575]

Thanks for the honesty. I am a bit more optimistic that the market will reward us long-suffering shareholders once (if) actual cash starts to come to the company. i appreciate the balanced, respectful combination of posts on this board. Cheers, mas75

[Albatross]

An under appreciated asset that the market doesn't see or is blind to.. Isn't that what we are all looking for? A diamond in the rough? I love it when people reference market price as a reason as to why they shouldn't buy something. If you just keep saying "the market must know, the market must know" for your justification then you are always going to either be left puzzled

[SilenceDogood1]

Nicely said Albatross.  I couldn't agree more.  Much of the market is correctly priced much of the time.  However, there are exceptions and often those exceptions are in things that are not well understood for one reason or another, or where there is an audience that will not or can not participate.  Fear not, others will join as the story gathers momentum.  I wouldn

[Maxmoe]

Don't worry fellas, that's how all sell side analysts work. A 2.25 target would be pointless on his table. Sherritt is already the highest forecast % return stock on his table. But don't worry, when the stock is $1.25, his target will be $2.25.