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DISSEMINATION IN THE UNITED STATES
Sherritt International Corporation (“Sherritt” or the “Corporation”)
(TSX:S) today announced that its Cuban partners have formally ratified
an overdue receivables agreement (the “Agreement”) for repayment of
amounts owed to Sherritt from Energas S.A. (“Energas”) of US$150
million, and have made the first monthly payment of US$2.6 million to
Sherritt in Canada in accordance with the terms of this Agreement. The
overdue amounts from Energas relate to Sherritt’s power business in
Cuba, and include a loan provided by Sherritt to fund the expansion of
power production facilities at Boca de Jaruco.
“Ratification of the overdue receivables agreement by our Cuban partners
is an important step in addressing our Cuban receivables issues.” said
David Pathe, President and CEO of Sherritt International. “We would like
to thank our Cuban partners and government officials for their efforts
in ratifying the agreement in light of recent geopolitical developments
that have impacted the country. We continue to work with our Cuban
partners to try to ensure that current receivables are paid on a timely
basis. Sherritt and our Moa Joint Venture (“Moa JV”) partner will be
celebrating 25 years of collaboration later this year, and we look
forward to ongoing cooperation, particularly as demand for Class 1
nickel and ethically-sourced cobalt continues to grow in response to
surging demand for electric vehicle batteries.”
Under the terms of the Agreement, Sherritt will receive payments
averaging US$2.5 million per month effective May 2019. The May payment
of US$2.6 million was received by Sherritt today and a June payment is
expected later this month. The monthly payments will be made by way of a
currency exchange involving the Moa JV, which is focused on nickel and
cobalt production in which Sherritt is a 50% partner, and Energas, a
Cuban joint venture focused on electricity production in which Sherritt
holds a one-third interest, with foreign currency that would be used by
the Moa JV to pay for specified costs in Cuba instead being provided to
Sherritt in exchange for local currency held by Energas.
The Agreement recognizes and acknowledges 100% of amounts owing to
Sherritt. In addition, the Agreement provides that Sherritt will receive
100% of available distributions from the Moa JV once each partner has
received a minimum amount of distributions. The minimum dividend
threshold for 2019 is US$68 million (100% basis). The minimum dividend
threshold for 2020 is currently under discussion and is expected to be
finalized in Q4 2019.
About Sherritt
Sherritt is a world leader in the mining and refining of nickel from
lateritic ores with projects and operations in Canada, Cuba and
Madagascar. The Corporation is the largest independent energy producer
in Cuba, with extensive oil and power operations across the island.
Sherritt licenses its proprietary technologies and provides
metallurgical services to mining and refining operations worldwide. The
Corporation’s common shares are listed on the Toronto Stock Exchange
under the symbol “S”.
FORWARD-LOOKING STATEMENTS
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”, “potential”, “projected”, “continue” or
other similar words or phrases. Specifically, forward-looking statements
in this document include, but are not limited to, statements regarding
anticipated payments of outstanding receivables.
Forward looking statements are not based on historical facts, but rather
on current expectations, assumptions and projections about future
events, including commodity and product prices and demand; the level of
liquidity; production results; realized prices for production; earnings
and revenues; and certain objectives, goals and plans. 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 or payments 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. These 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; level of liquidity; access to capital; access to financing;
risks associated with the Corporation’s joint venture partners;
variability in production at Sherritt’s operations in Cuba; risks
related to Sherritt’s operations in Cuba; risks related to the U.S.
government policy toward Cuba, including the U.S. embargo on Cuba and
the Helms-Burton legislation; potential interruptions in transportation;
uncertainty of gas supply for electrical generation; the possibility of
equipment and other failures; risks associated with mining, processing
and refining activities; the potential for shortages of equipment and
supplies; political, economic and other risks of foreign operations;
foreign exchange and pricing risks; credit risks; competition in product
markets; uncertainty in the ability of the Corporation to enforce legal
rights in foreign jurisdictions and uncertainty regarding the
interpretation and/or application of the applicable laws in foreign
jurisdictions. 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, including
without limitation the Annual Information Form of the Corporation dated
February 13, 2019 for the period ending December 31, 2018, which is
available on SEDAR at www.sedar.com.
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 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.
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