Sherritt secures U.S. licence to supply nickel venture in which it holds 50%
Key Facts
Sherritt International said it had obtained a licence from the U.S. Office of Foreign Assets Control to purchase and deliver fuel, fuel oil and sulphur to Moa Nickel operations in Cuba, paving the way for a restart. The company said in its operational and financial update that the authorisation covers supplies of these materials to the halted venture. Sherritt holds a 50% stake in the Moa joint venture, according to its results disclosure for the second quarter of 2026. Resuming operations remains conditional on obtaining a second emergency licence from the U.S. agency, which the company is working to secure. The move to secure supplies coincides with Sherritt's efforts to obtain financing and recapitalise to restart and restore normal operations.
The supply licence extends to the fuel supplier and parties acting on its behalf, according to Sherritt's operational update. These include banks covered by the U.S. authorisation under arrangements to supply materials to Moa Nickel. It also covers vessel operators and providers of insurance and ancillary services acting on behalf of the fuel supplier, the company said. Sherritt identified the materials authorised for purchase and delivery as "fuel, fuel oil and sulphur" in describing the scope of the licence it obtained. The authorisation thus covers the supplier and parties involved in shipping, insurance and ancillary services, as well as banks acting on its behalf in carrying out the deliveries.
On the legal arrangements for the shipments, Sherritt said Moa Bay, the holder of a certified claim related to Moa Nickel operations, had agreed to temporary shipments. That consent comes in exchange for what the statement described as a "consent fee", under the agreement the parties reached on these shipments. Moa Bay pledged not to bring claims under the Helms-Burton Act against participants covered by the agreement over the authorised shipments. That undertaking applies to the participants and shipments covered by the agreement, within the scope the company outlined in its update. Sherritt and Moa Bay also obtained separate authorisation from the U.S. Office of Foreign Assets Control to implement their agreement, alongside the licence to supply fuel and materials.
Sherritt said the licence applications had been coordinated with Gillon Capital as part of the latter's efforts to acquire a controlling stake in the company. The process of securing U.S. authorisations thus coincides with a potential change of control at Sherritt, according to its operational and financial update. In court proceedings concerning the shareholder meeting and potential transactions, the company said an Ontario court had dismissed Kima's application in its entirety. The application included efforts to bring forward the annual and special meeting of shareholders from its scheduled date, according to Sherritt's statement on the court ruling. Kima's application also sought restrictions on potential transactions before the shareholder vote, efforts encompassed by the full dismissal announced by the company.
Preparations for the restart follow a decline in Sherritt's share of finished nickel and cobalt production in the second quarter of 2026 compared with the corresponding period of 2025. The company's share of finished nickel production totalled 1,319 tonnes, according to figures released in its results for the quarter. Nickel production attributable to its stake had totalled 3,431 tonnes in the second quarter of 2025, according to the comparison in the results. Sherritt's share of finished cobalt production was 135 tonnes in the second quarter of 2026, compared with 389 tonnes in the corresponding period. The company also reported a loss from continuing operations of C$71.1 million in the second quarter of 2026, according to its financial results statement.
On liquidity, the company's available funds in Canada totalled C$80.1 million at the end of June 2026, according to its second-quarter results. In a subsequent update on its financial position and liquidity in September, Sherritt warned of material uncertainty over its ability to continue operating. It said the situation "may cast significant doubt on its ability to continue as a going concern", in the warning included in that update. The company said it was seeking bridge financing as part of efforts to address its financial needs related to the restart. It is also seeking substantial new capital to restart and restore normal operations, alongside measures to secure the necessary licences and supplies.
As for the next steps, Sherritt expects to send the first fuel shipment to Moa Nickel operations in the fourth quarter of 2026, according to its operational update. The expected shipment timing forms part of preparations for the restart, as work continues to obtain the second emergency licence required to resume operations. On shareholder matters, the company confirmed in its statement on the Ontario court ruling that the date of the annual and special meeting remained unchanged. The meeting remains scheduled for 15 December 2026, following the dismissal of Kima's application, which included efforts to bring it forward. These milestones coincide with Gillon Capital's efforts to acquire a controlling stake and Sherritt's need for bridge financing and new capital to restore normal operations.