Sherritt Posts C$79.3 Million Loss as Nickel and Cobalt Production Halted
Key Facts
Sherritt International reported on November 13 a net loss from continuing operations of C$79.3 million, or C$0.11 per share, for the three months ended September 30, compared with a loss of C$19.5 million a year earlier. Interim Chief Executive Peter Hancock said the quarter reflected "the full impact of the disruption to mining and refining operations." The results follow a halt in finished nickel and cobalt production after supply and operational disruptions related to the company’s project in Cuba. At the same time, the company announced temporary layoffs for about 280 employees, representing 47% of its Canadian workforce, as part of measures to preserve liquidity. The leave begins November 16 and is expected to last about 90 days, though employees may be recalled sooner depending on operating needs.
The adjusted loss from continuing operations was C$50.9 million, or C$0.07 per share, excluding mainly a net non-cash loss of C$26.8 million related to the revaluation of amounts receivable from GNC and amounts due from Energas under a cobalt swap agreement. The company posted an adjusted EBITDA loss of C$30.2 million. Quarterly revenue was C$39.7 million, unchanged from the corresponding period in 2025, while combined revenue, a non-IFRS measure, fell to C$54.1 million from C$108.4 million. For the first nine months, revenue rose to C$133.0 million from C$121.8 million, but combined revenue declined to C$292.8 million from C$369.7 million. The figures reflect a divergence between reported revenue and the combined revenue measure during a period when metals activities were disrupted.
Metals operations were the hardest hit, with segment revenue falling to C$41.2 million in the third quarter from C$94.1 million a year earlier. Sherritt’s share of nickel sales fell to 160 tonnes from 2,740 tonnes, while cobalt sales dropped to 4 tonnes from 262 tonnes. The company recorded no production of finished nickel or cobalt during the quarter, and sales were limited to available inventory. Fertilizer sales totaled 38,847 tonnes, up from 27,948 tonnes, as customers bought fall products early. The average realized fertilizer price also rose 11% to C$573.14 per tonne, supporting the business while metals operations remained halted.
Fuel supply disruptions in Cuba, along with the inability to secure other inputs, began to disrupt mining and processing by the end of the second quarter. Feed inventory at the Fort Saskatchewan refinery in Alberta ran out on June 22, halting finished nickel and cobalt production. Energas was not affected by fuel restrictions because it uses local natural gas, but it produced 169 gigawatt-hours of electricity during the quarter, compared with 243 gigawatt-hours a year earlier. The company attributed the decline to Energas’ increased participation in frequency regulation to help stabilize the national electricity grid. Before the 2026 disruption, Sherritt produced 12,620 tonnes of finished nickel and 1,364 tonnes of cobalt in 2025, compared with 15,166 tonnes and 1,603 tonnes in 2024.
Available liquidity in Canada was C$42.4 million on September 30. On that date, the borrowing base under the credit facility was C$21.9 million, against outstanding borrowings of C$59.7 million, leaving a shortfall of C$37.8 million. After the quarter ended, Sherritt repaid C$7.8 million under the facility and said the administrative agent had not issued a notice accelerating the debt as of November 13. However, the company did not pay C$11.5 million of interest due on October 30 on the amended secured notes. The agreement provides that a default continues if the interest remains unpaid 30 days after its due date.
On October 19, Sherritt obtained a specific license from the U.S. Office of Foreign Assets Control allowing it to purchase and deliver fuel, fuel oil and sulfur to the mines and processing facilities of the Moa project in Cuba. The company said resuming operations requires a second emergency license and that the issuance of additional licenses is not guaranteed. It also said a full restart and the timing of an update to its 2026 guidance depend on additional licenses, securing fuel and other inputs in Cuba, and obtaining the required financing. The company expects to continue producing ammonia and sulfuric acid at its Fort Saskatchewan site, while suspending ammonium sulfate fertilizer production there and at the Moa project during the fourth quarter. The annual shareholder meeting is scheduled for December 15, 2026.