Sherritt and Pala Announce Board Renewal and Collaboration Agreement

On December 16, 2025, Sherritt International announced it has entered into a collaboration agreement with Pala Assets Holdings Limited, a significant shareholder. As part of the agreement, Pala has withdrawn its requisition for a special meeting of shareholders. Key terms include: - The appointment of Pala's nominee, Brett Richards, to Sherritt's Board of Directors, effective immediately. - The resignation of director Shelley Brown. - A standstill agreement with Pala that extends through the 2027 annual general meeting. - Pala has agreed to vote in favour of the Board's director slate at the 2026 meeting. - The CEO Search Committee has been reconstituted and will be chaired by Brian Imrie, with Brett Richards and Richard Moat as members.

This agreement marks the formal conclusion of a shareholder activist campaign that has reshaped the company's leadership and board in under a month. The impact is materially positive as it resolves a costly and distracting proxy battle, providing a stable platform from which to address the company's severe underlying issues.

The timeline of events reveals a rapid capitulation by the previous board in the face of overwhelming pressure: - Q2 & Q3 2025 (July 29 & Nov 5): The company delivered poor operational results, citing a difficult operating environment in Cuba, and was forced to cut its 2025 production guidance twice. This demonstrated a persistent inability to forecast and execute. - November 25, 2025: Pala, a shareholder for nearly a decade, launched an activist campaign, citing a 75% share price collapse under CEO Leon Binedell, chronic operational underperformance, and governance failures. - December 8, 2025: In a direct response to Pala's pressure, CEO Leon Binedell stepped down. - December 16, 2025: This final agreement solidifies Pala's victory. They have achieved their objectives: the CEO is gone, and their nominee is on the board with a key role in selecting the next CEO.

While resolving this internal conflict is a clear positive, it is critical to view it as a reaction to a deeply negative situation. The agreement does not produce a single extra tonne of nickel, nor does it improve the challenging political and operational landscape in Cuba. It simply installs new stewards to attempt a turnaround. The company has essentially been forced to accept oversight from a major shareholder who lost faith in previous management's ability to protect its investment. The market should see this as a necessary, but not sufficient, step toward recovery. The real work of fixing the operations begins now.

Sherritt International is a Canadian company focused on mining and refining nickel and cobalt from lateritic ores. Its core asset is a 50/50 joint venture with the Cuban government (the "Moa JV"). The JV operates a mine and processing facility in Moa, Cuba, and a refinery in Fort Saskatchewan, Alberta. Sherritt also has a significant interest in Energas S.A., a power generation business in Cuba.

The company's primary focus has been a two-phase expansion of the Moa JV, intended to increase mixed sulphide precipitate (MSP) production by 20%. This was designed to fully utilize the capacity of the Canadian refinery with its own feed, displacing the need to purchase lower-margin third-party material. This project has been central to the company's strategy, but its execution has been marred by delays and production shortfalls, leading to the guidance cuts and shareholder activism seen in 2025.