Sherritt Provides Update on Various Matters including Resignation of CFO and Auditor

The most recent news, dated May 13, 2026, details the immediate and severe collapse of Sherritt’s corporate governance structure. The company has announced the resignations of both its external auditor, Deloitte LLP, and its Chief Financial Officer, Yasmin Gabriel. As a direct consequence, Sherritt expects to miss the May 15, 2026, filing deadline for its first-quarter 2026 financial statements. This will trigger a Failure to File Cease Trade Order (FFCTO) from the Ontario Securities Commission, halting all trading in the company’s securities. The root cause of this crisis is explicitly linked to the U.S. Executive Order issued on May 1, 2026, which expanded sanctions against Cuba. This latest development is the final straw in a rapid sequence of negative events that began with the sanctions announcement and quickly escalated to the suspension of Cuban operations, board resignations, a delayed earnings call, and now the resignation of key financial gatekeepers.

This is the culmination of a catastrophic chain of events for Sherritt and constitutes a corporate existence-threatening scenario. - Immediate Precursors: The timeline of collapse is startling. On May 1, 2026, the U.S. expanded sanctions against Cuba. On May 4, Sherritt acknowledged it was assessing the impact. By May 7, the company had suspended all direct participation in its Cuban joint ventures, begun repatriating employees, and announced the resignation of three board members. A May 11 update revealed a court application to maintain board functionality and a delay in Q1 results. - The Final Blow: The May 13 resignations of the CFO and auditor are a devastating signal. In a crisis, the resignation of the auditor is a profound red flag, irrespective of the stated reason. It effectively prevents the company from filing audited financial statements, a fundamental requirement for maintaining a stock listing. The CFO’s immediate resignation compounds this, signaling a potential loss of internal financial control and capability. - Contradiction of Prior Positive Steps: The $43.5 million private placement that closed on April 7, 2026, and was priced at $0.21, is now completely undermined. Investors who participated, including strategic backer Seymour Schulich who injected $14.4 million, have seen the value of that capital at risk. The very “challenging operating environment” that the financing was meant to navigate has just rendered the company non-functional. The financial flexibility this capital provided is now locked inside a company facing a trading halt and potential collapse. - Context vs. Previous News: The historical news shows a company perpetually on the back foot, consistently lowering production guidance due to “operating challenges in Cuba” and “fuel supply constraints.” The 2026 turnaround plan mentioned in February is now a dead letter. The most recent news makes all previous negative news appear as minor tremors preceding a major earthquake. The stock is now fundamentally uninvestable. The rating is "Material - Game Changer" because this news signals the potential end of the company in its current form, which is the most significant negative outcome possible.

Sherritt International is a Canadian resource company whose flagship is a 50% stake in the Moa Joint Venture in Cuba, a large-scale nickel and cobalt mining and processing operation. The company also has a 33% stake in Energas S.A., the largest independent energy producer in Cuba, which has an operational license extended to 2043. A key asset in Canada is the Fort Saskatchewan refinery in Alberta, which processes feedstock from the Moa JV into finished nickel and cobalt for sale. The entire operational structure is now in a state of suspension or imminent shutdown due to U.S. sanctions.