Sherritt Reports Third Quarter 2026 Results

Sherritt International Corporation (S) reported third-quarter 2026 results on November 11, 2026, with the data released at 17:05 ET on November 13. This period marks the first full quarter for the company with no metal production. Consolidated revenue was C$39.7 million, flat year-over-year, while combined revenue fell 50% to C$54.1 million from C$108.4 million. The company recorded a net loss from continuing operations of C$79.3 million, or C$(0.11) per share, a significant deterioration from the C$19.5 million loss in Q3 2025. Adjusted net loss stood at C$50.9 million, or C$(0.07) per share, excluding a C$26.8 million non-cash net loss on the revaluation of the GNC receivable and Energas payable under the Cobalt Swap. Adjusted EBITDA was C$(30.2) million, compared to C$1.6 million a year earlier, with nine-month adjusted EBITDA at C$(24.6) million versus C$8.6 million.

Production of finished nickel and cobalt was zero, with sales of 160 tonnes of nickel and 4 tonnes of cobalt drawn entirely from inventory. Fertilizer production totaled 54,489 tonnes, with sales of 38,847 tonnes at C$573.14 per tonne, an 11% increase. Fertilizer revenue rose to C$22.2 million from C$14.5 million. In the power segment, generation fell 30% to 169 GWh, generating C$12.7 million in revenue and C$7.4 million in earnings from operations, with a unit operating cost of C$14.43/MWh. The company reported C$42.4 million in available liquidity in Canada and C$167.0 million in total cash, of which C$123.5 million was held in Cuba, including C$120.0 million at Energas. Loans and borrowings totaled C$309.3 million.

Credit conditions deteriorated significantly during the quarter. On September 30, 2026, the Credit Facility borrowing base was C$21.9 million against C$59.7 million of borrowings, creating a C$37.8 million deficiency. Sherritt did not repay this amount, resulting in an event of default, though lenders have not issued a notice of acceleration. The company was also out of compliance with both the EBITDA-to-Interest and Senior Secured Net Debt-to-EBITDA covenants during Q3. On October 30, 2026, Sherritt failed to pay C$11.5 million in interest on the Amended Senior Secured Notes. The 30-day cure period runs to roughly November 29, 2026, after which noteholders holding 25% of principal can accelerate the debt. Noteholder enforcement is subject to a 180-day standstill under the intercreditor agreement. Only C$7.8 million was repaid on the Credit Facility after the quarter-end.

Strategic and operational updates included the issuance of an OFAC "Fuel License" on October 19, 2026, permitting the purchase and delivery of fuel, fuel oil, and sulphur to Moa Nickel. A second OFAC emergency license remains required before mining can restart, with no guarantee that further anticipated licenses will be issued. An interim consent agreement with Moa Bay Mining Co., a Helms-Burton Title III claimant, permits interim fuel shipments in exchange for consent fees payable by Sherritt. Approximately 280 employees, representing 47% of the Canadian workforce, were temporarily laid off for about 90 days starting November 16, 2026. Additionally, the company embedded negative guidance stating that the Fort Site and the Moa JV will stop producing ammonium sulphate fertilizer in Q4 2026, with only ammonia fertilizer and sulphuric acid continuing at Fort Site. The company’s CHRO has also departed.

Sherritt International Corporation (S) disclosed a series of significant financial and operational setbacks, including a payment default on its senior secured notes, the cessation of fertilizer production, and substantial quarterly losses.

The company failed to pay C$11.5M in interest on the Amended Senior Secured Notes, which carry roughly C$250M in principal at a 9.25% interest rate, on October 30, 2026. This default was not disclosed in releases issued on October 20 or November 4. Additionally, a default on the Credit Facility was dated September 30, 2026, accompanied by a C$37.8M borrowing base deficiency that the company declined to cure. The noteholders have the right to accelerate the debt within 30 days, and while revolver lenders have not yet accelerated, they retain that contractual right.

Simultaneously, Sherritt announced that ammonium sulphate production will cease at both its Fort Site and Moa operations in the fourth quarter. This move eliminates the last meaningful revenue line at the Canadian site. Prior to this announcement, management had highlighted strong fertilizer performance, citing an 11% increase in production, a 39% rise in sales, an 11% increase in realized prices, and a 53% jump in revenue. The production halt was not flagged in the November 3 or November 4 layoff releases, and guidance for Q4 cash generation has effectively been reduced without explicit labeling.

Financial results for the period reflect a company consuming cash while mines are shut. Adjusted EBITDA stood at negative C$30.2M, with Corporate and Other expenses burning roughly C$12.0M. This figure is derived from total Adjusted EBITDA of C$(30.2)M, less Metals at C$(25.7)M and Power at C$7.5M. The company reported a C$79.3M quarterly loss on C$39.7M of revenue, reflecting a fixed cost base operating with no production.

On the regulatory front, the OFAC Fuel License, which was already public as of October 19, remains the first of a series. The release provided no new regulatory steps, no second license, and no update on Gillon Capital beyond "continued support." Exclusivity for the license was struck on June 15 for 120 days, lapsing around mid-October without a definitive agreement being announced.

Sherritt’s stock has declined from C$0.47 on August 19 to C$0.17 currently. The company currently has no earnings floor, no dividend, and no defined recovery value per share.

Sherritt International Corporation (TSX: S), a Cuban-Canadian critical minerals producer incorporated in Canada, operates an asset base that is currently reduced to a single functioning leg. The company’s portfolio includes the Moa Joint Venture, a 50-50 partnership with General Nickel Company S.A. located in Holguín, Cuba. This laterite nickel-cobalt mine and processing plant, which produces mixed sulphides, had its direct participation suspended on May 7, 2026, under Executive Order 14404, with mining and processing ceasing at the end of the second quarter of 2026.

The Fort Saskatchewan facility in Alberta, known as the Fort Site, is 100% owned by Sherritt. It remains the only significant cobalt refinery in North America and one of three nickel refineries on the continent. Refining operations at the site ceased on June 22, 2026, once the mixed sulphide feed inventory was depleted. However, ammonia fertilizer and sulphuric acid production continues, with ammonium sulphate production scheduled to stop in the fourth quarter of 2026. This asset is the specific target of a proposal by the Kyma consortium to "preserve/enhance" the site, and it is the asset a U.S. domestic recapitaliser would most plausibly seek.

In Cuba, Sherritt holds a 33⅓% stake in Energas S.A., the largest independent power producer in the country. Energas operates natural gas-fired power generation using domestically sourced gas, insulating it from the regional fuel crisis. It is the company’s only cash-generative asset, though its cash flow is not accessible to the Canadian parent company.

The Metals Marketing and Corporate and Other segment includes subsidiaries that buy, sell, and hedge Moa Joint Venture nickel and cobalt, alongside corporate overhead. This segment also encompasses a legacy Oil & Gas division that incurred a C$36.1 million non-cash charge in the second quarter of 2026 related to Spanish environmental rehabilitation liabilities.

Governance at Sherritt is undergoing significant changes. Leon Binedell departed as CEO in December 2025, and Dr. Peter Hancock, who has over 35 years of mining experience and is a former Glencore executive, serves as interim CEO. Brian Imrie chairs the board, which is capped at eight directors. Tabrez Khan, a nominee of the Kyma consortium, joined the board in June 2026. Pala Assets remains under a standstill agreement until January 1, 2027, and the company’s CHRO has also departed.