Sherritt Reports Second Quarter 2026 Results
Sherritt International Corporation reported a net loss of $71.1 million, or $0.10 per share, for the second quarter ended June 30, 2026. The results were driven by the suspension of its Cuban operations following U.S. sanctions and significant environmental rehabilitation costs in its Oil & Gas division. The company suspended direct participation in its Moa and Energas joint ventures in Cuba on May 7, 2026, due to an Executive Order expanding U.S. sanctions. This action led to depleted feed inventory at its Fort Saskatchewan refinery and the cessation of mining and processing operations near the end of the quarter.
Financially, Sherritt recorded a net loss from continuing operations of $71.1 million, compared to an adjusted net loss from continuing operations of $24.8 million, or $0.04 per share. Adjusted EBITDA was negative $2.0 million. Revenue increased 36% to $59.3 million from the second quarter of 2025. Available liquidity in Canada stood at $80.1 million.
Operational disruptions in Cuba significantly impacted production volumes. Mining and processing at the Moa mine ceased near the end of the second quarter due to fuel supply disruptions and depleted feed inventory at the Fort Saskatchewan refinery, which was depleted on June 22, 2026. Sherritt’s share of metals production for the quarter included:
- Finished Nickel: 1,319 tonnes (vs 3,431 tonnes in Q2 2025).
- Finished Cobalt: 135 tonnes (vs 389 tonnes in Q2 2025).
- Fertilizer Sales: 52,328 tonnes.
Power production reached 207 GWh, an 18% increase from the second quarter of 2025. This segment remained unaffected by Cuba fuel disruptions as Energas uses domestic natural gas. Net Direct Cash Cost (NDCC) for nickel rose to US$7.31/lb from US$5.27/lb in the second quarter of 2025, impacted by lower volumes and higher sulphur and diesel prices.
The company underwent significant organizational and governance changes during the period. On April 7, 2026, Sherritt completed a non-brokered private placement, issuing approximately 207 million shares at $0.21 per share for gross proceeds of $43.6 million. On May 7, 2026, board members Brian Imrie, Richard Moat, and Brett Richards resigned. Auditor Deloitte LLP resigned effective May 12, 2026, with no disagreement, and CFO Yasmin Gabriel resigned on May 13, 2026.
Peter Hancock was appointed Interim President and CEO, Fitzroy Richardson was appointed Interim CFO on June 3, 2026, and Tabrez Khan was appointed as an independent director and Audit Committee member on June 14, 2026. The Ontario Securities Commission issued a failure-to-file cease trade order on May 21, 2026, due to delayed first quarter filings; this was revoked on July 9, 2026. Court orders were obtained to allow the Board to act with two directors and operate without an external auditor until September 30, 2026. Additionally, the intended dissolution of Cuban interests was abandoned on May 19, 2026.
Liquidity pressures mounted due to credit facility issues. As of May 31, the borrowing base was $76.3 million against $79.5 million in borrowings, triggering a notice of excess borrowing. Lenders required repayment of $3.2 million during the second quarter. The company was not in compliance with its EBITDA-to-Interest Expense covenant, and no further draws were available. By June 30, the borrowing base had dropped to $43.1 million against $76.3 million in borrowings. Sherritt repaid $16.6 million, representing 50% of the deficiency, to avoid immediate default action.
On May 20, 2026, Sherritt signed a non-binding term sheet with Gillon Capital for a warrant private placement that would give Gillon Capital 55% ownership upon full exercise. An exclusivity agreement was signed on June 15, 2026, for 120 days. The U.S. State and Treasury departments do not object to the negotiations.
In the Oil & Gas division, the company reported a loss from operations of $38.6 million in the second quarter of 2026, primarily due to a $36.1 million update on environmental rehabilitation costs for legacy assets in Spain.
“The second quarter was marked by significant challenges and disruption,” said Peter Hancock, Interim President and Chief Executive Officer. “Against this backdrop, we remained focused on preserving liquidity, maintaining safety, maximizing fertilizer production, and advancing stakeholder engagement and strategic initiatives necessary to prepare for a restart of our critical minerals mining and refining operations subject to U.S. government approval.”