Sherritt Reports Fourth Quarter and Full Year 2025 Results; Provides 2026 Guidance

Executive Summary

• Sherritt International reported Q4 2025 and full‑year 2025 financial results, posting a net loss from continuing operations of C$15.7 M ($0.03 per share) for the quarter and C$65.4 M ($0.14 per share) for the year.
• The company announced an operational turnaround plan for the Moa Joint Venture, including new mining equipment, technical expertise, and debottlenecking projects, with 2026 production guidance of 26‑28 kt nickel and 2.75‑2.85 kt cobalt (finished).
• Board change: John Ewing stepped down from the board to focus on his CIO role at Ewing Morris & Co.; interim CEO Dr. Peter Hancock highlighted the turnaround plan.

Key Details

• Financial Highlights – Q4 2025
• Revenue: C$55.5 M (up 21% YoY).
• Net loss from continuing operations: C$(15.7) M ($0.03/share).
• Adjusted net loss from continuing operations: C$(13.9) M ($0.03/share).

• Adjusted EBITDA: $(1.5) M.

• Financial Highlights – Full Year 2025

• Revenue: C$177.3 M (up 12% YoY).
• Net loss from continuing operations: C$(65.4) M ($0.14/share).
• Adjusted net loss from continuing operations: C$(77.2) M ($0.17/share).

• Adjusted EBITDA: $7.1 M.

• Operational Performance – Moa JV

• Q4 2025 finished production: 3,816 t nickel, 424 t cobalt (Sherritt’s share).
• Full‑year 2025 production: 25,240 t nickel, 2,728 t cobalt (100% basis), within revised guidance.

• Net Direct Cash Cost (NDCC) Q4 2025: US$6.01/lb; FY 2025: US$5.96/lb (within original range).

• Power Division

• Electricity production Q4 2025: 210 GWh; FY 2025: 799 GWh (near guidance).
• Unit operating cost FY 2025: $23.33/MWh (low end of guidance).

• Dividends from Energas FY 2025: C$26.0 M (double 2024).

• Strategic & Organizational Updates

• Debt restructuring completed April 2025 – reduced debt by C$68 M, extended maturity to Nov 2031, lowered annual interest expense by ~C$3 M.
• Cost‑reduction initiatives target $20 M of annual savings (additional to $17 M saved in 2024).

• Board appointments: Brian Imrie as Chair, Brett Richards as independent director; Dr. Peter Hancock serving as Interim CEO while a permanent CEO search is underway.

• 2026 Guidance – Metals

• Finished production: 26‑28 kt nickel, 2.75‑2.85 kt cobalt (100% basis).
• Mixed sulphides output expected to reach 30‑32 kt of contained Ni/Co by year‑end.

• NDCC forecast: US$5.75‑US$6.25/lb (consistent with 2025).

• 2026 Guidance – Capital Spending

• Sustaining capital (Metals): $35‑$40 M (Moa JV 50% basis, Fort Site 100%).
• Tailings facility: $25‑$30 M (50% basis).

• Growth debottlenecking projects: $2.5‑$5 M (50% basis).

• 2026 Guidance – Power

• Electricity production: 825‑875 GWh (33% basis).
• Unit operating cost: $27.25‑$28.75/MWh.

• Capital spending: $3.0 M (33% basis).

• Dividends & Distributions Outlook

• No cash or cobalt distributions expected under the Cobalt Swap in 2026.

• Expected Energas dividends to Canada: $20‑$25 M.

• Other Notable Items

• Nickel put options purchased for 3,750 t (US$7.48/lb) at a cost of $2.4 M covering Feb 1–Jul 31 2026.
• Organizational restructuring eliminated the Chief Commercial Officer role; executive team reduced from seven to four members.
• Geopolitical update: Venezuela halted oil exports to Cuba; U.S. Executive Order imposes tariffs on oil‑supplying countries, potentially affecting Cuban operations.

Notable Quotes

• Dr. Peter Hancock, Interim CEO: “We are implementing a multi‑faceted turnaround plan that includes new mining equipment, additional technical expertise, and debottlenecking projects to improve efficiency and reliability… we are confident this plan will support increased output utilizing our recently completed expansion projects.”
• John Ewing, departing board member: “I’m pleased with how the Board has been strengthened and I have full confidence in Dr. Peter Hancock as Interim CEO…”