Sherritt International: Navigating Governance Storms to Secure Nickel Dominance

The battle for control of Sherritt International (TSX: S) is reaching its climax. With the June 6 shareholder meeting deadline looming, investors face a critical choice: back the incumbent Board's proven strategy to capitalize on soaring nickel and cobalt demand—or risk destabilizing the company's progress under a proxy war led by SC2/Seablinc, a supplier with a clear conflict of interest.

The Proxy Battle: SC2's Self-Serving Agenda

SC2 Inc., backed by its affiliate Seablinc Canada—a major supplier to Sherritt's Cuban Moa Joint Venture—is waging a proxy campaign to gain control of the company. But its motives are far from altruistic. SC2's financial ties to the Moa JV are unraveling: its revenue from the venture has plummeted from $145 million in 2022 to just $50 million in 2025, as Sherritt tightened procurement discipline to reduce costs. SC2's campaign to reverse this decline threatens to subordinate shareholder interests to its own commercial survival.

The proxy battle has exposed SC2's pattern of disruptive tactics: failed mini-tender offers, misleading press releases, and even an invalid requisition for a special shareholder meeting. Worse, SC2's short-term focus clashes with Sherritt's long-term goals. A third party holds an irrevocable option to acquire 75% of SC2's Sherritt shares by mid-2026, signaling no commitment to sustained value creation.

Sherritt's Defenses: A Fortress of Financial Resilience

The Board has turned adversity into opportunity. Key achievements include:

1. Debt Restructuring Triumph:
2. Reduced debt by $68 million (21%) through strategic note exchanges in 2025, extending maturities to 2031 and slashing annual interest costs by $3 million.

4. Moa JV Expansion Momentum:

5. Phase One of the Moa JV's Slurry Preparation Plant cut costs and carbon intensity, while Phase Two's processing plant is now commissioning, poised to boost mixed sulphide precipitate (MSP) production by 20% by late 2025.

6. Cobalt Swap Payoff:

7. Recovered $182 million of a $368 million Cuban receivable via the 2022 Cobalt Swap Agreement, with $30 million repaid in 2024 alone.

8. Energas Dividend Boost:

9. The Cuban power joint venture's dividends surged to $13 million in 2024, up from $1.4 million in 2023, with projections of $25–30 million in 2025 after a 31-year contract extension.

The Catalyst: Glass Lewis Endorsement and Strategic Momentum

Proxy advisor Glass Lewis recently endorsed voting FOR all Sherritt's nominees, citing the Board's progress in stabilizing finances and advancing strategic initiatives. This is a game-changer. A Glass Lewis recommendation carries significant weight, as institutional investors often follow such guidance. The Board's five new independent directors since 2021, including April's addition of Richard Moat, have fortified governance.

SC2's victory would risk triggering $200 million in accelerated debt obligations and destabilizing the Moa JV's expansion—a project critical to Sherritt's pivot to EV battery metals. With nickel prices hovering near $10/lb (up 6% year-to-date) and cobalt demand surging, now is the time to lock in long-term value.

Why Vote FOR Sherritt's Nominees?

1. Avoid Governance Chaos: SC2's track record of litigation (e.g., a withdrawn Ontario tribunal challenge in May) and short-termism pose existential risks to Sherritt's operational continuity.
2. Preserve Nickel Dominance: The Moa JV's expansion will position Sherritt as a top-tier EV battery supplier, with cobalt and nickel production set to hit 5,000 tonnes annually by 2026.
3. Liquidity and Covenant Safety: Despite near-term headwinds from U.S. sanctions on Cuba, Sherritt maintains $55.7 million in Canadian liquidity and full debt covenant compliance.

Risks and the Path Forward

No investment is risk-free. Sherritt faces U.S.-Cuba geopolitical tensions, commodity price volatility, and operational delays (e.g., Q1 nickel production fell 18% due to Cuban power outages). However, the Board's cost-cutting, debt restructuring, and strategic focus on EV supply chains have built a robust foundation. The $33 million net gain from recent debt transactions underscores financial discipline.

The Bottom Line: Act Now—Before It's Too Late

With the June 6 proxy deadline fast approaching, shareholders must act decisively. Voting FOR Sherritt's nominees is not just about avoiding SC2's self-serving disruption—it's about securing a stake in a company poised to dominate the nickel-cobalt boom.

Urgent Call to Action:
- Vote FOR all director nominees by 10:00 a.m. ET on June 6.
- Use Kingsdale Advisors' resources (1-866-229-8263) to ensure your vote is counted.

The window to safeguard Sherritt's strategic momentum is closing. Don't let short-term opportunism derail long-term value creation.

This article is for informational purposes only. Investors should conduct their own due diligence and consult with a financial advisor.