Sherritt's Resilience: A Year of Success Amidst Challenges

Sherritt International Corporation (TSX:S) concluded 2024 with robust operating results, meeting guidance despite facing numerous external challenges. The company's resilience and adaptability were evident in its ability to navigate hurricanes, an earthquake, nationwide power outages in Cuba, and rail and port labour disruptions in Canada. Sherritt's success can be attributed to its strategic initiatives, cost reduction measures, and effective management of its Cobalt Swap and Power divisions.



In 2024, Sherritt's finished nickel and cobalt production were within their respective guidance ranges, with the Moa Joint Venture (Moa JV) producing 30,331 tonnes of finished nickel and 3,206 tonnes of finished cobalt. The completion of the Slurry Preparation Plant (SPP) significantly enhanced mixed sulphides production efficiencies, ensuring a consistent feed to the refinery. This helped mitigate challenges encountered during the year, such as the rail labour disruption in Canada, as well as the earthquake, hurricanes, and nationwide power outages in Cuba. Full year 2024 net direct cash cost (NDCC) is expected to be within the previously disclosed guidance range of US$5.50 to US$6.00 per pound of nickel sold, marking a notable year-over-year improvement despite materially lower cobalt by-product credits.

Sherritt managed to navigate multi-year low metal prices and external challenges effectively to maximize the potential for Cobalt Swap distributions. In the fourth quarter of 2024, the company received a significant distribution of $30 million, composed of $23.7 million in cash and 223 tonnes of finished cobalt with an in-kind value of $6.1 million. Additionally, in its Power division, Sherritt received dividends of $7.0 million in Canada during the quarter, bringing the total to $13.0 million for the year.



Sherritt's ongoing efforts to optimize its Power division and access additional gas for electricity production resulted in a six-year high in annual production and materially higher dividends in Canada. Despite the Varadero facility operating in frequency control throughout 2025, which is expected to reduce the power generation volume by approximately 150 GWh, Sherritt expects there will be no impact to Power's Adjusted EBITDA, earnings from operations, or dividends from Energas to Sherritt in Canada. This is because Energas will continue to be fully compensated for this reduction under the same terms and conditions outlined in its contract.

In conclusion, Sherritt's 2024 performance demonstrates the company's resilience and adaptability in the face of external challenges. Despite facing numerous hurdles, Sherritt managed to meet guidance, maximize Cobalt Swap distributions, and receive significant dividends from its Power division. The company's strategic initiatives, cost reduction measures, and effective management of its divisions have contributed to its success. As Sherritt looks ahead, it remains committed to driving operational excellence and delivering value through its continued focus on efficiency and cost management, as well as its growth and other strategic initiatives.