TORONTO (miningweekly.com) – TSX-listed nickel and cobalt producer Sherritt International reported a net loss for the three months ended June 30, of C$30.1-million, or C$0.10 a share, compared with C$10.7-million, or C$0.04 a share, in the same period in the prior year.

Earnings were mainly impacted on by the company’s attributable share of losses in Ambatovy, in Madagascar, which consisted of significant depletion, depreciation and amortisation charges totalling C$40.3-million. The company owns a 40% stake in the project, which is still ramping up operations.

Analysts had on average expected adjusted earnings a share of C$0.07, on revenue of C$124.8-million.

The company reported a 7% year-on-year rise in revenue to C$130.2-million, boosted by significantly higher nickel and cobalt sales volumes, reflecting Ambatovy operations gaining traction.

For the quarter, finished nickel sales rose 86% to 7 277 t and finished cobalt sales rose 66% to 626 t. The average price for nickel rose 29% to $8.92/lb, as market participants expect a nickel supply deficit to emerge as a result of the Indonesian export ban on raw ore exports. Cobalt prices rose 9% to $14.01/lb.

Sherritt said nickel and cobalt production at Ambatovy were slightly better than the first quarter and increased 26% and 14% respectively over the comparable prior-year period.

During the quarter, the company said it continued to evaluate its operations and capital allocation for operating efficiencies and had realised C$25-million in savings from the start of the year.

"During the second quarter, we made clear steps forward in executing our long-term plan to refocus on base metals and our Cuban oil business. The strong nickel market has had positive benefits in our metals business and we remain committed to ramping up at Ambatovy towards financial completion next year.

“In Cuba, we achieved a significant milestone with the approval of an important oil PSC [production sharing contract] that will extend our oil and gas operations and continue to strengthen our relationship with the country,” president and CEO David Pathe said on Wednesday.

During the quarter, Sherritt completed a C$946-million divestment of its Canadian coal business, which signalled an exit from the thermal coal industry so that the company could focus on its core strengths.

In May, an activist shareholder failed in an attempt to join the Sherritt board, after the majority of shareholders backed all nine of the management's director nominees during the company's annual general meeting.

Sherritt shares on Thursday traded lower at C$4.55 apiece.