TSX-listed nickel and cobalt refiner Sherritt International Corporation has maintained a strong performance throughout the first quarter of the year, ending it with improved output from the Moa joint venture, a C$5-million reduction in debt and its highest earnings in almost three years.
The company posted an increase of 602% year-on-year in adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) to C$30.2-million, reflecting strong production totals at Moa, in Cuba, improved nickel and cobalt prices and reduced administrative costs.
Adjusted Ebitda in the first quarter of 2020 amounted to C$4.3-million.
Sherritt’s share of finished nickel production at the Moa project was 4 188 t, up 9% year-on-year, while the company’s share of finished cobalt production was 477 t, up 19% year-on-year.
CEO David Pathe says the growth was largely attributable to high inventories of mixed sulphides at the refinery in Fort Saskatchewan, Alberta, and improved refinery reliability.
He adds, for context, that production totals in the first quarter of 2020 had been adversely impacted by the disruption of mixed sulphides deliveries to the refinery caused by rail blockades in Canada and by extended transit times for shipping vessels from Cuba.
Sherritt received $5-million in distributions from the Moa project and $5.7-million in Cuban energy payments.
The company’s administrative expenses, excluding depreciation and share-based compensation, declined by C$1.5-million in the first quarter of this year, compared with the first quarter of 2020.
Meanwhile, Sherritt’s emerging technologies business continues to make progress on several research projects, including enhancing a proprietary process to fully upgrade bitumen.
The enhanced process, which builds on previous research efforts, eliminates the need for diluent, increases the economic value of oil transported to downstream markets and provides a number of environmental benefits, including reduced carbon emissions and reduced coke waste.
Pathe notes that the company is also progressing with the patenting of a hydrometallurgical process for the treatment of high-arsenic copper concentrates, which offers superior environmental benefits by rendering the arsenic inert and reducing emissions relative to current methodologies.
“We also continue to engage our technologies team in the development of next-generation battery-grade nickel and cobalt production from lateritic ores to lower capital intensity, reduce emissions and eliminate waste.
“Over the longer term, Sherritt is well positioned to create significant value – both economic and environmental – as it capitalises on the growing demand for high-purity nickel as the market adoption of electric vehicles accelerates.”
The Moa project is a 50/50 joint venture between Sherritt and Cuba-based General Nickel.