Sherritt International Inc. [TSX-S] reported a net loss from continuing operations of $24.8 million or $0.06 per share in the third quarter of 2023. That compared to a net loss of $26.9 million or $0.07 in the third quarter of 2022.
Revenue in the quarter was $36.4 million, up from $30.2 million in the equivalent quarter in 2022.
President and CEO Leon Binedell said the company is pleased with the progress of its expansion program at the Moa nickel and copper joint venture in Cuba.
The $77 million, two-phase expansion, which will increase production by up to 20% from the combined 34,710 tonnes produced in 2021, forms part of Sherritt’s strategy to establish the company as a leading green metals producer.
Toronto-based Sherritt is a world leader in the mining and refining of nickel and cobalt from lateritic ores. The company ranks as the largest independent energy producer in Cuba, with extensive oil and power operations across the island. Its key asset is a nickel mining joint venture with the Cuban government.
The 50/50 partnership, formed in 1994, involves the extraction and processing of nickel and cobalt from an open pit mine at Moa Bay in eastern Cuba.
The laterite nickel ore is processed on site, producing mixed sulphides (containing nickel and cobalt) that are shipped in bags to Halifax, N.S., and then transported by rail to a refinery in Fort Saskatchewan, Alberta.
The update on the expansion was released after the close of trading on November 1, 2023, when Sherritt closed at 42 cents. The shares trade in a 52-week range of 65 cents and 40 cents.
“The project remains on track and we expect reliable ore flows to the Moa plant with the completion of phase one early next year,’’ Binedell said.
“Once the full expansion is complete, we expect to achieve our higher production levels from 2025 onwards, benefitting us over a mine life that exceeds 20 years,’ he said.
However, Binedell sid the third quarter was one marked by challenges. Market conditions softened, particularly for nickel, and we faced a number of concurrent production challenges related to adverse weather, supply chain logistics and unplanned maintenance.’’
Binedell said the team at Moa Bay responded effectively to reduce the impacts to the company’s operations and largely resolved the maintenance outages by the end of the quarter.
“Despite the near-term headwinds in EV production and slower than expected supply chain development, we remain encouraged on our long-term outlook with the energy transition set do drive significant demand for the critical metals we produce which aligns well with the timing of our expansion,’’ he said.
Meanwhile, Sherritt’s share of finished nickel and cobalt production at the Moa joint venture was 3,841 tonnes and 410 tonnes in the third quarter, compared to 4,443 tonnes and 419 tonnes in the third quarter of 2022, respectively.
Finished nickel sales volumes were lower than the prior year period and finished production volumes in the current quarter primarily due to lower demand for nickel from steel mills after summer shutdowns and delayed sales by customers.