Sherritt International Corporation · TSX:S
Sherritt International — Q3 2014 Earnings Presentation
21 slides from Sherritt International's earnings presentation, Oct 29, 2014
Slide 1: Q3 2014 Highlights
Q3 2014 HIGHLIGHTS October 29, 2014
Slide 2: Cautionary Statement on Forward-Looking Information
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION This document contains certain forward-looking statements. Forward-looking statements can generally be identified by the use of statements that include such words as “believe”, “expect”, “anticipate”, “intend”, “plan”, “forecast”, “likely”, “may”,
Slide 3: David Pathe, President and CEO
David Pathe President and CEO
Slide 4: Strategic Highlights
STRATEGIC HIGHLIGHTS Financial Discipline Operational Achievements Cost Reductions Successfully Completed Moa Oil and Gas Cost Reductions Complex Refinancing in • Established new quarterly • Sherritt implements • Commenced development October production record staff restructuring drilling program on
Slide 5: Moa: Strong Quarter Driven by Record Production and Higher Metal Prices
MOA: STRONG QUARTER DRIVEN BY RECORD PRODUCTION AND HIGHER METAL PRICES Q3 2014 Highlights • Record quarterly production • Average realized metal prices increased year over year • Adjusted EBITDA grew by 253% ($20 million) compared to Q3 2013 • Executed the key technology supply contract for the aci
Slide 6: Ambatovy: Ramping Up the World's Largest Lateritic Finished Nickel Operation
AMBATOVY: RAMPING UP THE WORLD’S LARGEST LATERITIC FINISHED NICKEL OPERATION Q3 2014 Highlights • Record quarterly production • C1 nickel costs consistent with previous guidance for current throughput levels • Positive adjusted EBITDA for second consecutive quarter • Improvement in autoclave operati
Slide 7: Ambatovy: Ramping Up the World's Largest Lateritic Finished Nickel Operation
AMBATOVY: RAMPING UP THE WORLD’S LARGEST LATERITIC FINISHED NICKEL OPERATION B A Counter Current Decantation Raw Liquor Neutralization 7
Slide 8: Ambatovy: All Resources Focused on the PAL System
AMBATOVY: ALL RESOURCES FOCUSED ON THE PAL SYSTEM Production Component Status Mining Port & Rail Utilities Systems Refinery } Area of focus Work focused PAL Systems on CCD Solid-liquid separation carried out by counter-current decantation (CCD) Road Map to Increasing PAL Production Throughput and Ac
Slide 9: Ambatovy: Certificates Away from Financial Completion
AMBATOVY: 5 CERTIFICATES AWAY FROM FINANCIAL COMPLETION Production Environmental Certificate Certificate Efficiency Pipeline Certificate Capacity Certificate Legal and Other Conditions FINANCIAL Port Capacity Certificate COMPLETION Certificate Financial Marketing Certificate Certificate Physical Min
Slide 10: Ambatovy: Updated Technical Report
AMBATOVY: UPDATED TECHNICAL REPORT Key Takeaways • Reserves increased and overall grades for reserves decreased from 0.94% Ni to 0.85% Ni and 0.08% Co to 0.07% Co Targeted C1 Costs • Estimated metal content is marginally higher as $12 a result of greater ore tonnages despite lower $10 $9 - $11 overa
Slide 11: Long-Term Fundamentals Remain Strong for Nickel
LONG-TERM FUNDAMENTALS REMAIN STRONG FOR NICKEL Nickel Market Synopsis • Nickel market remains in surplus position with LME inventories at record highs Nickel Supply and Demand Outlook • Strong demand for nickel continues • Nickel market anticipated to move from surplus to deficit in near term due t
Slide 12: Oil and Gas: Work Begins on Extending Production Profile
OIL AND GAS: WORK BEGINS ON EXTENDING PRODUCTION PROFILE Q3 2014 Highlights • Production and costs negatively impacted by workover • Average-realized price for Cuban oil decreased by $1.09 per barrel year over year due to market pricing • Adjusted EBITDA declined by 18% • Launched drilling program i
Slide 13: Power: Benefiting from Increased Production
POWER: BENEFITING FROM INCREASED PRODUCTION Q3 2014 Highlights • Electricity production increased 72% when compared to the prior year due to incremental production from Boca de Jaruco project • Average-realized price of electricity was 7% higher than the same period last year • Operating costs decre
Slide 14: Executing Against Our Stated Priorities
EXECUTING AGAINST OUR STATED PRIORITIES Strategic Priority Initiatives Completed Near-Term Objectives Focus on core nickel business • Sold Coal business • Moa JV – complete acid plant • Moa JV – Technology services • Ambatovy target is for 90% contract in place for 2,000 tonne per production for 90
Slide 15: 2014 Outlook
2014 OUTLOOK Production volumes for the Moa Joint Venture have been revised for mixed sulphides and nickel reflecting actual production for the first nine months. Original Outlook as of 2014E Outlook September 30, 2014 PRODUCTION VOLUMES (tonnes) Mixed sulphides (tonnes, Ni+Co contained, 100% basis)
Slide 16: Dean Chambers, EVP and CFO
Dean Chambers EVP and CFO
Slide 17: Q3 2014: Reflects Solid Underlying Operational Progress
Q3 2014: REFLECTS SOLID UNDERLYING OPERATIONAL PROGRESS Adjusted Continuing Operating Adjusted Revenue ($ millions) Adjusted EBITDA ($ millions) Cash Flow ($ Per Share) $302 $0.15 $92 $0.12 $195 $13(1) $59 $78.9 Q3 2013 Q3 2014 Q3 2013 Q3 2014 Q3 2013 Q3 2014 $59 $79 Notes: (1) On August 1, 2014, th
Slide 18: Q3 2014: Net Loss from Continuing Operations Similar to Q2 2014
Q3 2014: NET LOSS FROM CONTINUING OPERATIONS SIMILAR TO Q2 2014 18
Slide 19: Strengthening the Balance Sheet
STRENGTHENING THE BALANCE SHEET Debt refinancing completed reduced debt by $425 million, extends maturities and reduces principal amounts outstanding. ($ millions, except as noted, as at) September 30, 2014 September 30, 2014 Adjusted (1) Cash & short term investments 980.3 504.0 Total debt 2,214.0
Slide 20: Additional Financial Disclosure
ADDITIONAL FINANCIAL DISCLOSURE Updating Calculation of Oil & Gas Unit Operating Costs • Commencing this quarter, Sherritt is reporting average unit operating costs for Cuba on a gross barrel basis for its Oil and Gas business • Approach is more relevant as operating costs represent costs to produce
Slide 21: Sherritt International Corporation
Sherritt International Corporation 1133 Yonge Street, Toronto, Ontario, Canada M4T 2Y7 Media & Investor Relations Sean McCaughan Telephone: 416.935.2451 Toll-Free: 1.800.704.6698 Email: investor@sherritt.com Website: www.sherritt.com 21
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