Sherritt International Corporation · TSX:S
Sherritt International — Bank of America Merrill Lynch Canada Mining Conference 2015
20 slides from Sherritt International's conference presentation, Sep 11, 2015
Slide 1: Bank of America Merrill Lynch Canada Mining Conference
Bank of America Merrill Lynch Canada Mining Conference September 11, 2015 SHERRITT INTERNATIONAL CORPORATION 1
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 & CEO
David Pathe, President & CEO SHERRITT INTERNATIONAL CORPORATION 3
Slide 4: Sherritt Overview
Sherritt Overview A global Top 10 nickel producer, expecting to produce ~80,000 tonnes finished nickel (100% basis) this year ~ $312 million market cap (Sept 9, 2015) Financial Highlights (C$ millions unless otherwise noted) 2013 (1) 2014 (1) YTD (1) Revenue $ 448.5 $ 455.6 $ 182.5 Adjusted EBITDA 2
Slide 5: An HPAL producer with steadily improving net direct cash costs
An HPAL producer with steadily improving net direct cash costs $7.19 $7.26 $7.50 $6.83 $6.98 $7.00 $6.50 $5.74 U.S. $/lb Ni $6.00 $5.48 $5.30 $5.25 $5.50 $5.05 $5.00 $4.44 $4.36 $4.50 $4.12 $4.00 $3.50 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Moa JV & Fort Site Ambatovy JV SHERRITT INTERNATIO
Slide 6: Still Competitive on the Cash Cost Curve
(1) Still Competitive on the Cash Cost Curve $12 $10 Ambatovy $8 50th percentile = US$5.23 Moa US$5.74 US$4.36 (Q1 2015) $6 (Q1 2015) $4 Ambatovy Moa US$5.48 $2 US$4.12 (Q2 2015) (Q2 2015) $0 -$2 -$4 -$6 -$8 -$10 50th Percentile of Q1 cash cost curve was U.S.$5.51, coming down with lower fuel prices
Slide 7: Nickel Market 2015-2019
Nickel Market 2015-2019 World Supply/Demand 2015-2019 • LME inventories topping out? 2,300 • Chinese NPI production down 14% YoY with further reductions likely as ore 2,200 stockpiles decline 2,100 • Chinese imports of refined nickel hit a six year high as reported July 24, 2,000 2015(1) • Indonesia
Slide 8: Moa JV (50%)
Moa JV (50%) First production 1994, expected mine life ~15 years remaining • Finished nickel production of 3,877 tonnes (50% basis) in Q2, a quarter that included a once-in-ten year maintenance shutdown in Fort Saskatchewan • Cash costs declined for the second consecutive quarter to US$4.12/lb • Nic
Slide 9: Acid Plant under Construction
Acid Plant under Construction • Acid plant construction commenced in Q1 2015 • Photo as of July 9, 2015 SHERRITT INTERNATIONAL CORPORATION 9
Slide 10: Ambatovy JV (40%): "90 for 90" Again at August 31
Ambatovy JV (40%): “90 for 90” Again at August 31 First commercial production Q1 2014, ~27 years mine life remaining • August monthly production a record at 4,732 tonnes (100% basis) • Adjusted EBITDA of $(1.7) million in Q2 • Net direct cash costs down to US$5.48 Cash Costs Continue to Improve Even
Slide 11: Approaching Financial Completion
Approaching Financial Completion • Requirement for financial completion by September 30, 2015 • 10 certificates required, with 2 Production Environmental Certificate Certificate remaining Pipeline Efficiency • 3 received Independent Engineer Certificate Capacity Certificate sign-off during Q2 • Upon
Slide 12: Oil and Gas
Oil and Gas Over 200 million barrels of heavy oil produced in Cuba (gross working interest) since 1992 • Adjusted EBITDA of $29.9 million Q2 vs $21.5 million in Q1 Cuba Production – Gross Working-Interest Unit Operating Costs – Cuba ($ per boe) 19,528 (5%) +32% 18,607 $10.13 $7.69 Q2 2014 Q2 2015 Q2
Slide 13: Power: Stable Adjusted EBITDA and Continued Repayments of the CSA Receivable
Power: Stable Adjusted EBITDA and Continued Repayments of the CSA Receivable A one third interest in Cuban power generation company Energas, producing since 1998 • Adjusted EBITDA of $7.6 million in Q2 Electricity Generation (GWh) Unit Operating Costs ($/MWh) 224 224 +9% $16.86 $15.62 Q2 2014 Q2 201
Slide 14: Total Debt vs. Recourse Debt
Total Debt vs. Recourse Debt As at June 30, 2015 ($ millions) Total Recourse Senior unsecured notes (2018, 2020, 2022) $733 $733 Ambatovy partner loans 120 120 Ambatovy additional partner loans 1,132 - Other 7 7 Total debt 1,992 860 Cash and short term investments 398 Net debt 1,594 • Sherritt share
Slide 15: Ambatovy Distributable Cash Flow
Ambatovy Distributable Cash Flow Revenue Generated by Ambatovy (100%) subtract Payment of Operating Expenses (100%) subtract 1. Interest @ LIBOR + 255 bps (post financial Payment of Debt Service (2 parts) (100%) completion) 2. Principal repayments made semi-annually subtract (June, Dec) Funding of M
Slide 16: APPENDIX
APPENDIX SHERRITT INTERNATIONAL CORPORATION 16
Slide 17: Balance sheet cash from Q1 to Q2 2015
Balance sheet cash from Q1 to Q2 2015 550 26.7 500 477.7 (millions of dollars) 28.6 450 (63.7) 21.2 398.3 400 (19.9) (43.9) (28) 350 300 March 31, Other Working Interest paid Interest and Ambatovy Capital Net proceeds June 30, 2015 2015 - Cash, operating capital on Principal funding expenditure - fr
Slide 18: Combined Adjusted Operating Cash Flow
Combined Adjusted Operating Cash Flow Reconciliation from Q1 2015 to Q2 2015 60 56 3 50 (6) (3) (millions of dollars) 40 (15) 30 1 26 20 (11) 10 0 Combined Lower Lower Moa and Higher Oil & Lower Energas Higher interest Higher Combined adjusted Ambatovy Fort Site Gas adjusted CSA interest paid on Cor
Slide 19: Net Loss Reconciliation from Q1 2015 to Q2 2015
Net Loss Reconciliation from Q1 2015 to Q2 2015 0.00 -0.05 0.06 (0.10) -0.10 0.04 (Cents Per Share) -0.15 0.06 -0.20 (0.18) 0.03 -0.25 (0.19) (0.01) (0.07) -0.30 -0.35 -0.40 Q1 2015 net Higher Higher Oil Lower equityGain on sale Tax Lower Tax Q2 2015 net loss equity loss and Gas earnings of Corporat
Slide 20: Sherritt International Corporation
Sherritt International Corporation 181 Bay Street, 26th Floor, Brookfield Place, Toronto, Ontario, Canada M4T 2Y7 Investor Relations Flora Wood Telephone: 416.935.2457 Toll-Free: 1.800.704.6698 Email: investor@sherritt.com Website: www.sherritt.com SHERRITT INTERNATIONAL CORPORATION 20
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