Sherritt International Corporation · TSX:S

Sherritt International — Q4 2016 Earnings Presentation

17 slides from Sherritt International's earnings presentation, Feb 17, 2017

  1. Slide 1: Fourth Quarter and 2016 Results

    Fourth Quarter and 2016 Results February 17, 2017 SHERRITT INTERNATIONAL CORPORATION 1

  2. Slide 2: Forward-looking statements

    Forward-looking statements This presentation 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”, “will”, “could”, “sho

  3. Slide 3: Q4 and 2016 full year highlights - Selected growth investments in a challenging environment

    Q4 and 2016 full year highlights - Selected growth investments in a challenging environment Key highlights • Improvements to unit operating costs • Lower capex (US$75 million) and 2016 combined free cash flow of ($112) million down 13% from 2015, despite a larger average drop in nickel and oil price

  4. Slide 4: After making multi year lows in Q1 2016, Nickel +18% and cobalt +37% in 2016

    After making multi year lows in Q1 2016 Nickel +18% and cobalt +37% in 2016 Nickel vs. 200-DMA's Cobalt vs. 200-DMA's $8.25 $21 (24%) in 2015 +37% in 2016 (42%) in 2015 +18% in 2016 $7.75 $19 $7.25 $6.75 $17 $6.25 $5.75 $15 $5.25 $13 $4.75 $4.25 $11 Avg. reference price Avg. reference price $3.75 20

  5. Slide 5: Nickel cash cost curve

    Nickel cash cost curve 2016 Nickel industry, normal C1 cash cost grouped by operation and ranked by cash cost (C1) existing operations and base case 15 25th percentile 50th percentile = US$3.00 = US$3.69 C1 Cash Costs (US$/lb) 10 Ambatovy: US$3.10 Moa: US$3.80 (Q4 2016) (Q4 2016) Ambatovy = US$4.27

  6. Slide 6: Fourth Quarter and Full Year Results

    FOURTH QUARTER AND FULL YEAR RESULTS SHERRITT INTERNATIONAL CORPORATION 6

  7. Slide 7: Metals highlights

    Metals highlights Nickel production (k tonnes) Moa: NDCC Avg. reference price: nickel (US$) 18.9 20.0 (19%) 16.9 16.5 16.8 16.8 $3.88 $3.42 $3.45 $5.37 $4.36 2015 2016 2017e Moa (50%) Ambatovy (40%) 2015 2016 2017e 2015 2016 Cobalt production (k tonnes) Ambatovy: NDCC Avg. reference price: cobalt (U

  8. Slide 8: Oil & Gas and Power highlights

    Oil & Gas and Power highlights Oil: Cuba GWI and total NWI Oil: Cuba unit operating costs Avg. reference price 18,257 Fuel Oil No. 6 (US$) 15,452 $11.50 12,000 $9.53 $9.75 11,158 (21%) 9,483 6,700 $40.68 $32.13 2015 2016 2017e GWI Production Cuba NWI Production All 2015 2016 2017e Power (331/3% basi

  9. Slide 9: Operational excellence and organizational effectiveness

    Operational excellence and organizational effectiveness Operational excellence program Two-pronged approach: • Initial deployment at Moa JV in 2016, followed by deployment at Ambatovy in 2017 Strategic alignment • Transformation employing Lean Thinking methodology to STRATEGY Top-down eliminate wast

  10. Slide 10: Financial Highlights

    FINANCIAL HIGHLIGHTS SHERRITT INTERNATIONAL CORPORATION 10

  11. Slide 11: NDCC drivers for Moa and Ambatovy

    NDCC drivers for Moa and Ambatovy Moa Ambatovy 2016 mining, processing and refining costs 2016 mining, processing and refining costs 14% 3% 16% Diesel 8% 4% 7% Diesel 7% Coal / fuel oil / electricity Coal / fuel oil / electricity 18% Sulphur / acid 12% Sulphur / acid Other variable costs Other varia

  12. Slide 12: Balance sheet cash from Dec. 31, 2015 to Dec. 31, 2016

    Balance sheet cash from Dec. 31, 2015 to Dec. 31, 2016 In million of dollars $72.1 $435.4 $14.1 ($84.6) ($40.2) $309.6 ($65.7) ($14.8) ($6.7) Dec. 31, 2015 - Adjusted Corporate Working capital Capital Debt Repayment Fees paid on Other Dec. 31, 2016 - Cash, cash operating cash change expenditure debe

  13. Slide 13: 2017 capital expenditure guidance - higher spending on capital due to the Oil and Gas growth plan

    2017 capital expenditure guidance - higher spending on capital due to the Oil and Gas growth plan US$ millions / ($ millions) 2016 guidance 2016 actual 2017 guidance Metals – Moa JV (50% basis), Fort Site (100% basis) US$38 US$25 (33) US$28 (38) Metals – Ambatovy JV (40% basis) US$25 US$25 (33) US$4

  14. Slide 14: Key Takeaways

    KEY TAKEAWAYS SHERRITT INTERNATIONAL CORPORATION 14

  15. Slide 15: Strategic priorities

    Strategic priorities 2016/17 strategic priorities Status at Dec 31, 2016 • Full year NDCC of US$3.42/lb at Moa, and US$4.27/lb at Ambatovy is a reduction at both divisions Focusing on core nickel • Acid plant construction completed on time and under budget, and business now in operation • In Q4, NDC

  16. Slide 16: Key takeaways

    Key takeaways • $310 million in cash and short-term investments, and no debt maturity before Q4 2021 • A long operating track record through all phases of the cycle • The largest and best established foreign mining and energy business in Cuba Nearing the end stages of Ambatovy negotiations and expec

  17. Slide 17: 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:INTERNATIONAL SHERRITT www.sherritt.comCORPORATION 17

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