Sherritt International Corporation · TSX:S
Sherritt International — Q3 2016 Earnings Presentation
16 slides from Sherritt International's earnings presentation, Oct 25, 2016
Slide 1: Third Quarter 2016 Results
Third Quarter 2016 Results October 25, 2016 SHERRITT INTERNATIONAL CORPORATION 1
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
Slide 3: An Active Quarter
An Active Quarter • Bond maturity: extended for 3 years, no maturity before Nov 2021 • Ambatovy project debt: 6 principal payment deferrals • US$59.6 million Cuba energy receipts, and ending cash of $345.2 million • Moa 3rd acid plant commissioned • First drilling underway in Block 10 • Nickel, WTI
Slide 4: Power and Oil have Supported Adj. EBITDA Year-to-Date
Power and Oil have Supported Adj. EBITDA Year-to-Date Metals Oil & Gas Power • 24,413 t of finished nickel • 9,925 bopd (NWI) / 15,782 (GWI - (Sherritt’s share) produced so far in Cuba) produced on average in 2016 • 670 GWh generated in 2016 YTD 2016 YTD Revenue and Adj. EBITDA 2016 YTD(1) Revenue(2
Slide 5: Nickel +17% so far this year
Nickel +17% so far this year Nickel vs. 60-, 100- and 200-DMA's $6.25 Main trends on the market - Mine closures in the Philippines following the $5.75 environmental audit - China's stainless steel demand growth higher than expected $5.25 $4.75 $4.25 $3.75 $3.25 Nickel 60-DMA 100-DMA 200-DMA SHERRITT
Slide 6: Cobalt +18% so far this year
Cobalt +18% so far this year Cobalt vs. 60-, 100- and 200-DMA's $14.0 $13.5 $13.0 $12.5 $12.0 $11.5 $11.0 $10.5 $10.0 $9.5 $9.0 Cobalt 60-DMA 100-DMA 200-DMA SHERRITT INTERNATIONAL CORPORATION 6
Slide 7: 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 50th percentile 10 = US$4.43 C1 Cash Costs (US$/lb) 25th percentile = US$2.86 Ambatovy = US$4.79 Moa = US$3.30 (YTD 2016) 5 (YTD 2016) 14% of operat
Slide 8: Third Quarter Results
THIRD QUARTER RESULTS SHERRITT INTERNATIONAL CORPORATION 8
Slide 9: Q3 2016 Nickel Highlights
Q3 2016 Nickel Highlights Moa Production (50% basis) Moa: NDCC Avg. Reference Price Nickel (US$) 4,521 $4.07 $3.55 4,295 $2.94 $4.78 4,145 $4.66 Q3 2015 Q2 2016 Q3 2016 Q3 2015 Q2 2016 Q3 2016 Ambatovy Production (40% basis) Ambatovy: NDCC $4.00 5,209 $5.12 $4.67 $4.24 3,620 3,669 Q3 2015 Q2 2016 Q3
Slide 10: Q3 2016 Oil & Gas and Power Highlights
Q3 2016 Oil & Gas and Power Highlights Oil: Cuba GWI and NWI Oil: Cuba Unit Operating Costs Avg. Reference Price Fuel Oil No. 6 (US$) 17,693 16,200 $9.30 $9.31 14,709 10,354 9,933 8,045 $38.11 $9.04 $34.88 $31.02 Q3 2015 Q2 2016 Q3 2016 GWI Production Cuba NWI Production Cuba Q3 2015 Q2 2016 Q3 2016
Slide 11: Financial Highlights
FINANCIAL HIGHLIGHTS SHERRITT INTERNATIONAL CORPORATION 11
Slide 12: Ambatovy Distributable Cash Flow
Ambatovy Distributable Cash Flow Revenue Generated by Ambatovy (100%) - Payment of Operating Expenses (100%) - 1. Interest @ LIBOR + 255 bps (post financial completion) Payment of Debt Service (100%) 2. Principal repayments made - semi-annually (June, Dec) 3. Deferral on six Ambatovy Funding of Main
Slide 13: No Maturity Until Q4 2021
No Maturity Until Q4 2021 Liquidity Strategy Bond Extension Completed in July • Q3 2016 liquidity: $345 million cash and short -term • 3-year extension of the maturity dates investments regarding $720 million of outstanding senior • Aim for cash flow neutral (post Capex) performance unsecured debent
Slide 14: Balance Sheet Cash from Dec. 31, 2015 to Sept. 30, 2016
Balance Sheet Cash from Dec. 31, 2015 to Sept. 30, 2016 500 $21.2 $10.1 $20.1 $31.7 450 $435.4 ($59.4) ($29.4) 400 (millions of dollars) $345.2 350 ($62.4) ($14.6) ($7.5) 300 250 200 150 100 Dec. 31, Adjusted Adjusted Adjusted Corporate Working Capital Debt Fees paid Obed/Other Sept. 30, 2015 - oper
Slide 15: Reporting on our 2016 Strategic Priorities
Reporting on our 2016 Strategic Priorities 2016 Strategic Priorities YTD Delivery • Year-to-date NDCC of US$3.30/lb at Moa, and US$4.79/lb at Ambatovy is a reduction at both divisions • Moa acid plant in operation, NDCC benefit expected Q4 and Focusing on Core Nickel Business 2017 onward • Ambatovy
Slide 16: 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 16
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