Sherritt International Corporation · TSX:S
Sherritt International — Q2 2015 Earnings Presentation
20 slides from Sherritt International's earnings presentation, Jul 29, 2015
Slide 1: Second Quarter Results
Second Quarter Results l July 29, 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: Quarterly Results
QUARTERLY RESULTS David Pathe, President & CEO SHERRITT INTERNATIONAL CORPORATION 3
Slide 4: Q2 2015 Highlights
Q2 2015 Highlights Operational Results • 8,035 tonnes finished nickel in a quarter that included 6 additional days planned downtime at Fort Saskatchewan, and Ambatovy impacts as announced • Sustained the trend in improving cash costs, to US$4.12/lb at Moa and US$5.48/lb at Ambatovy Financial Results
Slide 5: Reducing NDCC Across the Metals Business Since Q4 2013
Reducing NDCC Across the Metals Business Since Q4 2013 $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 INTERNATIONAL CORP
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 (1) Wood Mackenzie cash cost (C1) d
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: 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 9: Operations Update
OPERATIONS UPDATE Steve Wood, EVP and Chief Operating Officer SHERRITT INTERNATIONAL CORPORATION 9 9
Slide 10: Moa JV Highlights
Moa JV Highlights • Finished nickel production of 3,877 tonnes (50% basis) in 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 • Nickel recovery 89% • Fertilizer margins were high, with average
Slide 11: Construction Continues at Acid Plant
Construction Continues at Acid Plant • A plant restart commenced in Q1 2015 • Photo as of July 9, 2015 SHERRITT INTERNATIONAL CORPORATION 11
Slide 12: Ambatovy JV: Back to One Thickener and Performing Well
Ambatovy JV: Back to One Thickener and Performing Well • Adjusted EBITDA of $(1.7) million • Net direct cash costs down to US$5.48 Cash Costs Continue to Improve Even with Unplanned Disruption in Q2 5,000 $7.19 $7.26 $5.74 $7.50 $6.98 4,500 $6.83 $7.00 4,000 3,500 $6.50 3,000 $6.00 2,500 $5.48 2,000
Slide 13: Oil and Gas in Q2
Oil and Gas in Q2 • Adjusted EBITDA of $29.9 million vs $21.5 million in Q1 • Cuba GWI production down 6% from Q1, but net working interest up 9% with higher cost recovery oil • Three wells left to evaluate (2 in the PSC Extension area, and one workover under our original PSCs) • Increased opex main
Slide 14: Power: Stable Adjusted EBITDA and Continued Repayments of the CSA Receivable
Power: Stable Adjusted EBITDA and Continued Repayments of the CSA Receivable • Electricity generation up 6% from Q1 • Adjusted EBITDA of $7.6 million vs $7.3 million in Q1 • Cash received in the form of CSA repayments consistent with Q1, but principal repayments not treated as operating cash flow El
Slide 15: Finance Update
FINANCE UPDATE Dean Chambers, Executive Vice President & CFO SHERRITT INTERNATIONAL CORPORATION 15
Slide 16: 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 17: 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 18: 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 19: 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 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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