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TORONTO — Sherritt International Corporation (“Sherritt” or the “Corporation”) (TSX:S) provides a further update with respect to its decision of May 7, 2026 to suspend its direct participation in joint venture activities in Cuba in light of the Executive Order issued by the U.S. administration on May 1, 2026 expanding its sanctions against Cuba (the “Executive Order”).
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Sherritt’s interests in Cuba consist of:
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- A 50/50 partnership with General Nickel Company S.A. (“GNC”) of Cuba (the “Moa JV”). The Moa JV is a vertically integrated joint venture that mines, processes and refines nickel and cobalt for sale worldwide (except in the United States). Three corporations, of which Sherritt and GNC each ultimately holds 50%, carry out the operations of the Moa JV with one such entity carrying out mining activities in Cuba and the other such entity arranging for the acquisition and processing of the mined ore and marketing the finished products (collectively, the “Moa JV Cuba Corporations”) and one entity owning and operating the nickel and cobalt refinery in Saskatchewan (the “Canada Refinery Corporation”).
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- Power generating assets held through Sherritt’s one-third interest in Energas S.A. (“Energas”), a Cuban joint venture established to process raw natural gas and generate electricity for sale to the Cuban national electrical grid.
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- Oil and gas interests in two production-sharing contracts, each in the exploration phase (the “PSCs”), and an ancillary drilling services contract.
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The Moa JV is governed by a shareholders’ agreement (the “Moa Shareholders’ Agreement”) which allows Sherritt to dissolve the Moa JV if U.S. sanctions are extended such that Sherritt cannot reasonably carry on a material business activity if it remains part of the Moa JV. The dissolution process under the Moa Shareholders’ Agreement requires the parties to mutually determine the fair market value of each of the Moa JV Cuba Corporations and the Canada Refinery Corporation and, if they cannot agree after three months, to have the matter determined by arbitration. After much deliberation, Sherritt has determined that the only way to preserve its ability to do business is by invoking its dissolution rights under the Moa Shareholders’ Agreement and implementing the related steps without delay.
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Accordingly, Sherritt intends to deliver notice to GNC that dissolution is required as a result of a material adverse change that is an immediate change under the Moa Shareholders’ Agreement and that there is inadequate time for arbitration. Given the urgency of the adverse impacts of the Executive Order on the Corporation, Sherritt requires that the dissolution of the Moa JV take place immediately so as to result in Sherritt becoming the sole owner of the Canada Refinery Corporation and in GNC becoming the sole owner of the Moa JV Cuba Corporations. In connection with the foregoing, Sherritt will relinquish its interests in the Moa JV Cuba Corporations. As the value of the Moa JV Cuba Corporation that owns the Moa JV mine is expected to be higher than the value of the Canada Refinery Corporation, the dissolution process is expected to result in a fair market value equalization payment owing from GNC to Sherritt, in addition to the approximately $277 million owed from GNC to Sherritt.
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Similarly, the Energas Association Agreement (the “Energas Agreement”) contains a dissolution provision in the event the parties are unable to perform specified obligations under the agreement or upon the occurrence of a force majeure. Sherritt has determined, in the circumstances, to surrender its interest in Energas and to give notice of dissolution pursuant to the Energas Agreement. Sherritt has also determined to surrender its interests in the PSCs and drilling services contract and intends to give notice to the relevant parties of the same. Sherritt anticipates that it will receive no consideration in respect of the foregoing interests.
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While both the Moa Shareholders’ Agreement and the Energas Agreement contemplate dissolution, the process contemplated by the agreements will take a minimum of several months and possibly several years. To expedite this process, Sherritt has determined to seek relief from the Alberta Court of King’s Bench to facilitate accelerated dissolution to the extent possible. Sherritt is scheduled to appear before the Court on May 19, 2026 to seek this relief.
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The intended outcome of the foregoing actions is to allow Sherritt to most definitively address the Executive Order by eliminating Sherritt’s Cuban interests. Further, the separation from Cuba may assist Sherritt in addressing issues that could arise from the Executive Order such as difficulties in obtaining an auditor or banking services. Sherritt has informed Cuban authorities of its intent to take these steps, and will work with its stakeholders to implement these steps as soon as practicable. There is no certainty however that such outcomes will be achieved.
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The Corporation will continue to provide information on material developments to its shareholders and other stakeholders.
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About Sherritt
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Sherritt is a world leader in using hydrometallurgical processes to mine and refine nickel and cobalt – metals deemed critical for the energy transition. Leveraging its technical expertise and decades of experience in critical minerals processing, Sherritt is committed to expanding domestic refining capacity and reducing reliance on foreign sources. The Corporation operates a strategically important refinery in Alberta, Canada, recognized as the only significant cobalt refinery and one of just three nickel refineries in North America.
English (US)