Sherritt finalizes transformative payment agreements with JV partners to settle outstanding receivables

On October 13, 2022, Sherritt International Corporation (“Sherritt”) announced it entered into innovative agreements with its Cuban partners for the repayment to Sherritt of outstanding Cuban receivables over five years, beginning January 1, 2023.

Under the agreements, the Moa Joint Venture (“Moa JV”) will prioritize the payment of dividends in the form of finished cobalt to each partner, up to an annual maximum, with any additional dividends in a given year to be distributed in cash. All cobalt dividends, and potentially additional cash dividends, will be redirected to Sherritt as payment to settle the receivables until an annual dollar limit, including the collection of any prior year shortfalls, has been reached. General Nickel Company (“GNC”), Sherritt’s Moa JV partner, agreed to assume certain liabilities of amounts owed to Sherritt by Union Cubapetroleo (“CUPET”) and Energas S.A. (“Energas”), under the agreements, in order to fully repay outstanding amounts over a five-year period.

As of January 1, 2023, the outstanding receivable amounts owing to Sherritt from Energas and CUPET – estimated to total C$361.9 million – will be assumed by GNC. As a result of the exchange, Sherritt will no longer have the responsibility for collection on the amounts solely from Energas and CUPET.

Cobalt Dividend Transactions

Under the cobalt dividend transactions, the Moa JV expects to distribute a maximum of 2,082 tonnes of finished cobalt annually to the joint venture’s partners as dividends. GNC will redirect its 50% share of the total Moa JV dividends (up to 1,041 tonnes), to Sherritt as repayment towards the outstanding receivables, subject conditions outlined in the agreements.

Upon receipt of the finished cobalt dividends, the title to both Sherritt and its partner’s redirected share of the finished cobalt will be transferred immediately to Sherritt and the physical product will be moved to a Sherritt warehouse in Fort Saskatchewan, from which Sherritt will sell the finished cobalt in the open market.

Further information can be found on Business Wire’s website.

Sherritt is a world leader in using hydrometallurgical process to mine and refine nickel and cobalt – metals essential for an electric future.