Sherritt International Corp Reports Weaker Q1 Result, Provides Outlook
Sherritt International Corporation (S.TO) today reported net earnings of $23.1 million ($0.08 per share, basic), compared to net earnings of $32.4 million ($0.11 per share, basic) for first-quarter 2012. Earnings were lower quarter-over-quarter due to lower reference pricing and sales volumes for nickel, cobalt, export coal, and oil, resulting from continued downward pressure on pricing and demand in these commodity markets.
2013 Outlook: "There are no material changes to the 2013 Outlook on production, royalties and spending on capital presented in February 2013. In Power, as a result of delays encountered with equipment suppliers and with obtaining work visas in Cuba, the 150 MW Boca de Jaruco Combined Cycle Project is now scheduled to begin production in third-quarter 2013. Despite the change in the production start date, the Project is still expected to be fully operational by the end of the year and to remain within the total cost estimate of $271.0 million."
Sheritt is involved in the mining and refining of nickel from lateritic ores with projects and operations in Canada, Cuba, Indonesia and Madagascar.
Operating cash flow for first-quarter 2013 was $48.0 million, compared to $100.4 million in first-quarter 2012.
Spending on capital and intangibles relating to operations totaled $51.6 million for first-quarter 2013, compared to $40.9 million in first-quarter 2012.
Cash, cash equivalents and short-term investments were $442.2 million at March 31, 2013.
Sales volumes for first-quarter 2013 (Sherritt's share) totaled 8.6 million pounds of finished nickel, 0.9 million pounds of finished cobalt, 6.3 million tonnes of thermal coal, 1.0 million barrels of oil and 160 GWh of electricity.
Sales volumes in first-quarter 2013 do not include sales from the Ambatovy Joint Venture. Finished metal sold from the Ambatovy Joint Venture will not be categorized as sales volumes until the declaration of commercial production, defined as 70% of ore throughput of nameplate capacity in the Pressure Acid Leach ( PAL ) circuit over a thirty-day period.
In Metals, record quarterly finished metal production (13,632 tonnes of finished nickel and 1,350 tonnes of cobalt, 100% basis) was achieved, due to the addition of production from the Ambatovy Joint Venture.
At Ambatovy, the monthly average ore throughput in the Pressure Acid Leach ( PAL ) Circuit reached 53% in March 2013.
The successful ramp-up of Ambatovy continued during the quarter, as all five autoclaves in the PAL circuit were operable during the quarter.
In September 2012, Ambatovy received a six-month authorization (Operating Permit) to commercially operate the processing plant in Toamasina, Madagascar, which was to automatically convert to a life-of-mine Operating Permit. On March 12, 2013, Madagascar's Minister of Mines confirmed to Ambatovy its right to continue to operate in accordance with its Operating Permit.
In Coal, full export capacity for Mountain Operations resumed during the quarter, as damage to Berth 1 at Westshore Terminals was repaired and operations at the berth resumed.