MIRA INFORM REPORT

Report No. :	497186
Report Date :	16.03.2018

IDENTIFICATION DETAILS

Name :	SHERRITT INTERNATIONAL CORPORATION
Registered Office :	181 Bay Street, Brookfield Place, 26th Floor, Toronto, Ontario M5J 2T3
Country :	Canada
Financials (as on) :	31.12.2017
Date of Incorporation :	1927
Legal Form :	Corporation
Line of Business :	Subject is engages in mining and refining nickel from lateritic ores in Canada, Cuba, and Madagascar.
No. of Employees :	6,499

RATING & COMMENTS

(Mira Inform has adopted New Rating mechanism w.e.f. 23^rd January 2017)

MIRA’s Rating :

A+

Credit Rating	Explanation	Rating Comments
A+	Low Risk	Business dealings permissible with low risk of default

Maximum Credit Limit :	USD 2 000 000
Status :	Good
Payment Behaviour :	Regular
Litigation :	--

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List

Country Name	Previous Rating (30.09.2017)	Current Rating (31.12.2017)
Canada	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low Risk	A2
Moderately Low Risk	B1
Moderate Risk	B2
Moderately High Risk	C1
High Risk	C2
Very High Risk	D

CANADA - ECONOMIC OVERVIEW

Canada resembles the US in its market-oriented economic system, pattern of production, and high living standards. Since World War II, the impressive growth of the manufacturing, mining, and service sectors has transformed the nation from a largely rural economy into one primarily industrial and urban. Canada has a large oil and natural gas sector with the majority of crude oil production derived from oil sands in the western provinces, especially Alberta. Canada now ranks third in the world in proved oil reserves behind Venezuela and Saudi Arabia and is the world’s sixth-largest oil producer.

The 1989 Canada-US Free Trade Agreement and the 1994 North American Free Trade Agreement (which includes Mexico) dramatically increased trade and economic integration between the US and Canada. Canada and the US enjoy the world’s most comprehensive and highly balanced bilateral trade and investment relationship, with merchandise trade of $544 billion in 2016, services trade of over $80 billion, and two-way investment stocks of nearly $700 billion. Over three-fourths of Canada’s exports are destined for the US each year. Canada is the largest foreign supplier of energy to the US, including oil, natural gas, and electric power, and a top source of US uranium imports.

Given its abundant natural resources, highly skilled labor force, and modern capital stock, Canada enjoyed solid economic growth from 1993 through 2007. The global economic crisis of 2007-08 moved the Canadian economy into sharp recession by late 2008, and Ottawa posted its first fiscal deficit in 2009 after 12 years of surplus. Canada's major banks emerged from the financial crisis of 2008-09 among the strongest in the world, owing to the financial sector's tradition of conservative lending practices and strong capitalization. Since the fall in world oil prices in 2014, Canada has achieved modest economic growth.

Source : CIA

STATUTORY INFORMATION

Legal Name:

SHERRITT INTERNATIONAL CORPORATION

Trade Name:

SHERRITT INTERNATIONAL CORPORATION

ID:

CA9779850

Date Created:

1927

Date Incorporated:

2016-06-03

Legal Address:

181 Bay Street, Brookfield Place

26th Floor

Toronto

Ontario

M5J 2T3

Operative Address:

Brookfield Place

26th Floor

181 Bay Street

Toronto, ON M5J 2T3

Canada

Telephone:

416-924-4551

Fax:

416-924-5015

Legal Form:

Corporation

Email:

Investor@sherritt.com

Registered in:

CANADA

Website:

www.sherritt.com

Contact:

Mr. David V. Pathe - Chairman, President & CEO

Staff:

6,499

Activity:

SIC Code 3339, Primary Smelting and Refining of Nonferrous Metals, Except Copper and Aluminum

NAICS Code 331419, Primary Smelting and Refining of Nonferrous Metal (except Copper and Aluminum)

History:

Sherritt International Corporation was founded in 1927 and is based in Toronto, Canada.

Key Developments:

Sherritt Reduces Debt by $120 Million Through Dutch Auction on Debentures

Feb 16 18

Sherritt International Corporation announced the results of its modified dutch auction tender offer to purchase for cash its outstanding 8.0% Senior Unsecured Debentures due 2021, 7.5% Senior Unsecured Debentures due in 2023 and 7.875% Senior Unsecured Notes due in 2025 (collectively, the 'Notes') In accordance with the terms of the Offers (collectively, the 'Offers'), Sherritt has elected to purchase an aggregate total of $121,223,000 principal amount of Notes at an aggregate cost of $110,331,090 plus accrued interest. All Notes validly tendered at or below the Clearing Price will be accepted for purchase by Sherritt subject to the conditions set forth in the Offer to Purchase. Payment for Notes accepted for purchase will be made by Sherritt on the settlement date, which is expected to be on or about February 16, 2018. Following the settlement of the Offers, any Notes that are purchased in the Offers will be retired and cancelled and no longer remain outstanding. All Notes not accepted for purchase by Sherritt will be returned to the Tendering Holder. Following completion of the Offers, Sherritt will have an aggregate total of $598,777,000 of Notes outstanding.

Sherritt Appoints Maryse Bélanger to Its Board of Directors

Feb 7 18

Sherritt International Corporation announced the appointment of Maryse Bélanger to its Board of Directors, effective. Currently, Ms. Bélanger is Chief Operating Officer of Atlantic Gold Corp., where she is responsible for the overall operational and technical management of the company.

PRINCIPAL ACTIVITY

Sherritt International Corporation engages in mining and refining nickel from lateritic ores in Canada, Cuba, and Madagascar.

Products/Services description:

The company operates through Moa JV and Fort Site, Ambatovy JV, Metals Other, Oil and Gas, Power, and Corporate and Other segments. The Moa JV and Fort Site segment is involved in mining, processing, and refining of nickel and cobalt; and the production and sale of agricultural fertilizers. The Ambatovy JV segment operates an integrated nickel and cobalt facility. The Metals Other segment buys, markets, and sells nickel. The Oil and Gas segment engages in the oil and gas operations in Cuba, as well as the exploration and development of oil and gas in Cuba, Spain, and Pakistan. The Power segment constructs and operates primarily steam electricity generating plants that provide electricity in Cuba. This segment has an electrical generating capacity of 506 MW. The Corporate and Other segment engages in metallurgical technology business. The company also operates fertilizer, sulphuric acid, utilities, and storage facilities in Fort Saskatchewan, Canada.

Brands:

SHERRITT

Sales are:

Wholesale

Clients:

Avis Metal Industries Ltd.

Pantos Logistics (China) CO., LTD

Suppliers:

Pluz SA De Cv

Mayekawa De Mexico S.A. De C.V.

Bhp Billiton Nickel West Pty Ltd

Operations area:

National and International

The company imports from

MEXICO

AUSTRALIA

The company exports to

INDIA

CHINA

The subject employs

6,499 employees

Payments:

Regular

LOCATION

Headquarters :

Brookfield Place

26th Floor

181 Bay Street

Toronto, ON M5J 2T3

Canada

Branches:

No other branches were found.

Related Companies:

Moa Joint Venture ( Joint venture 50% owned)

Composed of the following operating companies:

International Cobalt Company Inc. Bahamas 50%

Moa Nickel S.A. Cuba 50%

The Cobalt Refinery Company Inc. Canada 50%

Ambatovy Joint Venture

Composed of the following operating companies:

Ambatovy Minerals S.A. Madagascar 40%, 12%

Dynatec Madagascar S.A. Madagascar 40%, 12%

Sherritt International (Cuba) Oil and Gas Ltd. Subsidiary Cuba 100%

Sherritt International Oil and Gas Ltd. Subsidiary Canada 100%

Energas S.A. (Energas) Joint operation Cuba 33⅓%

GROUP STRUCTURE AND SUBSIDIARY COMPANIES

Listed at the stock exchange:

YES: Sherritt International Corporation (S.TO)

Market Capital:

508M

Outstanding Shares:

396.88M

Shareholders:

Top Mutual Fund Holders
Holder	Shares
DFA International Small Cap Value Portfolio	5,842,314
DFA Investment Dimensions-Canadian Small Company Series	2,511,161
DFA International Core Equity Portfolio	1,824,664
First Trust RiverFront Dynamic Developed International ETF	1,798,841
First Trust RiverFront Dynamic Asia Pacific ETF	494,267
DFA International Vector Equity Port	263,069
SPDR (R) Idx Shares-SPDR (R) S&P (R) International Small Cap ETF	164,688
DFA T.A. World Ex U.S. Core Equity Portfolio	155,603
Brighthouse Fds Tr II-BH/Dimensional International Small Co Port	132,332
DFA Investment Dimensions-World Ex U.S. Core Equity Port	128,802

Management:

Mr. David V. Pathe - Chairman, President & CEO

Mr. Stephen James Wood - Chief Operating Officer and Executive Vice President

Mr. Timothy Dobson - Senior Vice President of Metals

Mr. Elvin Saruk - Senior Vice President of Oil, Gas & Power

FINANCIAL INFORMATION

We attach company’s last financial statements.

Sherritt International Corporation announced unaudited consolidated earnings and production results for the fourth quarter and full year ended December 31, 2017.

For the quarter, the company reported combined revenue was CAD 223.8 million against CAD 240.3 million a year ago. Net earnings for the period was CAD 537.8 million against net loss for the period of CAD 106.7 million a year ago. Adjusted ebitda was CAD 49.6 million against CAD 37.4 million a year ago. Net cash used in operating activities was CAD 33.9 million against CAD 22.6 million a year ago.

Net earnings from continuing operations per share was CAD 1.85 against net loss from continuing operations per share of CAD 0.37 a year ago. Net earnings from continuing operations was CAD 552.9 million against net loss from continuing operations of CAD 109.6 million a year ago.

Adjusted net loss from continuing operations was CAD 50.2 million against CAD 81.3 million a year ago. Adjusted net loss from continuing operations per share was CAD 0.17 against CAD 0.28 a year ago. Spending on capital (excluding Corporate) was CAD 86 million For the full year, the company reported combined revenue was CAD 917.5 million against CAD 820.2 million a year ago.

Net earnings for the period was CAD 293.8 million against net loss for the period of CAD 378.9 million a year ago. Adjusted ebitda was CAD 149.8 million against CAD 40 million a year ago. Net cash used in operating activities was CAD 9.6 million against cash provided by continuing operations of CAD 1.6 million a year ago.

Net earnings from continuing operations per share was CAD 1.04 against net loss from continuing operations per share of CAD 1.3 a year ago.

Net earnings from continuing operations was CAD 308.9 million against net loss from continuing operations of CAD 381.8 million a year ago. Adjusted net loss from continuing operations was CAD 317.1 million against CAD 427.9 million a year ago. Adjusted net loss from continuing operations per share was CAD 1.07 against CAD 1.46 a year ago.

Gross working-interest oil production in fourth quarter 2017 in Cuba was 10,378 barrels of oil per day (bopd), down from 14,470 bopd for the comparable period of 2016. The decrease was primarily due to the expiration of the Varadero West Production Sharing Contract (PSC) in November 2017 and natural reservoir declines. Gross working-interest oil production on a year basis for 2017 was 13,479 bopd, in line with guidance for the year. For the year 2018, spending on capital (excluding Corporate) to be CAD 120 million.

LEGAL FILINGS

PATENTS

Recovering Metal Values from a Leach Residue

Publication number: 20100300249

Abstract: There is also provided a method of treating a metalliferrous material. The method includes providing a metalliferrous material including nickel, cobalt, and iron. At least a fraction of the metalliferrous material is leached with an aqueous solution including dissolved sulphuric acid and dissolved sulphur dioxide in a reaction zone so as to effect production of a leachant including nickel sulphate, cobalt sulphate, and iron sulphate. The leachant is contacted with a reagent material in a reaction zone, wherein the reagent material is aqueous ammonia solution, so as to effect production of a reaction product including a product solution component and a solid residue component. The nickel and cobalt are concentrated in the product solution component, and the iron is concentration in the solid residue component.

Type: Application

Filed: May 27, 2009

Publication date: December 2, 2010

Applicant: SHERRITT INTERNATIONAL CORPORATION

Inventors: James Budac, Dennis Belton, Russ Kofluk

Process for recovery of cobalt by selective precipitation of cobalt-calcium double salt

Patent number: 6264904

Abstract: There is provided a process for the recovery of cobalt as cobalt (III) hexammine sulphate, comprising adding an effective amount of a calcium sulphate slurry to an ammoniacal ammonium sulphate solution containing cobalt (III) hexammine sulphate to thereby selectively precipitate a cobalt (III) hexammine sulphate-calcium sulphate double salt. The solution containing other base metal impurities is separated from the cobalt (III) hexammine sulphate-calcium sulphate double salt precipitate. An effective amount of an ammonium carbonate containing solution is added to the double salt precipitate to thereby redissolve cobalt (III) hexammine sulphate and precipitate calcium carbonate.

Type: Grant

Filed: April 11, 2000

Date of Patent: July 24, 2001

Assignee: Sherritt International Corporation

Inventor: Gavin Kerry Wyllie Freeman

Hydrogen Reduction of Metal Sulphate Solutions for Decreased Silicon in Metal Powder

Publication number: 20170106450

Abstract: Process to decrease silicon content of metal powder produced by hydrogen reduction from ammoniacal ammonium sulphate solutions containing metal ammine complexes, wherein metal (Me) is Ni, Co, or Cu. The process controls the precipitation of metal hydroxide, which is found to be an effective scavenger for silicon. Silicon is preferentially removed from metal diammine sulphate-containing solutions by precipitating with a small amount of a metal hydroxide, and then separating the silicon-bearing metal hydroxide precipitate from the solution. This solution, from which the silicon impurity has been removed with the metal hydroxide precipitate, can then be reduced in one or more densification cycles with a reducing gas to produce an elemental metal powder having a decreased silicon content. Alternatively, the solution is reduced to produce a low silicon metal powder seed material for the first of the one or more densification cycles.

Type: Application

Filed: October 14, 2016

Publication date: April 20, 2017

Applicant: Sherritt International Corporation

Inventor: Fu QIN

GOVERNMENT CONTRACTS

No records found.

CASES

1.

Sherritt International Corporation (Re), 2006 BCSECCOM 184 (CanLII) — 2006-03-29

British Columbia Securities Commission — British Columbia

bid — aggregate principal amount of tendered — issuer — price — will

2.

Sherritt International Corporation (Re), 2005 BCSECCOM 178 (CanLII) — 2005-03-09

British Columbia Securities Commission — British Columbia

issuer — bid — liquid — valuation — market

3.

Sherritt International Corporation (Re), 2007 BCSECCOM 7 (CanLII) — 2006-12-19

British Columbia Securities Commission — British Columbia

issuer — bid — securities — market — trading

4.

Sherritt International Corporation (Re), 2008 CanLII 19439 (MB SEC) — 2008-04-02

Manitoba Securities Commission — Manitoba

trading — valuation — business combination — take-over bid circular — securities

5.

Sherritt International Corporation (Re), 2008 CanLII 16472 (ON SEC) — 2008-04-18

Ontario Securities Commission — Ontario

principal regulator — take-over bid — securities legislation — reporting issuer — holders

TRADEMARKS

SHERRITT

Chemical Fertilizers

Owned by: Sherritt International Corporation

Serial Number: 86844366

Renewal History

Date Document Type Document Description

2017-05-05 Annual Return for 2017. Distributing corporation

2016-07-29 Arrangement

2016-06-03 Continuance (import) jurisdiction change Ontario

SUMMARY

Sherritt International Corporation engages in mining and refining nickel from lateritic ores in Canada, Cuba, and Madagascar.

The company operates through Moa JV and Fort Site, Ambatovy JV, Metals Other, Oil and Gas, Power, and Corporate and Other segments.

It operates nationally and internationally, mainly exporting to India and China.

The company shows positive profitability in its last financial figures.

RISK INFORMATION

DEBTS

PAYMENTS

Regular

CASH FLOW

Normal

SUGGESTED CREDIT LINE

USD 2 000 000

STATUS

Inactive

INTERVIEW

NAME

-

POSITION

-

COMMENTS

We called number 416-924-4551 several times and received no answer.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	INR 64.94
UK Pound	1	INR 90.72
Euro	1	INR 80.32
CAD	1	INR 46.64

Note : Above are approximate rates obtained from sources believed to be correct

INFORMATION DETAILS

Analysis Done by :	NIY
Report Prepared by :	TPT

RATING EXPLANATIONS

Credit Rating	Explanation	Rating Comments
A++	Minimum Risk	Business dealings permissible with minimum risk of default
A+	Low Risk	Business dealings permissible with low risk of default
A	Acceptable Risk	Business dealings permissible with moderate risk of default
B	Medium Risk	Business dealings permissible on a regular monitoring basis
C	Medium High Risk	Business dealings permissible preferably on secured basis
D	High Risk	Business dealing not recommended or on secured terms only
NB	New Business	No recommendation can be done due to business in infancy stage
NT	No Trace	No recommendation can be done as the business is not traceable

NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors are as follows:

· Financial condition covering various ratios

· Company background and operations size

· Promoters / Management background

· Payment record

· Litigation against the subject

· Industry scenario / competitor analysis

· Supplier / Customer / Banker review (wherever available)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.