Sherritt drops plan to dissolve Cuban assets

Sherritt International (TSX: S) has dropped plans to dissolve its mining assets in Cuba, though operations will remain suspended amid ongoing United States sanctions on the island nation.

The Canadian miner now plans to keep its Cuban interests, namely the Moa nickel mining venture, and will not proceed with its application to the Court of King’s Bench of Alberta to disclaim the asset, according to a statement Tuesday.

The decision was made following further “consultation with advisors, stakeholders and relevant governmental authorities,” and “in light of additional information” available to the company, Sherritt added.

The announcement comes just days after Sherritt said it would be dissolving the 50/50 Moa joint venture with Cuba’s state-owned General Nickel Company, citing a “material change” from the joint venture shareholders’ agreement. It followed a recent executive order by U.S. President Donald Trump that expanded sanctions on Cuba to include non-American entities, including Sherritt.

The extended U.S. sanctions triggered a wave of departures from the company, including those of three board members and the chief financial officer, and led to a more than 50% drop in its share price.

Before that, the Toronto-based miner had already been struggling due to its heavy exposure to Cuba, where it has been mining cobalt and nickel since the 1990. It also produces electricity, oil and gas through a stake in Energas SA, another joint venture with Cuba’s state electric and petroleum companies.

Shares of Sherritt International rebounded 9% to 12¢ Tuesday from an all-time low of 11¢. The company’s market capitalization is about $81 million, following a decline that extends to nearly two decades.

While the company is not longer seeking a dissolution of the Cuban assets, its participation in the Moa venture will remain suspended, Sherritt said on Tuesday, adding that it will “continue to work with stakeholders and advisors on steps to address the executive order as soon as practicable.”

The company also said it has been presented, on a preliminary basis, with “a potential value preserving opportunity”, which it will evaluate.

“There can be no assurance however that any such steps or transaction will be achieved or achieved in a timely manner,” Sherritt said. “In addition, the timing, structure and terms of any such steps or transaction are complex and not yet final.”