Sherritt lowers Ni, Co output expectations: Correction
Corrects status of company output projections and other items.
Nickel and cobalt producer Sherritt reduced its 2019 production guidance from its Ambatovy joint venture in Madagascar because of operating setbacks in the third quarter.
The Toronto-based miner expects 2019 nickel production from the Ambatovy joint venture to be 34,000-36,000 metric tonnes (t), down from previous guidance of 40,000-45,000t on a 100pc basis. Sherritt reduced Ambatovy's cobalt guidance to 2,800-3,000t from 3,500-4,000t.
Sherritt kept its outlook unchanged at its Moa joint venture in Cuba, with nickel output forecast at 31,000-33,000t and cobalt at 3,300-3,600t on a 100pc basis.
The company owns half of the Moa joint venture, which includes the nickel/cobalt mine in Cuba and refinery in Saskatchewan, Canada. It also has a 12pc interest in the Ambatovy mine.
Sherritt said it expects a shortage of Class 1 nickel in the next couple of years because current market prices are below incentive levels needed to develop new nickel projects. The three-month nickel contract on the London Metals Exchange rose by 40pc during the third quarter to close at $17,350/t on 30 September in reaction to Indonesia bringing forward the scheduled effective date of a nickel ore export ban by two years. The ban will now take effect on 1 January 2020.
Moa produced 8,278t of nickel in the third quarter on a 100pc basis, down by 7pc from the third quarter of 2018, and 872t of cobalt, which was 6pc lower from a year prior. Through the first nine months of the year, Moa produced 25,010t of nickel and 2,554t of cobalt on a 100pc basis.
Drilling in block 10 at Moa resumed on 19 October following the import of drilling mud tanks due to the lack of availability in Cuba.
Nickel production at Ambatovy on a 100pc basis was up by 19pc to 9,058t in the third quarter from a year earlier. Cobalt production was up by 2pc to 750t. Year-to-date nickel production at the site was 25,250t, up by 11pc year over year, while cobalt production totaled 2,158t, a 10pc increase.
For the first nine months of the year, total combined nickel production at the mines was 50,260t, and cobalt production was 4,712t on a 100pc basis.
Revenues for the third quarter fell by 16pc to $133.9mn. The company lost $30mn in the quarter, compared to a loss of $13.3mn the prior year. It attributed the loss to lower cobalt prices.
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