Sherritt International‘s (TSX: S) president and CEO David Pathe did not mince words when he said the firm must take action to protect its balance sheet in order to withstand lower commodity prices at a time when “more than 60% of global nickel production is underwater on a cash cost basis.”
After markets closed on Sept. 17 Sherritt suspended its 1¢ per share quarterly dividend, noting that at current spot prices of US$4.50 per lb, nickel is down 32% since the company last cut its dividend in the first quarter of 2014 from 4.3¢ per share to 1¢ per share.
A world leader in the mining and refining of nickel from lateritic ores and the largest independent energy producer in Cuba with oil and power operations across the island, Sherritt said prices for nickel and crude oil haven’t traded this low since 2009.
Sherritt also said it would cut capital expenditures in 2016 by as much as 25% to 35%. Earlier this year the company trimmed its 2015 capex guidance by $15 million to $195 million.
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