TORONTO (miningweekly.com) – Diversified miner Sherritt International has increased its net loss by C$158.7-million during the third quarter ended September, as lower prices for nickel, cobalt and oil and gas products weighed on its bottom line.
The Toronto-based firm reported a net loss from continuing operations of C$210-million, or C$0.72 a share, compared with a loss of C$51.3-million, or C$0.17 a share, in the prior-year period.
Excluding special items, the company reported an adjusted loss of C$91.4-million, or C$0.31 a share, missing analyst expectations of a loss of C$0.30 a share, on revenue of C$91.9-million.
Consolidated revenue declined 19% to C$246.5-million for the period, mainly owing to lower nickel and oil prices, which were partly offset by a weaker Canadian dollar relative to the US dollar. The gross working interest (GWI) oil output in Cuba was also lower as oil output from new development wells was not able to offset natural reservoir declines, the company stated.
During the quarter, nickel prices hit a seven-year low closing price of $4.22/lb on August 24 and averaged $4.78 in the quarter. Crude oil prices also declined since the second quarter, with West Texas Intermediate (WTI) crude prices closing at a low of $38.24/bl on the same day and averaging $46.56/bl in the quarter. Since quarter end, nickel prices had rebounded modestly from their lows to $4.75/lb on Tuesday and WTI was trading at $45/bl on Wednesday.
“We continue to operate in a severely depressed commodity pricing environment, with nickel and oil prices declining further during the quarter. In response to this reality, we have executed further cost-cutting measures, including cutting our dividend and reducing expected capital spending for this year and [the] next,” president and CEO David Pathe commented.
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