Home / Businesswire / Sherritt Announces Pricing of $115 Million Unit Offering

Sherritt Announces Pricing of $115 Million Unit Offering

TORONTO–(BUSINESS WIRE)–Sherritt International Corporation (“Sherritt”) (TSX:S):


Sherritt International Corporation (“Sherritt”) (TSX:S) today announced
the pricing and increase in size of its previously announced unit
offering of $100 million to $115 million. The offering will be comprised
of 82,143,000 units (the “Units”) issued at a price of $1.40 per Unit,
for gross proceeds of approximately $115,000,000. Each Unit shall
consist of one Sheritt common share (a “Common Share”) and one-half of
one common share purchase warrant linked to the price of cobalt (each
full warrant, a “Cobalt-Linked Warrant”). Each full Cobalt-Linked
Warrant will be exercisable at an exercise price of $1.95 for a period
of 36 months following the closing of the Offering.

A total of 82,143,000 Common Shares and 41,071,500 Cobalt-Linked
Warrants shall be issued in connection with the Offering. In addition,
the Agents have been granted an over-allotment option, exercisable in
whole or in part at any time until the date that is 30 days after the
initial closing of the Offering, to offer for sale up to an additional
12,321,400 Units. Assuming the completion of the Offering in full and
the exercise in full of the over-allotment, the total gross proceeds of
the offering will be approximately $132,000,000.

The Company has entered into an agency agreement with Paradigm Capital,
Eight Capital and National Bank Financial, who are acting as co-lead
agents and joint-bookrunners on behalf of a syndicate that includes TD
Securities (collectively, the “Agents”).

Each Cobalt-Linked Warrant will be exercisable to acquire between 1.00
and 1.25 Common Shares of Sherritt, determined based on the Applicable
Cobalt Reference Price (as defined below). The Units have been
structured to provide investors with increased leverage to upwards
movement in the price of cobalt.

Each Cobalt-Linked Warrant will entitle the holder thereof to acquire
that number of Common Shares that is equal to the Common Shares per
Warrant Ratio (as set out in the table below). The initial Common Shares
per Warrant Ratio will be one share to one warrant based on an initial
Applicable Reference Cobalt Price of US$34.99 per pound or lower.

The Common Shares per Warrant Ratio will be determined and published
monthly based on the Applicable Reference Cobalt Price per Pound in
accordance with the following table:

Applicable Reference Cobalt Price per Pound

Common Shares per Warrant Ratio

US$34.99 or lower

US$35.00 – US$39.99

US$40.00 – US$44.99

US$45.00 – US$49.99

US$50.00 – US$54.99

US$55.00 and higher







The “Applicable Cobalt Reference Price per Pound” will be calculated and
published by Sherritt monthly, based on a rolling average of the prior
three months cobalt price using the midpoint of the Metal Bulletin High
Price and the Metal Bulletin Low Price1, expressed in US
dollars per pound, for each month in such three-month period.

The net proceeds of the Offering shall be used to reduce Sherritt’s
outstanding indebtedness, for general corporate purposes and to fund
future growth initiatives. Sherritt intends to use up to $75 million of
the proceeds of the Offering and its existing cash balance to repurchase
a portion of one or more of its senior unsecured debentures (the
“Debentures”). The Debentures will be repurchased under the terms of a
modified Dutch auction tender offer (the “Tender Offer”). For further
details of the Tender Offer, investors are advised to consult Sherritt’s
press release dated January 16, 2018, entitled Sherritt Announces
Dutch Auction to Purchase up to $75 Million of Outstanding Debentures.

The Offering is subject to satisfaction of customary closing conditions,
including the receipt of all necessary regulatory and TSX approvals. The
Offering is expected to close on January 25, 2018.

The securities described herein have not been, and will not be,
registered under the U.S. Securities Act, or any state securities laws,
and accordingly, may not be offered or sold to, or for the account or
benefit of, persons in the United States or to U.S. Persons (as such
term is defined in Regulation S under the U.S. Securities Act), except
in compliance with the registration requirements of the U.S. Securities
Act and applicable state securities requirements or pursuant to
exemptions therefrom. This press release does not constitute an offer to
sell or a solicitation of an offer to buy any of Sherritt’s securities
to, or for the account or benefit of, persons in the United States or
U.S. Persons.

About Sherritt
Sherritt is a world
leader in the mining and refining of nickel and cobalt from lateritic
ores with projects and operations in Canada, Cuba and Madagascar. The
Corporation is the largest independent energy producer in Cuba, with
extensive oil and power operations across the island. Sherritt licenses
its proprietary technologies and provides metallurgical services to
mining and refining operations worldwide. The Corporation’s common
shares are listed on the Toronto Stock Exchange under the symbol “S”.

Forward-Looking Statements
This press release contains
certain forward-looking statements. Forward-looking statements can
generally be identified by the use of statements that include such words
as “believe”, “expect”, “anticipate”, “intend”, “plan”, “forecast”,
“likely”, “may”, “will”, “could”, “should”, “suspect”, “outlook”,
“projected”, “continue” or other similar words or phrases. Specifically,
forward-looking statements in this document include, but are not limited
to, statements set out in this press release relating to estimated costs
and future funding requirements.

Forward-looking statements are not based on historic facts, but rather
on current expectations, assumptions and projections about future
events, including matters relating to the transaction disclosed herein;
availability of governmental, regulatory and third party approvals; and
the ability to achieve corporate objectives, goals and plans for 2018.
By their nature, forward-looking statements require the Corporation to
make assumptions and are subject to inherent risks and uncertainties.
There is significant risk that predictions, forecasts, conclusions or
projections will not prove to be accurate, that those assumptions may
not be correct and that actual results may differ materially from such
predictions, forecasts, conclusions or projections.

The Corporation cautions readers of this press release not to place
undue reliance on any forward-looking statement as a number of factors
could cause actual future results, conditions, actions or events to
differ materially from the targets, expectations, estimates or
intentions expressed in the forward-looking statements. These risks,
uncertainties and other factors include, but are not limited to the
risks and uncertainties set out in the Management’s Discussion &
Analysis of the Corporation for the period ending September 30, 2017 and
the Corporation’s Annual Information Form dated March 28, 2017, each of
which are available on SEDAR at www.sedar.com.
Readers are cautioned that the foregoing list of factors is not
exhaustive and should be considered in conjunction with the risk factors
described in this press release and in the Corporation’s other documents
filed with the Canadian securities authorities.

The Corporation may, from time to time, make oral forward-looking
statements. The Corporation advises that the above paragraph and the
risk factors described in this press release and in the Corporation’s
other documents filed with the Canadian securities authorities should be
read for a description of certain factors that could cause the actual
results of the Corporation to differ materially from those in the oral
forward-looking statements. The forward-looking information and
statements contained in this press release are made as of the date
hereof and the Corporation undertakes no obligation to update publicly
or revise any oral or written forward-looking information or statements,
whether as a result of new information, future events or otherwise,
except as required by applicable securities laws. The forward-looking
information and statements contained herein are expressly qualified in
their entirety by this cautionary statement.

1 The “Metal Bulletin High Price” means the Cobalt low
grade Metal Bulletin free market US$/lb in warehouse monthly average
high; the “Metal Bulletin Low Price” means the Cobalt low grade
Metal Bulletin free market US$/lb in warehouse monthly average low.


Sherritt International Corporation
Joe Racanelli, 416-935-2457
of Investor Relations
Toll-Free: 1-800-704-6698
[email protected]