Canadian miner Sherritt International Corp. has announced that it is no longer pursuing a plan to dissolve its joint venture in Cuba, reversing a decision made last week. The Toronto-based company stated that it stopped the dissolution plan after ongoing consultations with advisers, stakeholders, and governmental authorities, and after acquiring additional information. Sherritt is currently evaluating a potential value preserving opportunity, though there is no guarantee of if or when it will move forward.
The company and the General Nickel Co. S.A. of Cuba each hold a 50% interest in the Moa joint venture, which mines nickel in Cuba for refinement in Canada. Despite the reversal, Sherritt is maintaining its suspension of direct participation in joint venture activities. The company reports it still faces acute operational, financial, and legal difficulties, including the ability to comply with debt covenants, as it navigates expanded sanctions and a de facto fuel blockade enforced by the Trump administration.
In a related move, Sherritt has entered into a non-binding term sheet with U.S.-based Gillon Capital for a private placement of up to 55% of its common shares. The agreement involves a common share purchase warrant exercisable within nine months at a discount to the May 15 closing price of C$0.11. While U.S. authorities do not oppose the current talks, any final deal will require their approval.
The situation unfolds as U.S. Secretary of State Marco Rubio defends the administration's sanctions, while Cuban authorities argue the policies constitute collective punishment intended to strangle the island's economy. These sanctions and an energy blockade have contributed to severe gas and water shortages along with sweeping power outages across Cuba.