Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Sherritt International Second Quarter 2024 Results Conference Call and Webcast. [Operator Instructions] I would like to remind everyone that this conference call is being recorded today, Tuesday, July 30, 2024, at 10

00 a.m. Eastern Time. I will now turn the presentation over to Tom Halton, Director of Investor Relations. Please go ahead.

Thank you, operator, and welcome, everyone, to Sherritt's second quarter 2024 conference call. We released our second quarter results last night. Our press release, MD&A and financial statements are available on our website and on SEDAR+. During today's call, we will be referring to our presentation that is available on our website and on today's webcast. We will be making forward-looking statements and references to certain non-GAAP financial measures. So please refer to the cautionary notes on Slide 3 of our presentation as well as the material assumptions and risks associated with the forward-looking statements on Slide 20. Reconciliations of non-GAAP measures to the most directly comparable IFRS measures are also included in the appendix of the presentation. On the call today is Leon Binedell, President and Chief Executive Officer; Yasmin Gabriel, Chief Financial Officer; and Elvin Saruk, Chief Operating Officer. Following a review of our results, we will open the call to questions. It is now my pleasure to pass the call over to Leon.

Thank you, Tom. Good morning, everyone, and thank you for joining us today. Before discussing our results, I will provide a few remarks on the nickel market given the significant volatility and the vast number of interventions and decisions that have and may likely continue to impact the nickel market. So beginning on Slide 4. Nickel price averaged USD 8.35 per pound in the second quarter, an increase quarter-over-quarter. This was largely due to Western producers announcing further production cuts, the LME implementing restrictions on Russian origin metal and news of tariffs on both Chinese EVs and nickel being evaluated or implemented by Western countries. Nickel prices reached 9-month high on May 20 as news of political protests in New Caledonia, the third largest source of mine nickel caused concerns of additional supply disruptions. By June 11, however, prices fell back to below $8 per pound on profit taking, U.S. dollar strength and weaker-than-expected Chinese manufacturing data. Today, despite continuing supply cut announcements, both nickel and cobalt remain oversupplied, largely due to China's continued actions to increase supply of these metals in order to dominate each stage of the EV supply chain. Nickel prices have continued to decline and today are slightly above $7 per pound. Despite these factors, demand for nickel and cobalt continues to grow and we remain encouraged by the Western governments recognizing the importance of strong domestic or non-Chinese controlled critical mineral and EV supply chains. This was demonstrated by the U.S. announcing increased tariffs on Chinese EVs and nickel and related products in May and further actions being evaluated in the EU and Canada. We also saw Australia offer incentives to the nickel industry. However, these were too long dated and minimal in its impact to mitigate BHP, the world's largest mining company from suspending its nickel operations in Australia for the foreseeable future. We are monitoring and advocating for these counteractions by Western governments and the potential for premiums to be attributed to responsible source critical minerals not linked to or operating through the Chinese supply chains. Given this market backdrop, we continue to advance initiatives to lower our operating costs, improve our operations and position us to weather these near-term market uncertainties. However, recognizing that these uncertainties have a material negative impact on short-term cash generation. When these near-term market uncertainties abate, we'll be in a stronger position to take advantage of our existing and future growth opportunities. Turning to Slide 5 for an overview of our second quarter highlights. We achieved higher levels of MSP production from Moa again this quarter compared to both last year and Q1, as we continue to see the benefits of the new Slurry Prep Plant commissioned earlier this year. Nickel production was strong in the quarter, and for the second consecutive quarter, we also saw nickel sales exceed production reducing the inventory, which was accumulated in the second half of last year under challenging market conditions. We expect this trend to continue throughout the balance of the year as production remains strong, yet sales are expected to exceed production and therefore, inventories reduced. Second quarter net direct cash costs improved to USD 5.75 per pound, benefiting primarily from lower mining processing and refining cost per pound. Power continues to deliver high levels of production with the additional gas from two wells that went into production at the end of the second quarter of last year. We have another well scheduled to be drilled this year, which we expect will increase our electricity output further during the second half of the year. As we indicated last quarter, these higher levels of production will begin to translate into increased dividends to Sherritt. During the second quarter, we received $5 million in dividends from Energas in Canada. Yasmin will give a more detailed overview of our liquidity, but including the dividend from Power and the now full repayment this quarter of the short-term working capital advances we made to Moa JV last year, liquidity in Canada was $56 million at quarter end. Finally, during the quarter, we also released our 16th annual sustainability report, outlining our commitment to enhancing safety performance across all of our operations, further reducing our carbon intensity and making a lasting positive impact on our communities. Our ongoing commitment to sustainability positions Sherritt as a responsible supplier of critical minerals, which is increasingly important to our customers, particularly with our key European markets leading these expectations. With that, I will now hand over to Elvin to provide more details on our operations during the quarter. Elvin?

Thank you, Leon. Turning to Slide 7 for our metals results. As Leon mentioned, production of mixed sulphides benefited from additional processing and capacity and efficiencies from the Slurry Preparation Plant commissioned earlier this year. During the quarter, nickel and cobalt production increased year-over-year as a result of higher mixed sulphides availability. At our Fort Site, our annual maintenance shutdown occurred during the second quarter, similar to last year. During this downtime, we purposely built our feed inventory at the site and strengthen our pipeline inventory to ensure reliable feed throughput at the refinery for higher production for the balance of the year in line with our plan and which was factored into our production guidance. Fertilizer production was also higher in line with the higher nickel production, but also from operational improvements we have recently established. Now moving to sales. With the higher finished nickel inventory we began this year with, we have been focusing on reducing our inventory over the course of 2024. During the second quarter, we made further progress on this with nickel sales volumes exceeding production by about 400 tonnes from strong spot sales that we expect to continue in the second half of the year. Cobalt sales were lower year-over-year due to the timing of the Cobalt Swap distributions, which during 2023 we received earlier in the year. As for fertilizer sales, they were modestly lower year-over-year, but still reflected a strong sales quarter, in line with our historical seasonal trends. Moving on to Slide 8 to discuss our net direct cash costs, NDCC. Our NDCC during the second quarter was USD 5.75 per pound decreasing 20% year-over-year. This was largely due to 15% lower mining, processing and refining costs per pound of nickel sold. The lower MPR per pound was largely due to increased operating efficiencies, lower sulfur and natural gas price, lower purchase sulfuric acid, lower maintenance cost and the impact of higher nickel production and sales volumes. Lower average realized prices and lower sales volume for cobalt and fertilizers resulted in lower byproduct credits. Looking ahead, we expect to see NDCC continue to trend within our guidance range. Now turning to Slide 9 to talk about our Moa Joint Venture expansion project. Phase 2 of the Moa Joint Venture expansion project, the processing plant continued to advance during the quarter. Civil construction and structural erection were completed and piping installation commenced. In July, the Moa Joint Venture received approval for USD 12 million of foreign currency financing from a Cuban bank to support international payments for the completion of the construction of Sixth Leach Train, which is the primary component of Phase 2 expansion. We continue to expect commissioning of Phase 2 of the expansion in 2025 with the ramp-up in the first half of the year. Finally, turning to Slide 10 for our Power results. Electricity production was 19% higher year-over-year as a result of the additional gas we began receiving at the end of the second quarter of last year from the two new wells that went into production. We have been pursuing further opportunities with our Cuban partners to increase gas supply through drilling new wells to support additional power generation, and we now have another well set to be drilled and commenced production later this year. Our higher levels of production have resulted in dividend payments in Canada, and we have already received the first of those during the quarter. Lastly, on costs, our unit operating costs came in higher this quarter due to timing of scheduled maintenance activities, which was completed during the quarter. However, we continue to see full year costs within the guidance provided. At this time, I'll turn the call over to Yasmin, who will provide an overview of the financial results.

Thanks, Elvin. I'll begin with our financial performance on Slide 12. As we continue to manage through the challenging metal pricing environment that began last year, our financial performance this quarter was again significantly impacted by lower average realized prices. Average realized prices for nickel, cobalt and fertilizers were lower year-over-year by 17%, 12% and 19%, respectively. Consolidated revenue for the second quarter, which does not include share of revenue from the Moa Joint Venture, was $51.4 million compared to $93.5 million in the second quarter of 2023, primarily due to lower realized prices and lower Cobalt Swap sales. As previously explained, we received all of the Cobalt Swap volume in the first half of last year. And in the current year, we expect to begin receiving cobalt volume under the Cobalt Swap in the fourth quarter, which I'll speak to on the next slide. Combined revenue which includes the corporation's consolidated revenue and revenue from the Moa Joint Venture on a 50% basis and which more holistically reflects our performance was $163.2 million compared to $197 million in Q2 2023 and was also impacted by the lower nickel realized prices mentioned earlier, partly offset by higher nickel sales volumes. Despite significantly lower revenue, adjusted EBITDA was $13 million, only 8% lower than Q2 2023 as lower average realized prices were largely offset by higher nickel sales volumes and lower MPR costs per pound. Net loss from continuing operations was $11.5 million or a loss of $0.03 per share, again, with lower realized pricing driving lower year-over-year results. Adjusted net loss from continuing operations was $10 million or a loss of $0.03 per share, which excludes a noncash $5.3 million revaluation loss on the net Cobalt Swap receivable and a $3.4 million unrealized gain on our nickel hedging productions. Turning now to Slide 13. We ended the quarter with almost $56 million of available liquidity in Canada in line with our expectations. Key changes in liquidity during the quarter included $27 million of cash provided by the Moa Joint Venture to complete the full repayment of the short-term working capital advance, $5.1 million of cash dividends from Energas, $9.4 million used to pay interest on the second lien notes, $7.8 million used by Power for scheduled maintenance completed in the quarter and timing of working capital payments, and $10.8 million used for rehabilitation and closure costs related to legacy oil and gas assets in Spain. Looking ahead, with the Moa JV having fully repaid their short-term working capital advanced during the second quarter, as previously indicated, we expect to begin receiving distributions under the Cobalt Swap agreement in the fourth quarter this year. As a reminder, dividend distributions are predicated on the Moa JV's current and expected available liquidity, but assuming the midpoints of our guidance ranges, and the average reference prices of nickel and cobalt from the first half of the year, we would expect to receive approximately $50 million in distributions, which would include Sherritt's share as well as GNC's redirected share. As defined by the agreement, any shortfall in the annual minimum amount -- minimum payment amount is carried forward to the following year. At Power, we also anticipate receiving additional dividends in Canada from Energas, the total dividends for 2024 expected to exceed $10 million based on 2024 guidance for production volumes, unit costs and spending on capital. With increased production expected next year, we continue to expect dividends in future years to be significantly higher than 2024. We'll provide further details on expected amounts after the release of our 2025 guidance. I'll now turn to Slide 14 to end with a few additional updates from the quarter, which outlined some of the actions we were taking to mitigate the impacts from lower nickel and cobalt prices. The brief uptick in nickel prices in May, we purchased put options on 3,876 tonnes of nickel or approximately 25% of expected nickel production from the Moa Joint Venture, at an exercise price of USD 8.16 per pound for a 6-month period starting June 1. Our nickel price hedging strategy provides Sherritt with protection against downward changes in nickel prices while maintaining full exposure to the upside. We completed a 10% workforce reduction at our corporate office and reduced other corporate office related costs in May. This reduction was in addition to the 10% workforce production to our Canadian operations earlier this year, and we expect to realize annual cost savings of approximately $15 million from the actions we have taken to date across the organization. We extended our syndicated revolving credit facility to April 30, 2026, and received favorable amendments to certain covenants. There are no other significant changes to the terms, financial covenants or restrictions. We opportunistically repurchased $1.5 million of principal of our PIK notes that were offered at a 50% discount. And subsequent to quarter end, we have elected to not pay cash interest and added PIK interest to the principal amount. If the current challenging market conditions experience persists, we expect interest in January to also be picked. Finally, I'll comment on the reclamation work for our legacy oil and gas assets in Spain, which we are contractually obligated to complete. While we have some near-term payments expected to be approximately $13 million over the next 12 months, we are continuing to work with our partner to find opportunities to contain some of the reclamation costs associated with these legacy assets. That concludes my comments. I will turn the call back to Leon.

Thank you, Yasmin. Concluding on Slide 16. Although near-term market conditions remain challenging, our operations have returned to stability and we expect further improved results in the second half of the year with higher production from metals and lower NDCC. Our growth projects remain on track with Phase 2 of our Moa Joint Venture expansion expected to ramp up in the first half of next year, with the expected positive impact on our margins from the expanded volumes of our own MSP feed and the forecast medium-term demand growth for our metals remaining strong, we continue to believe in the value of this low-cost expansion. Our MHP refinery project is also making positive advancements with the commencement of an engineering study and continued batch test work and process flow sheet development, which yielded very positive results for metal recoveries and impurity removals during the quarter. We are focusing on completing flow sheet design and conducting a small-scale continued solvent extraction pilot for the second half of the year. External engagement is also continuing with governments and potential customers and funding partners. Finally, as mentioned, we are expecting cash inflows in the second half of this year with additional dividends from Energas and distributions from our Cobalt Swap commencing. And now operator, I'd like to open the call to questions.

[Operator Instructions] Your first question is from the line of Gordon Lawson from Paradigm Capital. Please go ahead.

Hi, good morning. Just looking at your cash balance, in particular, what's available in Canada. And I appreciate the hedging in the current environment and the expected dividend payments. But can you provide some color as to your option for cash availability in 2026 when your second lien debt comes due?

Thank you for the question, Gord. We have not provided guidance on 2025 or '26 in terms of production volumes and operating costs. And so -- obviously, those would have a material impact on what our cash generation will be over the coming years. Nickel prices and cobalt prices will have a profound impact. And so -- under current market environment, clearly, we'll generate less cash flow between now and the end of 2026. But we do see that there is a significant number of market interventions that hopefully will have a positive impact on pricing, which will see us return to even higher levels of profitability. But what we can do and what we have done, Gord, is to create operational stability and reduce our operating costs, which we've done and demonstrated that creates headroom and creates a margin -- a positive margin for us to continue to generate positive cash flows.

And while your debt partners, are you in conversations at this point for rolling it over or other options?

Those would be private conversations, Gord, and we have not publicly disclosed anything related to that. Obviously, we are proactive in understanding what these market conditions may cause for us over the coming years, and we'll proactively engage in any discussions with financing partners and the debt holders as well. So you can expect us to be actively dealing with a matter, but until there's something to publicly disclose, we'll refrain from comment.

Okay. Understood completely. So switching over a little more softball here. Your fertilizer production was certainly improving, given the year-to-date volume, I understand you don't give guidance, but can you provide any color as to what you're expecting for 2024? And any additional information you can provide on the pricing environment given the outperformance on that front?

Sure. We've managed to get stability in our fertilizer production, as Elvin had mentioned. And so we are continuing to produce good volumes of fertilizer and we expect to have a good ability to sell into the fall season. Last year, we missed out quite a bit on the fall season sales because of our issues in the ammonia part. This year, we'll be much more akin to what we saw in 2022 in terms of volumes and the ability to sell into that market. The market is reasonably good. Pricing is off the peaks of what it were previous years. But we are -- at the end of the first half, I think we will be seeing similar levels of market action in the second half of the year as well.

Okay. That's great. That's it for me. Thank you very much.

Thank you, Gord.

There are no further questions at this time. I'll hand the call over to Tom Halton for closing remarks. Please go ahead.

Thank you, operator. And just thank you, everyone, for joining us today.

Ladies and gentlemen, this concludes today's conference call. Thank you very much for your participation. You may now disconnect.