Canadian miner Sherritt International announced on Wednesday that it has signed a non-binding term sheet with U.S.-based Gillon Capital for a private placement of up to 55% of its common shares. The preliminary agreement, which outlines the basic terms of a potential deal, includes a common share purchase warrant exercisable within nine months. The exercise price is expected to be set at a discount to the $0.11 closing price of Sherritt's common shares on May 15.
U.S. Authorities Not Opposed to Talks
The nickel-cobalt miner stated that U.S. authorities have not opposed Gillon Capital's ongoing discussions with the company. However, any final agreement will still require approval from U.S. regulators. Sherritt has been under increasing pressure due to U.S. sanctions targeting its operations in Cuba.
Impact of U.S. Sanctions on Cuba Operations
Since January, the Trump administration has enforced what Sherritt describes as a de facto fuel blockade against Cuba. The administration has also threatened military action and expanded sanctions, forcing many foreign businesses to leave the country. These measures have significantly impacted Sherritt's business activities in the region.
On Tuesday, the Toronto-based company announced that it would not proceed with plans to dissolve its Cuban interests, including a joint venture with Nickel Company S.A., a state-owned Cuban nickel company. This decision reversed an earlier announcement made earlier this month, following the imposition of U.S. sanctions on the joint venture.
Sherritt's move to seek new investment from Gillon Capital is seen as a strategic effort to navigate the challenging geopolitical landscape and secure financial stability amid ongoing trade restrictions.
