Low feed at nickel refinery still haunts Sherritt Gordon

Sherritt Gordon (TSE), the Edmonton-based fertilizer and speciality metals manufacturer, continues to suffer the cost of being unable to fill its nickel refinery in Fort Saskatchewan, Alta. The company reported a net loss of $5.2 million or 20 cents a share for the three months ended Sept. 30, compared to net earnings of $1.7 million or 6 cents a share in the same period last year. As the Alberta refinery was shut down during July and August, refinery production of nickel dropped to 2.3 million lb. from 9.3 million lb. in the 1989 quarter. As a result, Sherritt’s third- quarter revenues declined to $58.1 million from $103.8 million a year ago.

For the nine months ended Sept. 30, Sherritt Gordon reported a loss of $1.1 million or 4 cents, compared to earnings of $35.4 million or $1.32 a year earlier. Nine-month revenues dropped to $253.6 million from $427.2 million in the equivalent 1989 period.

Sherritt says the immediate objective of its new board is to secure a long-term source of nickel feed. It also plans to stabilize the company so that it will emerge from the current economic downturn in sound financial condition and will be prepared for growth.

“The year-to-date results show how difficult this year has been for the company,” said President Bruce Walter. “Third-quarter earnings were particularly affected by the nickel refinery shutdown during two of the three months,” he said. Sherritt Gordon (TSE) 3 months ended Sept. 30 1990 1989 Revenue $58,126 $103,876 Net earnings (loss) (5,208) 1,702

per share (0.20) 0.06 9 months ended Sept. 30 1990 1989 Revenue $253,578 $427,260 Net earnings (loss) (1,096) 35,371

per share (0.04) 1.32