Joe Racanelli - Director of Investor Relations and Communications David Pathe - Chairman, President and Chief Executive Officer Steve Wood - Executive Vice President and Chief Operating Officer Andrew Snowden - Senior Vice President and Chief Financial Officer

Orest Wowkodaw - Scotia Capital Jacques Wortman - Eight Capital Greg Barnes - TD Securities Kevin Cohen - Imperial Capital

Thank you. Good morning, everyone.

And I'd and thank you for joining us today. And I'd like to remind everyone that we put out our press release and financials and are available from our website at sherritt.com.

We will be using a presentation this morning and that is also available via our website. During today's presentation, we will be making some forward-looking statements and those risks associated with the statements are details in our presentation.

With me are Sherritt's CEO, David Pathe; our Chief Operating Officer, Steve Wood; and our Chief Financial Officer, Andrew Snowden. And they will reviewing our Q3 results and operational performance.

Please go ahead David.

All right. Thank you, Joe, and good morning to everyone from me as well and thanks for joining us once again this morning.

You'll have seen our Q3 release come out last night. A number of highlights coming out that we'll talk about over the next few minutes here.

Beginning of the year, we did set out a number of priorities that we were going to try and make some progress on and we've seen some significant progress on those particular in this third quarter this year, so we'll try and highlight some of that for you. Most notably, the more joint venture, we've seen our nickel production up 10% year-over-year, really delivering on with a stronger production that we said, we would see in the second half of this year.

We are still on track to produce significant higher production in the second half of this year. And we had said previously that we'd be at the lower range of our guidance and but for the supply disruption from our hydrogen sulphide H2S provider, which I'll talk a little bit more about in a few minutes, we would have been on track for that low end of the guidance.

From a cost perspective another strong quarter for costs $2.16 a pound and that's despite some upward pressure on input commodity prices like sulfur and fuel oil as well as a lower cobalt by-product credit for six consecutive quarter that were in the lowest quartile of Class 1 nickel producers. Finally, we did say we'd start - we finished this quarter with a stronger cash position and that has come through as well despite the decline in nickel and cobalt prices were our cash position was up about $10 million in the quarter comes around $207 million.

I'm not going to just touch briefly on sort of nickel and cobalt markets for a moment, before then turning it over to Steve to talk about some operational results and Andrew to talk about few financial matters as we typically do. I'll then come back again once in the end of the call and touch on two or three matters in a bit more detail before we take your calls.

From a market perspective, tougher quarter than what we've seen the last few quarters. As you look at the graph on Page 6 there, we've seen a continued volatility in nickel and cobalt prices and that graph there shows you the movement and prices since the beginning of the year.

Nickel prices are off about 25% from their highs earlier in the year when we briefly touched $7 and then cobalt has retreated as well. Number of factors for that, the average reference price in the quarter for us on nickel is about US $6 a pound, cobalt price was just over $35 and change.

Despite the lower trend in commodity prices, we've seen inventory stocks coming down and stronger growth in the electric vehicle market, and I'll highlight that for you in just a moment. Nickel is currently trading about $5.25 $5.30 a pound, cobalt is just under $35, a little under our Q3 reference prices.

We've seen a lot of volatility impacted by a number of things from currency crises to stronger U.S. dollar, certainly fears of global trade wars in the U.S.

China tariff situation are weighing on base metals across the board and we've seen that across the base metal sector. Volatility in the cobalt price has been driven a bit by some pullback from the big run up that we've seen in cobalt prices the last eight months.

Bit of softer demand in the near term here and a bit of an increase in production out of the DRC. In the near term, we still think this volatility is going to continue.

We've seen a lot of volatility in the nickel price in the last few years. But the underlying fundamentals in terms of supply and demand for actual physical metal, particular for Class 1 metal that we produce, we still think are quite compelling and more encouraging than they've been in quite some time.

Turning the page over to Slide 7. This highlights what's happening in global inventories of Class 1 nickel in the last few years.

We've talked about this numerous times in the past, inventories maxed out between the LME and the Shanghai Futures Exchange and somewhere around 450,000 tons. Those inventories started coming down in late 2016 and with more conviction in 2017.

That pace of decline is further accelerated in 2018 and we've actually seen a decline in new indoor global inventories of over 40% in year-to-date and 2018. We think this is indicative of the global nickel market that is now in deficit with actual nickel consumption that was tripping nickel production, particularly in Class 1 nickel as we produce.

A lot of that increase in nickel demanding and consumption has been driven by stainless steel but the longer term play here and we think for Class 1 nickel continues to be electric batteries for electric vehicles and we've seen that trend continue apace as it's been forecast to do for the last couple of years. Nickel is still forms a relatively - batteries still form a relatively small market of global nickel demand but the anticipated future demand is so far materializing as forecast.

The left side of that chart on Page 8 there shows you the year-over-year changes in electric vehicle sales in different jurisdictions and this continues to very much be a China driven story. China is still working towards an electric vehicle market of 15 million vehicles a year annually by 2030 and that's what you see highlighted in terms of future anticipated demand in the years to come in the bar chart on the right hand side of that page.

Very much a China followed by European driven story. And from what we're seeing over there that is so far materializing on its expected base.

As I say, I'll come back and highlight a few more matters related to specific in the share, but now I'm going to turn it over to Steve and let him walk you through our operational performance in the quarter.

Okay. Thanks Dave.

As always I'd like to start our conversation today with a review of our safety performance. In the quarter, we continued our improved performance and our last time injury frequency actually continued to drop and that puts us clearly in the lowest quartile of our peers.

We're continuing to work on fatal risk prevention, leadership in the field and process safety management is our focus areas there. And in the quarter, our injury statistics continue to improve and we remain committed to all employees going home safely every day throughout the year.

Now turning over to our production results, I'd like to start with Moa first on Slide 10. On a 50% basis, Moa produced 4,457 tons of nickel and 465 tons of cobalt in the quarter.

And as you can see from the chart on page 10, the cobalt production was similar to last year's due largely to the third party feed that we used in the quarter having a higher nickel to cobalt ratio. I just like to remind you that we source third party feed when capacity at the refinery in Fort Saskatchewan is available and when the economics make sense and they did in this case.

I should point out that the nickel to cobalt ratio in the mix sulfites that produced at Moa and that provide the bulk of our feed for the refinery in Fort Saskatchewan are well within the normal range that we produce from there. Our nickel production in the quarter grew by 10% from last year and the improvement was due to a number of factors, mainly at the mine and that was mainly due to new mining equipment that had been deployed early in the quarter and it increased our output of the mine and continues to improve our production reliability and predictability from Moa.

Despite our strong performance in Q3, I'd like to remind everyone that production was impacted by a plant shutdown that we had in the acid plant at Moa and that shutdown meant that we had to temporarily increase the purchase of sulphuric acid from third parties to complete our processing at Moa. These added costs were offset by improved production and they were coupled by higher sulfur and energy costs and resulted in an NDCC of $216 per pound of finished nickel and that reflects in the quarter cobalt by-product credit of $363 which is up from $310 of last year.

Turning now to Page 11. We continue to be a low cost nickel producer with the nickel prices expect to decline in the coming years.

The advantages of being a low cost high purity producer will become more apparent in our financial results over the next several quarters. If we look at the NDCC cost curve, you see on the slide on Page 11, you can see that Moa's NDCC for the first nine months of the year was $196 per pound and puts it in the lowest quartile.

And this was achieved even with the production challenges we experienced in the first half of the year that we've referred to before where we had the heaviest rains we've experienced in more than 20 years in one time rail service disruption by our transportation provider in Western Canada. The quarter also marks the sixth consecutive quarter that Moa's NDCC has been in the lowest cost quartile.

I like to move on to Slide 11 now and talk about our initiatives to optimize production at Moa. We continue to execute our plans to optimize at Moa and to achieve operational excellence there.

The Q3 productions success is evidence that we're on the right path. First, we are improving the availabilities of our mobile equipment fleet I referred to the new equipment that we did get in the quarter.

We got a total of 29 new haul trucks, 3 new excavators and 2 loaders. And the new equipment is maintained by the supplier and with a guaranteed level of availability making the mine more reliable and predictable.

Result in the quarter is expected to carry forward as well. We also have the delivery of 24 more haul trucks under the same arrangement planned for the first quarter or early in the first quarter of next year and we'll continue to work on improving our maintenance that will further enhance our mine production at Moa.

Another action underway to improve mine performance is the construction of a new slurry preparation plant dump pocket and that will make haulage distances shorter and improve our ore quality and increase and improve throughput at the plant. The dumb pocket is approaching completion and we expect to commission it in the coming weeks with full benefit realized in the New Year.

Finally, we've done a lot of work in the area of organizational effectiveness. In simple terms, we have been working on increasing our capability to deliver on our plans to achieve operational excellence that I was referring to earlier by aligning our management organization with those plans.

In other words, we have the right people in the right roles doing the right thing. We have clarified accountabilities and authorities and match the best people to those roles with many of these people having come from other organizations, bringing knowledge of best practices that will continue to move us towards excellence in our operations.

We're starting to see the impact on the bottom line and expect to continue to see the improvements as a result in the New Year. Now moving on to Oil and Gas on Slide 13.

We've produced the 1,536 barrels of oil equivalent per day on a networking interest basis in the quarter. This total market decline of approximately 80% from last year when we produced 7,658 barrels of oil equivalent per day.

The decrease was due to a number of factors, the most notable of which was the expiration of the Varadero West production sharing contract in November of last year, as well as the decline in profit oil percentage from 45% to 6% at PE Yumuri. The decrease was also due to the natural decline of the maturing fields that we operate in and as is to be expected the decrease in the number of barrels produced had a negative impact on our unit costs.

And our unit costs in Cuba for the quarter were $884 per barrel, which is up from the $898 of last year as a result. Unit costs were also negatively affected by the weakening Canadian dollar.

Now turning over to the Power production on Slide 14. We produced 191 gigawatts of electricity in the quarter and that's down marginally from last year when we produced 210 in the same period.

The decline was largely due to reduced availability of natural gas and we use that natural gas to produce the electricity. As with the Oil and Gas division, the unit costs were negatively impacted by the appreciation of the Canadian dollar relative the U.S.

currency as labor expenses are denominated in U.S. dollars.

Now I'd just like to make a very brief update on Ambatovy. On Slide 15, you'll see that our efforts at Ambatovy, the efforts that the management team there is undertaking, have largely centered on improving production particularly through acid plant improvements in autoclaves reliability.

And there are reflected in a number of initiatives including the replacement of a second economize and completion of repairs on equipment that were damaged by the cyclone earlier in the year and continued corrosion prevention program. Most of these efforts had a bearing on production results in the quarter, in particular they had a plant shut down to replace the second economize.

Equally significant they countered some oxidizing ore that has since been resolved and production at Ambatovy has improved considerably in quarter four thus far. Given that recent progress, the team there is still cautiously optimistic about reaching their production targets for the year.

The NDCC guidance at Ambatovy have been reflected - sorry - been adjusted to reflect the lower cobalt prices and higher input costs. Finally, I'd like to remind everyone that with the restructuring of our ownership interest in Ambatovy will remain committed to serving as our operator through at least 2024.

And we do not anticipate any cash in or out in the near term. With that that, that concludes my review of the operational results.

I'll now turn it over to Andrew, our CFO, who will review our Q3 financial results.

Thank you, Steve, and good morning, everyone. I'll start my comments on Slide 17 with a review of our liquidity and cash movements around the quarter.

And you can see from this slide, our cash balance increased in terms of cash and short term investment increased by about $10 million during the quarter to close at September at $207 million. Than the main driver behind that increase you can see on this waterfall chart, I'll just make a few comments.

One, in total we received some of the $16 million from the Moa joint venture. That came in two forms during the quarter.

Firstly, repayments on some long term advantage we have provided around $11 million, and then secondly, around $5 million on dividends. And no dividends we received actually mark the first time we've received dividends from Moa for approximately three years.

These dividends were possible because of the full repayment on the working capital facility and the advances I just mentioned and I expect now going forward that all of the cash flows coming out of Moa for the foreseeable future will be in the form of the dividends. Secondly, the other kind of large positive here is that roughly $20 million of positive working capital changes during the quarter.

And there were two main factors driving that. Firstly, some pre-buys on our fertilizer sales out of the Fort Site, and typically we receive advance payment for fertilizer sales which will occur in the month of October during the course of Q4, but our cash is generally received in advance during the end of Q3 and that's been reflected in the working capital balance.

And secondly, we did receive around $14 million of collections on our energy business from Cuba and was covering both oil and gas and power. But despite those collections are overdue balanced it increased by approximately US $10 during the quarter to close at September being a $147 overdue.

While we expect, we'll collect all the receivables from our Cuban partner, the timing of these receipts is uncertain and continues to be uncertain. I mean that timing that will impact the cash movement through the course of the fourth quarter, particularly as we have higher interest payment in Q4.

I'm turning now to the Slide 18. This slide really as a response to a number of questions that we've received in recent quarters on how our EBITDA that we generate from our various businesses gets reflected within our cash flow and insurance cash balance.

So I do want to take a few minutes just to clarify a few items both on this slide and the next slide around that flow of cash. And this is as many on the call now more complex than most of our payers primarily because of the legal structures which we operate in and also some of the accounting rules which we're required to follow, which results in our joint ventures being equity accounted for.

So this Slide 18 really shows how and summarizes how cash is generated from our operations. And those are our recent Analyst Investor Day back in the second quarter of this year will be familiar with this slide, which really just summarizes some of the key movements of cash from our businesses.

I'll spend a few minutes now, I'm just touching on a few of these points. Firstly, starting at the Fort Site, the flow of cash there and I made reference to this already in the previous slide relates to the cash received for the sale of fertilizers from the ammonia plant that we operated at the Fort Site.

I'm generally speaking most of our sales happened in May and October of this year but the majority of the cash balance or cash received does occur generally in the third or fourth quarter of each year and so there is seasonality both in terms of the revenue that's recognized on that business and the timing of cash flows. For the Moa joint venture, as I mentioned, this is equity accounted for and so we don't consolidate any of Moa's cash onto our balance sheet and the inclusion of cash generated by Moa is based on and actually the movements of cash in one of three forms I've highlighted here on the slide.

Certainly cash can flow from Moa to Sherritt for repayment on the working capital facility that we provide to Moa. That working capital facility is now being fully repaid and you'll notice from our results that during the year and this was primarily in the first and second quarter, we received $25 million on the working capital facility and then we received another $10 million on advances in the third quarter.

So going forward now, all of the free cash flow generated by Moa will come to Sherritt and really one of two forms, one would be a repayments on the expansion loans and secondly, dividends. I'm reasonably agnostic in terms of where the cash, which of these two options the cash comes to Sherritt and just because we get the same amount of cash from the Moa JV either way.

But based on the terms of the expansion loan, I don't expect that they'll be any repayments on that in the foreseeable future and that most of the cash flow coming from Moa to Sherritt will be in the form of dividends. I do just want to highlight though that the Moa joint venture is not included in the references we make to overture receivables.

And the cash we received from the Moa joint venture is always timely and in line with the dividends declared by the Moa JV Board. And that's because the customs that we sell or the Moa JV sells is nickel and cobalt to our international customers and we receive that cash in offshore bank accounts to outside of Cuba.

On Oil and Gas and not much too really talk about that. Based on the oil that we produce each month, we provide invoices to the Cuban government based on the contractual terms that we have in place and then we receive cash payments on those invoices or be at the timing of those cash receipts is difficult to predict based on foreign currency availability within Cuba.

Next on to Power. So the Power business, we do consolidate the third of power within our consolidated financial statements and so third of the cash balance is included within our consolidated cash balance.

And the flow of cash from Power comes in one or three forms and summarized on this slide. First of is repayments on accounts payable.

And this is where Sherritt occurs that's in costs such as paying ex-pats or other services on behalf of any gas and any gas would reimburse Sherritt for those costs. Structurally cash paid to Sherritt is part of conditional sales agreements and that's really references the capital costs which Sherritt has incurred to construct the power plants in Cuba over the year.

Today, the capital costs that we've incurred for Varadero and the PE Power Plants have been fully repaid and the amounts are outstanding solely related to the steam turbine expansion at Boca. I mean so that gets repaid all of the cash flow generated by Boca is paid to Sherritt preferentially of the repayment on the conditional sales agreements.

The final flow of cash from Power to Sherritt it in the form of dividends and right now given that the Boca cash will come in the form of payments on the conditional sales agreement. The dividends really come from the Varadero and PE power plants where the capital costs have been fully repaid.

Now all of these cash flows from the Energas business to Sherritt are subject to Cuban foreign currency availability and similar to my comments on oil and gas, the timing of that is difficult to predict. And then the final comments I'll make on the slide is on Ambatovy and Steve already made this comment actually that in the - over the next few years, we do not expect that we putting any cash into Ambatovy or receiving any cash out of Ambatovy.

I'm turning now to Slide 19 and I know this is quite a busy slide, so I'll keep my comments on this side fairly brief. You know the purpose of this slide is really to help our investors and analysts understand how the adjusted EBITDA we report which was $41 million for the quarter really translates into the cash that we see on Sherritt's balance sheet.

So you can see from this slide, there is $41 million of EBITDA equates to roughly $18 million of operating cash flow and the difference is that primarily relate to interest pay due on the quarter of $8 dollars and taxes paid of approximately $9 million during the quarter. $17 million of operating cash flow across the various business units comes to Sherritt in various different ways as I described on the previous slide, but primarily one of the differences between what you see here an operating cash flow and the cash that comes to Sherritt is a fact that Moa JV's equity accounted for and we received cash flows from that business through dividends and you can see that highlighted on this slide.

There's also a cost capital expenditure which impacts our cash balance. So hopefully this slide provides a bit more detail and I won't walk through every number have, but a reference point for investors and analysts to really reconcile EBITDA through $10 million increase in Sherritt cash balance during the quarter.

And I'll finish my remarks on the next two slides, Slide 20 and 21 just making a few remarks about the change to our guidance which we Steve mentioned earlier. So firstly at Moa, since the first quarter of this year, we've been guiding that will be producing at the low end of the range for the guidance which we released and so we were tracking and we had a strong Q3 which were allowed which would have allowed us to achieve this tracking towards the 31,500 nickel production manually.

And as Dave mentioned and Dave will provide a bit more detail on this shortly, we were impacted in October by H2S supply disruption which resulted in reduced nickel production in the month of October. And as a result of that we've reduced our nickel guidance for the year and from that 31,500 which we were expecting down to 30,500 to 31,000 ton range.

And we've also updated NDCC balance and that's predominantly because of this reduction in production but also a result of softening in the cobalt prices and our NDCC guidance has increased by about $0.15 as a result of that. And finally on Slide 21, just a few comments on the update to our CapEx guidance.

Moa, you'll see that we've reduced our CapEx guidance down by about $10 million and this is on a Sherritt share basis. And this is really due to a reassessment of our capital projects and a deferral of some capital - some of this capital now into 2019.

Oil and Gas, our capitalist been increased by about $4 million for the year and this is a result of the extended drilling which is required at Block 10 and again Dave will make some more comments on this shortly. So in that note, I'll hand over back to Dave.

Alright. Thanks Andrew.

Just before we take your questions and there are a couple or three matters here I'd like to just provide a bit more color and context around. The first as Andrew mentioned is this disruption of our hydrogen sulfide or H2S supply that we've been dealing with here in October at the Fort.

H2S it's a reagent that we use in the refining process to remove impurities from the finished nickel and cobalt, including precipitating out traces of zinc and copper that turn up in the ore. We were notified during the month by our supplier that they received a stop delivery order from the provincial regulator and the order was issued because the supplier's emergency response plan was not compliant with the provincial regulations.

We've had been dealing with the same supplier for over 20 years and H2S has delivered to the site via pipeline from their facility to ours. And as a result of this disruption, the production was reduced for a number of days in October.

We were putting in place redundancy plans in the capacity to receive H2S by rail car as well as by way of pipeline, but subsequent to that the stop order was subsequently lifted by the regulator and the suppliers resumed delivery of H2S to us. The Ford is now back up and operating at full capacity but there was a period of days there when we were at less capacity and that is really what is derailed us from achieving that low end of the production guidance for finish nickel and finish cobalt for the year.

I do want to note that obviously has no effect on mix sulfide production in Cuba, so the mine in Cuba continues to run well and we do have now quite a significant inventory of mix sulfide production that will continue to carry that through the year which will keep the Fort well supplied through the balance of the fourth quarter and well into 2019 based on production of the mine in Moa. Also I want to talk to for a moment about Block 10.

We've seen the news and where we stand on Block 10. As we talked about the in the second quarter, we resumed drilling on the new side track in July, following spending the first half of the year identifying the technological solution to overcome the last circulation zones that we were experiencing in the upper reservoir.

Those of you've been following this will recall that we actually have an upper zone and a lower zone and we are targeting the lower zone as that's where we had the oil discovery from a well previously back in 1994 that tested briefly about 3,700 barrel a day rate. Drilling continues today, over the last three months, we have drilled down through the upper reservoir and through the areas where we encountered the loss of circulation in past attempts.

It was here that we deployed to the expandable casing technology that we had identified t beginning of the year is the solution to it give us the extra casing capacity to overcome those zone. That expandable casing was successfully deployed and achieved its objective in terms getting us through the upper zone and drilling on beyond and down towards the lower reservoir.

Since deploying the casing, we did resume drilling, between the upper zone and the lower zone, you do counter two other zones in the geological formation. As a result of this fold and trust geology that we've been working with in Cuba for the last 20 years in the form of both what is known as Constancia and then lower Vega Alta.

We drill down through the Constancia and down into the lower Vega Alta and we're not far off where we anticipated seeing the lower reservoir. We're expecting to encounter the lower reservoir around 5,100 meters and we were down past 5,000 when we had some wellbore instability in the Constancia.

That caused us to back up and begin redrilling from the bottom of the expandable casing. So that's the drilling that is underway now.

We will then it get through the Constancia and seal that less stable zone in behind the next string of casing and then be drilling on down into the reservoir from there. Our current plans we expect, it's about $60.00 to $90.00 days now to complete the drilling and as soon as we have more news to share with you on that you can be confident that we'll be back to you with that.

Lastly, I wanted to just touch on capital allocation and growth strategies. We've had a number of questions on this over the last few weeks particularly as optimism around nickel prices for the longer term here continues to grow and people asking what our plan approaches to growth opportunities.

So I want to speak, just highlight a couple points for you on capital allocation and our approach to capital allocation. The priority for the last few years has clearly been on debt reduction and that continues to be our top priority.

We've paid off I think somewhere north of $2 billion in debt or eliminated north of $2 billion in debt from our balance sheet in the last few years and seeing those debt levels continue to come down is our intention. The reality is we've not had a lot of discretionary capital to apply in the last few years and these prices that still hasn't really changed what discretionary capital we have had we have used for debt reduction.

The only real growth capital spending we've seen the last few years was on the construction of the acid plant. And that plant in Cuba is now up and running well, it has an IRR north of 50% and the payback in less than two years and it is performing as expected.

We've also done a lot of work in the last few years and internally to bring more focus and then discipline to our approach to capital allocation and we apply that now to ensure that the investments we need to make into our businesses to maintain safety in production and you're seeing the benefits of that in some of the initiatives to achieve greater stability and predictability in our production and some of the initiatives Steve was telling about. We are investing in the drilling in Block 10 to demonstrate that there's a viable business opportunity there for the next 20 years but any further investment beyond that will be time to collections of our accounts receivable in the oil and power business and cash flow from our nickel business won't be going to further drilling in Cuba beyond this well.

Lastly, I just want to talk about Ambatovy, you've seen the where our intention is still no cash in and no cash out. You'll note in our press release we did highlight that the escrow account that was set up at the time of the restructuring has now been fully drawn subsequent to quarter end.

That escrow account fulfills our obligations for equity contributions to the project that we made to our partners as part of the restructuring that was completed at the end of last year whether Ambatovy needs more cash from its shareholders at this point in time and going forward from here will is obviously a function of future commodity prices and future production. But from our perspective as we look at capital allocation here this point in time given that capital structure of the Ambatovy project at the moment in the long timeline before there is cash available for distribution to shareholders and that project additional capital allocation to the Ambatovy joint venture at this point in time is not a priority for us I would say.

That highlights what we wanted to and covers what we want to highlight for you this morning. We are pleased with the progress we're seeing in the Moa joint venture in particular in terms of its ability to generate cash flow and deliver on its production plants and that's where our focus will continue to be going forward as we work through these current market conditions.

With all of that said now, operator we'd be happy to take any questions anybody may have.

Hi good morning. Couple of questions for me.

First of all David you just touched on it briefly here at the end about Ambatovy, but I'm not sure I really understand. So the escrow account is effectively consumed at Ambatovy.

If there is - I mean at this commodity price there could be I assume you know next year we could see a situation where there is a cash call to at Ambatovy. Are you saying that you're not planning to meet those cash calls and should we assume then that the consequence of not making any cash calls, is that your ownership would get diluted from the current 12% or am I just misunderstanding?

The way to look at it right now or as to what I can tell you that there is obviously the possibility that Ambatovy will need more cash and it may well be okay for the next few months but the reality is that you know and I'm sure they have in the back in mind the reality and the rubber will hit the road for Ambatovy when the amortization is scheduled and the project financing kicks back in June of next year. I think what you'll see happen between now and then is there will be more conversations among the partners and they'll be more conversations with the senior lenders on that amortize schedule given that that project financing down there is no recourse to the partners.

And none of the partners are particularly keen to put more cash in this point in time. But from our perspective at the moment, it's true that based on what did little discretionary capital we have to allocate and the opportunity we have to deploy what cash we are going to generate here in the near term in our other businesses and then towards debt reduction is that allocating additional cash to Ambatovy at this point in time is probably the least attractive of all the opportunities to deploy capital.

And so we will see how the conversations with the lenders play out and have conversations with partners come out. But under the current structure in the current situation there's no incentive from our perspective to allocate more capital to Ambatovy and dilution could turn out to be a consequence of that, but there are quite a number of conversations to be had in the next six months before we see how that plays out.

Have those discussions with the project lenders, are those underway or is that still have to get going because those always seem to take a while?

They do always seem to take a while but there are conversations underway already, there are been regular communication really in the last 12 months and some meetings already on near and longer term cash requirements of the project.

Okay. And then just shifting gears on the Cuban overdue receivables, I mean they keep - it seems like they keep going out quarter after quarter now almost $150 million.

What's the strategy here in terms of you know reversing that and actually collecting this cash and do the Cubans have the ability to actually pay you and or could we see some kind of restructuring here as this balance continues to build?

So it is obviously a live issue for us and has been for several quarters now as the balances have continue to grow over the last 12 or 18 months. And you're right, it is getting to be a larger number.

Just for context again, it's not as big a number as it's been compared to where it went after the financial crisis when we did restructure those receivables and ultimately we made whole on them. But we are - I'm in Cuba regularly, others Andrew and others are in Cuba regularly.

Cuba has had a difficult time economically in the last 12 or 18 months with the chill of the Trump administration on new investment in Cuba, low nickel prices, low sugar prices, a weaker tourism season on the basis of fewer Americans traveling, higher oil prices, lower domestic oil production is all affecting the way they are approaching their business at the moment. Excuse me, I'm just trying to get over the last of the cold here.

Our approach right now and I think we're helped somewhat by the fact that the Moa joint venture now has cash available for distribution to shareholders and we continue to talk to the Cubans about trying to find a solution where we could potentially try and capture some of their hard currency flows out of Moa and reallocate that towards the joint venture. I'm back in Cuba again next week trying to make some progress on that, but it is slow making progress on this in Cuba.

They are also in desperate and keen to see their domestic oil production increase and I'm hoping as we have some success coming up here on Block 10 an opportunity for further investment to increase domestic oil production that that will also create some incentive for further collection on that. But it is still a live issue for us and we're talking to them about a variety of alternatives in terms of how we ultimately get recover these receivables.

They are still absolutely keen to assure us that they recognize that that is the money they owe us and it is their intention to make us whole on that they have worked with us on the past in on these sorts of issues in the past and we continue to work with them on these now.

But is that something we should see a resolution on you know in the next couple of months or could this sort of take another year or two?

I'd love to be able to put a timeline on for you and I don't have a specific answer for you for that. I'm hoping that it is in the months ahead here, we'll get a better sense of it each time we go down there.

But I don't have a date by which I can say this is the day we'll have a solution for them. We did see collections in the third quarter, we've seen some cash come in again in the fourth quarter and we continue to work to them and towards trying to find some more sustainable solution see these receivable balances start coming back down over time.

Two quick questions for me guys. What was or I guess what will be the total CapEx associated with the new fleet that was deployed in Q3 at Moa.

And how much of the 2018 CapEx will be pushed into 2019? That's the first question.

And the second one I guess would be with respect to Ambatovy, it continuous to struggle with production bottlenecks in the higher energy and silver costs, but these costs pressures aside, is there any visibility on when the ongoing production issues might be resolved and the operations might ramp up to something approaching nameplate employee capacity, the highest production level was 2015 as I understand it and it's just sort of down from there and I'm just wondering if there's any light in the tunnel with respect to Ambatovy because it is dragging on your adjusted EBITDA and earnings per share? Thanks.

Thanks Jacques. I think I'm going to get Andrew to just talk about that, give you a bit more detail on the capital and we can talk about Ambatovy in a moment.

Yes, thanks David. From a capital perspective, the Moa JV incurred and was in the region of $20 million in the year for some additional trucks which arrived through the late second quarter in which allowed the mine to able to perform better during the course of Q3.

And how much of your CapEx we pushed into 2018, I think Andrew you made reference to that being one of the reasons why the CapEx was lower in 2013 with a new guidance?

Roughly, the number I gave you Jack just on trucks with 100% number. You'll see from our guidance change, our guidance is declined by 20 million on a 100% basis or 10 million from a Sherritt perspective and I would say the majority of that has been deferred into 2019.

Great. Okay, thank you.

Yes. Thanks.

Dave there's been a lot of chatter in the last week or so about the Chinese I think building a nickel sulfate plant in Indonesia to produce if from later, given your experience at Sherritt, how technically feasible do you see that?

Thanks Greg. Jacques, we did have a second question from you on Ambatovy, I'll come back to that in a moment, I just don't want to lose sight of your question here.

You right Greg, for the benefit way also in the call, the stainless steel company out of China that has been active in Indonesia in the last two years building faro nickel and nickel big iron facilities has recently announced that they are intending to build in Indonesia nickel plant that will produce an intermediary Class 1 nickel product that could also be taken back to China and converted to nickel and cobalt sulfate and ultimately into for battery production domestically in China. And the initial capital numbers and timeline to construction they put on that from I think a 50,000 ton a year plant are quite aggressive compared to what the past experience has been.

We've been looking at that there is not a tremendous amount of detail available yet publicly from what we've been able to come across in terms of what that plants and their plans in compass. In terms of the basic HPAL units are compared to supporting utilities like gas and production or what the plans are for tailings management and disposal.

As far as we know from the technology provider that they're using in China that our technology people have some familiarity with there is no breakthrough technology here that is radically different from what has been done in HPAL in the past, but we don't have a lot of specifics yet in terms of how they've arrived. I think $700 million budget that they put out for this.

Technology as people continue to try and look at what's been - information there is out there publicly and to try and put together what it is they're doing, but this is obviously a much more aggressive budget and timeline to Ambatovy production and to nickel and cobalt production that Ambatovy or other HPAL facilities have been able deliver on the past. Clearly some capital savings comes from not having to build a full metals refinery, they will be producing an intermediary product like an oxide or hydroxide that could ultimately then be more easily converted to a sulfate.

But it is a certainly an interesting development that will be continued to see how that develops and see what more information we can learn on it. But certainly compared to past history those are much more aggressive capital numbers and timeline to production numbers than the world seen thus far.

But it is technically feasible to do what they are planning to do?

The process as best as we can understand it in terms of actually processing ore into nickel and cobalt intermediary products is not dissimilar to what is done at other HPAL facilities in the world as best as we can understand it today. So there isn't a new revolutionary technology there.

It's a question of can they do it for the cost and timeline that they're talking about which obviously hasn't been achieved before.

Right. Okay, thanks Dave.

It does, I may illustrate that there is a concern I think in China in particular about the future availability of Class 1 nickel supply to ultimately meet anticipated future demand in nickel and cobalt for anticipated battery production into the next decade. And you know we're certainly seeing that from battery makers in China in terms of that long term concern and I think this is evidence that concern from their perspective is real.

Yeah, sure. Thank you.

If I can take a moment, I want to just come back and coverage Jacques question there as well. Jacques, you asked about Ambatovy, I can give you a little context on that.

I mean obviously the challenges in Ambatovy bin the last couple years has been around equipment reliability and consistency in production numbers. We talked a bit about this when you and others were out of the - in Fort Saskatchewan in terms of plans there.

There is ongoing efforts on the ground with the management team down there to improve equipment reliability and on time it was something like 220 different circuits there on getting the preventative maintenance regimes right and other initiatives to improve asset reliability in dependability. That is going to take some time.

I don't know, I think that process will be ongoing through 2019 and beyond and there's obviously a history there unexpected and unanticipated or unexpected events from storms to equipment failures adversely affecting production. From our perspective, I think the efforts that are happening on the ground there are the right things that need to be done and we continue to watch that and see that develop.

But from our perspective you know we're with the production profile is going there and that the structure of the debt that it's less material to us today given that there's a within a pretty wide range of production down there, there's no cash coming out of Ambatovy to shareholders anytime soon based on the cash suites for the lenders and not much incentive for us to put cash in.

Good morning and thanks for taking the question. I guess kind of turning to block panel just kind of thinking about the strategic outlook there, it's certainly been a bit of a delayed process, what's kind of outlook in terms of your confidence level on ultimately the first wellbeing commercial then the second well and perhaps strategic transaction 2019, I know it's a little bit difficult to say but a little bit of a disappointment to again in the just reported results on that front?

Yeah, well I mean our view in the quality of the reservoir is unaffected by any of our drilling activities so far this year. We've always like the reservoir in part because we actually have seen oil out of the reservoir of at least for a brief period of time 20 years ago from this well that we drilled from the jack out in the bay and none of the drilling challenges that we've encountered in the last 12 or 18 months have changed our view on that.

The overcoming the last circulation zones and getting through that upper reservoir upper zone that we achieved in the second quarter having successfully deployed. That expandable casing technology was a big success for us, we're actually quite pleased with that.

The sloughing off that we had in the hole here in the wellbore instability that we encountered in the third quarter here is not an uncommon occurrence particularly in drilling in new areas as you get to know the geology better you know for future holes really and this will affect and where we determine, where we pause and said casing given that we know now how long these sections take time to time out. And it is not an insurmountable challenge or is a mysterious run expected as the last circulation challenges that we're encounter in the upper reservoir.

So our degree of confidence in terms of our ability to ultimately reach total depth of this well hole and get into that water reservoir and see what's there continues to grow. And as we look ahead to 2019 and once we get this well on a production, there will be a testing period of several weeks and months when we see what kind of oil flow rates we see out of the well and how well those flow rates flow up that well then how - and how well they stand up over time will enable us to do more sophisticated math on what the returns look like on subsequent drill holes as well as develop a more comprehensive and executable plan for what subsequent drilling looks like based on all the learning that has come from this more of an exploratory well in the block and then we'll be looking at how does drilling campaign get financed with the possibility of bringing in partners as we've talked about in the past to fund that drilling capital on unnerving basis.

So they'll be more detail on that I hope over the course of next year as we have some drilling success here ideally in the next 60 or 90 days but the plans are for longer term plans that we have talked about for development of that asset and realizing and demonstrating some value in the oil business over the long term remain unaffected as from our drilling activities in the past quarter.

So I guess to put it more simply or a different way to look at it, is your comments a little over 50% that ultimately the company will be able to declare at least two wells commercial and then look for a strategic transaction or there's just not enough information to know either way to try to attach any sort of particular actual quantifiable probability?

We don't have, there's nothing really new. Our confidence in our ability to get into that into the lower reservoir continues to grow having successfully traversed the upper reservoir.

And there's no change in our confidence level in how much with the extent of which there is a lot in the lower reservoir because we're not there yet and until we actually get in the reservoir and see some flow rates. I really don't have any new information to give you in terms of what our confidence levels there.

We went into this well and took this well on because we were pretty confident that there was oil there based on the discovery 20 years ago. But now until we can actually get a bit in the well into there and start putting it on production and seeing some oil flow and some flow rates, there's really nothing that we can add to what we've been talking about the last couple quarters.

Now the priority is to get on with the drilling to get into that reservoir and see where we've got there.

And then going back to another person's question just about the overdue receivable which the exchange rate is calling almost Canadian 185 million. What is the thought about being a little bit more profitable, maybe even monetizing and selling it to a different party just as part of a generation liquidity and ultimately way to address the 21 among other potential uses?

And then going back to another person's question just about the overdue receivable which the exchange rate is calling almost Canadian 185 million. What is the thought about being a little bit more profitable, maybe even monetizing and selling it to a different party just as part of a generation liquidity and ultimately way to address the 21 among other potential uses?

We have looked at operatives and to monetize that discounting factor at the reality is that there is nobody that is looking to take on Cuban credit risk that has the level of comfort or confidence in that we do. So that the given, that we still ultimately believe that we can collect on that compared to the rates at which it could be monetized at this points, now we still don't think that is attractive because we have been really realize enough to make it worthwhile.

And then just my last question. Thank you for your patience.

I guess from a very high level view looking at nickel and demand continues to outpace supply but pricing continues to somewhat languish, is this just a dollar currency headwind or is there something else going on or is the market fearful of demand out of China prospectively in 2019 or what I think is kind of the disconnect just looking at nominal nickel prices versus the macro picture which looks fairly positive?

I don't have any one magic answer for you for that, I think there's a number of factors at play that are affecting base metals across the board at the moment because I think the underlying supply and demand fundamentals for physical nickel in particular are better today than the price reflects. But I think in the last few quarters, you've seen sentiment turn quite negative on global growth.

Generally in China growth you've seen some disappointing industrial data out of China in the last few weeks. I think the potential for a protracted trade war between the U.S.

and China and what impact that has on Chinese growth rates over the next few years is weighing pretty heavily. You know strong U.S.

dollar is always generally an inverse relationship to commodity prices. So I think it is kind of a confluence of events at the moment that have caused sentiment to be quite bearish.

But as I said I still think even today in the perspective go forward prospects of the nickel market are better than the today's market price reflects. And the announcements of the stainless steel company made in Indonesia a couple weeks ago that Greg was asking about I think have raised some questions for people in the near term here as well.

But ultimately I still believe that nickel prices ultimately have to reflect supply and demand fundamentals for physical nickel and we still think that is a pretty good picture.

And given the disconnect between physical supply and demand and sort of sentiment and the opportunity creates for the company to continue to repurchase that below par what are the thoughts on that just given the liquidity picture being over 200 million at this point, is the appetite do cautious or how do you think about that?

Looking at opportunities to do it or is attracted to us, we are just trying to make sure we do have a handle on where our cash position is going to go in the near term here and by that will be an ongoing conversation internally here as well we see how cash comes in both on the receivables and in nickel receipts. Obviously the nickel price has been declining, we're down to about what 5.25, 5.30 I think this morning, so that's off 20% or 25% last two or three months, we do want to make sure that trend isn't going to get a lot worse before it gets better but then as we see how our cash position unfolds looking at opportunities to continue to proactively work those debt levels down will be where our focus will be.

Well, I'll just thank everybody once again for joining us. We will be back before the end of the year with updates on an ongoing cobalt price that affects the warrants and then as other operations and events unfold, in any event we will speak to you again in this forum when we release our Q4 results in February of next year.

Thanks very much for joining us this morning. I'll speak to you soon.