Peberco Advises Sherritt on $140MM Arrangement for Cuba's Block 7

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Sherritt has been advised by Peberco Limited ("Peberco") that Peberco has entered into an arrangement with a Cuban state organization in respect of the termination of the production sharing contract for Block 7 for aggregate cash consideration of U.S. $140 million.

Sherritt's Oil business in Cuba comprises 100%-owned production sharing arrangements, a 40-45% interest in several fields in Block 7 pursuant to a joint operating agreement between Sherritt and Peberco, and a significant amount of wholly-owned drilling and operating equipment and associated inventories.

Sherritt's share of net oil production from Block 7 is approximately 4,500 bopd or 26% of Sherritt's overall Cuban net oil production. As a result of the arrangements entered into by Peberco, Sherritt expects to receive approximately U.S. $60 million as its share of the proceeds upon closing of that transaction in respect of its interests in Block 7. Sherritt continues to own and operate its 100%-owned production sharing arrangements.


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