Letter to Shareholders
Dear Fellow Shareholders,
Your investment in Sherritt is under imminent attack from a reckless and self-interested supplier/shareholder looking to take control of your Company without offering a credible plan to create value or a premium.
Ahead of Sherritt’s Annual and Special Meeting of Shareholders, I am writing to ensure you have the full context about SC2 Inc.’s intentions and to highlight the significant progress your Board and management team have made in delivering value for all shareholders.
Your vote is critical to safeguarding the future of your investment in Sherritt. We strongly encourage you to vote FOR all nominated directors and resolutions, as recommended by leading independent proxy advisor Glass Lewis.
Sir Richard Lapthorne
Chairman, Board of Directors
Key Highlights from the Letter to Shareholders
SC2’s Conflict of Interest
SC2, a shareholder affiliated with Seablinc, poses a significant conflict of interest. SC2’s actions appear to prioritize Seablinc’s supplier agreements over the broader interests of Sherritt shareholders. During SC2’s past investor meetings with Sherritt, a Seablinc representative and former Sherritt employee, led the meetings.
Exposing SC2's Self-Serving Motives
Seablinc’s revenue from the Moa JV has declined significantly – from approximately US$145 million in 2022 to an expected US$50 million in 2025 – as a result of Sherritt’s improved bidding processes and cost discipline. Rather than competing fairly, SC2 and Seablinc are attempting to take control of your Company to reverse these losses while ignoring potential severe implications for othershareholders. For example, changing all or substantially all of the Board could cause defaults under key agreements and could materially affect or accelerate certain material debt obligations
SC2/Seablinc’s History of Self-Serving Actions
SC2 and Seablinc have a history of disruption, misrepresentation and opportunistic tactics to interfere with and threaten your investment in Sherritt, including:
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Failed Mini-Tender – SC2’s first act upon incorporation in April 2024 was to launch a mini-tender for Sherritt shares which was ultimately unsuccessful.
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Failed Board Representation Attempt – In April 2024, a law firm acting on behalf of Seablinc emailed Sherritt stating its intention to nominate someone for election as a director. This attempt failed, with no formal nomination made.
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Misleading Engagement – Seablinc first approached Sherritt as an investor during a critical time – right in the final stages of the Moa Joint Venture bid process for a major input commodity contract. This timing was not a coincidence. It appears Seablinc was using its shareholder status to pressure Sherritt into awarding them the contract, attempting to influence the decision by presenting themselves as an investor with leverage.
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Deceptive Commercial Activities – In January 2023, Seablinc alleged there was illegal activity being conducted by a rival supplier. An investigation by independent third parties confirmed no illegal activity occurred. This caused distraction and costs for Sherritt and the rival supplier.
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Unprovoked Public Campaign – SC2 has issued multiple misleading press releases aimed at destabilizing Sherritt and undermining confidence from shareholders, other suppliers, customers and financial institutions.
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Invalid Meeting Requisition – SC2 knowingly made an invalid requisition of a special meeting in January 2025 and chose not to comply with the law.
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Multiple Failed Attempts to Block Debt Restructuring – SC2 tried multiple times to block Sherritt’s transformative debt restructuring in the last two months and walked away with no success, only disruption and added cost to Sherritt.
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Withhold Campaign – SC2 is now urging shareholders to vote against your Board's nominees without offering a credible plan, roadmap or demonstrated capability to lead the Company.
SC2’s interests not aligned with those of other shareholders
SC2's actions are concerning as it has not disclosed its full intentions, and it effectively borrowed shares to gain influence without a long-term commitment to Sherritt. A third party holds an irrevocable option to acquire almost 75% of SC2’s common shares of Sherritt at any time between August 1, 2025 and May 1, 2026, indicating SC2’s short-term and opportunistic interests are not aligned with value creation for all shareholders.
Meeting Logistics
Record Date
Wednesday, April 30, 2025
Meeting Date
Tuesday, June 10, 2025, 10:00 AM (Eastern Time)
Meeting Location
Torys LLP, Toronto Dominion Centre
79 Wellington St. W., #3300 Toronto, Ontario M5K 1N2
Stock Information
Transfer Agent: TSX Trust Company
CUSIP: 823901103
ISIN: CA8239011031
Exchange: TSX: S
Resolutions
1. Re-appointment of Auditor & Approval of their Compensation
You will vote on re-appointing Deloitte LLP, Chartered Professional Accountants, Licensed Public Accountants (Deloitte LLP) as our external auditor for the 2025 financial year and authorize the directors to set the auditor’s compensation. Deloitte LLP has served as our auditor since November 1995.
The Board of Directors recommends a vote FOR this proposal
2. Stock Option Amendment
Based on shareholder feedback and compensation reviews by independent advisors, in 2023 Sherritt re-introduced stock options as a form of executive compensation. However there was insufficient inventory to issue additional options for 2025 compensation. The stock option inventory was last approved and updated in 2010 and set at 17.5 million options available for grant of which 6.4 million have been exercised between 2010 and 2017, 7.9 million are issued and outstanding, leaving an inventory at April 29, 2025 of 3.2 million.
The Board of Directors recommends a vote FOR this proposal
3. Vote on Executive Compensation
Our executive compensation program is designed to pay for performance and align the interests of our executive team with the long-term interests of our shareholders. We hold an annual advisory vote on “say on pay” to support good governance and to give shareholders the opportunity to approve our approach to executive compensation as described in this circular. Last year we received support for our approach to executive compensation with 64% of the votes cast in favour.
The Board of Directors recommends a vote FOR this proposal
Voting Is Easy!
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Click here to read the Notice and Overview of our 2025 Annual Meeting of Shareholders
Call, text or email a Kingsdale Engagement Specialist:
Call - 1-866-229-8263 (North America Toll Free)
Text or Call - 1-437-561-5030
Email - contactus@kingsdaleadvisors.com