A U.S. investor consortium featuring Glencore (LSE: GLEN) has put forward a recapitalization proposal for Sherritt International (TSX: S), seeking to take control of the struggling miner as it faces an uncertain future following the suspension of its Cuban operations. Sherritt shares surged on the news.

The group, which also includes London-based Kyma Capital, Brevan Howard Asset Management co-founder Trifon Natsis, and an unidentified U.S.-based anchor investor, submitted its offer to Sherritt on June 26, according to a statement released Monday. The bid provides immediate equity funding at 12¢ per share with no third-party debt-financing condition attached, and grants eligible existing shareholders the right to participate at the same price as the consortium.

"This is a funded, inclusive proposal at a price with no discount, from investors who know this company, with a credible path to the noteholder consent any transaction must have and with constructive engagement already underway in Washington," the consortium stated. "We are not asking the board to abandon its process. We are asking it to compare proposals — and to let the better transaction win on the merits."

The offer represents an alternative to a transaction Sherritt has been negotiating with Gillon Capital, which centers on a warrant structure that could ultimately hand Gillon control of the company rather than delivering immediate equity capital. Sherritt has indicated that discussions with Gillon remain ongoing.

The proposal arrives as Sherritt confronts a severe liquidity crisis triggered by the May shutdown of its Cuban joint venture amid expansive U.S. sanctions, followed by the closure of its nickel and cobalt refinery in Fort Saskatchewan, Alberta. The crisis puts at risk a strategically significant asset: both the U.S. and Canadian governments have designated nickel and cobalt as critical minerals essential to energy transition supply chains, raising the policy stakes for any resolution.

In Toronto trading Monday morning, Sherritt shares climbed approximately 26% to around 15¢ each, giving the company a market value of roughly $107 million (US$76 million). Over the past year, the stock has fluctuated between 6¢ and 25¢.

Majority Stake Structure

Under the terms disclosed Monday, Sherritt would be acquired through a U.S.-based entity that would hold a minimum of 55% of the company on a fully diluted basis upon completion.

U.S. authorities have already confirmed in writing that neither the State Department nor the Treasury Department objects to the consortium engaging in negotiations with Sherritt, according to the investor group's statement.

If the transaction proceeds, the consortium pledged to collaborate with Sherritt to stabilize its capital structure and liquidity position; safeguard and strengthen the Fort Saskatchewan facility along with the company's broader North American nickel and cobalt processing capabilities; and create a "compliant pathway" for the business to participate in critical-minerals supply chains. A dedicated board-level sanctions, national security, and compliance committee would also be established.

Bondholders Demand Engagement

On Friday, a coalition of Sherritt bondholders holding a majority of the company's 9.25% notes due in 2031 urged the board to immediately engage "with all credible alternatives."

The bondholder group cautioned that any effort by Sherritt to present debt investors "with a take-it-or-leave-it transaction after outcomes have effectively been predetermined" would be rejected. "Meaningful engagement with noteholders must occur before key economic and governance terms are finalised in any transaction requiring noteholder consent," they stated.

Sherritt halted its direct involvement in Cuban joint venture operations on May 7 after the administration of U.S. President Donald Trump broadened sanctions against Cuba. While Sherritt has not been formally designated under the U.S. order, the measures significantly disrupted the company's ability to operate as normal.

The Moa joint venture — a 50-50 partnership with Cuba's state-owned General Nickel — has long served as the cornerstone of Sherritt's nickel and cobalt business. The vertically integrated operation mines and processes ore in Cuba, with the resulting material shipped to Fort Saskatchewan for refining. According to Sherritt, the Alberta facility is the only significant cobalt refinery in North America and one of just three nickel refineries on the continent.

Operational Headwinds

Sherritt's challenges extend beyond the current Cuban crisis. The Moa operation experienced below-expected production throughout 2025, which the company attributed to reduced ore volumes, unplanned maintenance, and difficult operating conditions in Cuba.

Last month, Sherritt warned that it required substantial new capital to fund a restart and that constrained liquidity had created material uncertainty regarding its ability to continue as a going concern. The company also noted that restart costs had risen due to sharply higher sulphur prices.

The U.S. consortium contends its proposal would deliver not only fresh capital but also strategic and operational expertise to Sherritt's nickel and cobalt platform. Glencore, the group emphasized, would contribute relevant technical, refining, marketing, and critical-minerals capabilities. Glencore already operates nickel mining and refining assets across multiple jurisdictions, including operations in Canada and Norway, which could complement Sherritt's processing infrastructure if a deal materializes.

Sherritt is scheduled to release its second-quarter results on Wednesday after market close. The company has stated it will not hold a quarterly conference call that day.