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IW Business Bulletin – November 5, 2021

Mosaic Company and Nutrien Announce Q3 2021 Results

On November 1, Mosaic announced the company’s Q3 earnings. Mosaic reported net income of $372 million for the third quarter of 2021, with revenues up 44 percent year-over-year to $3.4 billion and stronger prices offsetting lower volumes. Mosaic generated $423 million in cash flow from operations over the quarter with year-to-date cash flow of $1.8 billion.

As well, Mosaic’s second production hoist at Esterhazy K3 came online ahead of schedule and the Colonsay mine met its targeted annual run rate of approximately 1 million tonnes. Mosaic forecasts that its “total potash production is expected to exceed recent historical levels by the end of the first quarter of 2022, as Esterhazy reaches full operation.” The company also expects upward pricing momentum to continue, as approximately 90 per cent of Mosaic’s fourth quarter sales are committed and priced, and they are now seeing commitments into Q2 2022.

“Mosaic’s third quarter results were the strongest in more than a decade, as our business continues to realize the benefits of a favorable market amplified by our transformation efforts. From the acquisition and optimization of Mosaic Fertilizantes to the acceleration of our Esterhazy K3 potash mine and the recent restart of the Colonsay potash mine, Mosaic has evolved into a business that we believe can deliver results throughout the cycle,” said Joc O’Rourke, Mosaic president and CEO. “These efforts are generating significant free cash flow, which we are using to strengthen the balance sheet and invest in the business, while returning capital to investors.”

Nutrien Ltd. reported its Q3 earnings the same day, reporting net earnings of $726 million for the quarter.

“Nutrien delivered record earnings in the third quarter driven by the decisive actions we made across our business units and leveraging our competitive advantages to benefit from strong market fundamentals. The results demonstrate our ability to efficiently and reliably deliver crop inputs and services to our customers amid global supply uncertainties, and we remain focused on our essential role to support global food security and sustainable food production,” said Mayo Schmidt, Nutrien President and CEO. “We are raising full-year 2021 adjusted earnings guidance and expect this positive momentum to continue into 2022. We expect to generate significant free cash flow and to meaningfully strengthen our balance sheet through debt reduction, providing flexibility to deliver on future growth opportunities and return cash to shareholders.”

The company reported free cash flow of $2.8 billion from January to September 30, 2021 and repurchased 2.4 million shares in Q3 2021. Nutrien also expects to reduce long-term debt by $2 billion over the next six months.

ISC Reports Q3 Financial Results

November 3 saw Information Services Corp. (ISC) reporting its Q3 results. The company reported revenue of $41.4 million, an increase of 11 per cent from the same time last year. Net income was $9.7 million, and free cash flow was $13.3 million, up from $13.2 million a year earlier. ISC also announced  a quarterly dividend of $0.23 per Class A Limited Voting Share (“Class A Share”), paying on or before January 15, 2022 to shareholders of record as of December 31, 2021.

“We continued to deliver strong results in the third quarter of 2021, fueled by robust economic activity in the markets in which we operate. Overall, my confidence in ISC’s forward performance and potential is unwavering. We recognize that the strong economic activity we have seen in 2021, particularly in Saskatchewan, may not continue indefinitely and that uncertainty remains related to the continued impact of COVID-19. However, we have positioned the company well, we continue to optimize its performance, and we remain focused on our customers and our growth. All factors that will ensure our continued success,” said outgoing ISC president and CEO Jeff Stusek. Shawn Peters, ISC’s current executive vice-president and CFO will take over as president and CEO from Stusek on February 1, 2022. Stusek announced his departure from ISC earlier this fall.

Orano and Denison Mines Report Successful Test

Orano Canada Inc. (Orano) and Denison Mines Corp. (Denison) announced the successful completion of a five-year test mining program at their McClean Lake property. The joint-venture partners deployed a patented Surface Access Borehole Resource Extraction (“SABRE”) mining method at McClean Lake. The final stage of the project was completed over the summer, ending in September 2021. According the companies, “four mining cavities successfully excavated to produce approximately 1,500 tonnes of high-value ore ranging in grade from 4% U3O8 to 11% U3O8.”

Orano and Denison reported the project ended with no incidents, and “confirmed the ability to achieve key operating objectives associated with the test program – including targets for cavity diameter, rates of recovery, and mine production rates.” The ore is now at McClean Lake’s mill and expected to be processed by the end of 2021.

“The SABRE mining method is the result of long-term R&D and involves a mix of different equipment, technology and expertise,” said Jim Corman, Orano Canada president and CEO. “I’m proud of the work this operational team of drillers, mechanics and engineers completed this summer as they showed how agile this method can truly be. They demonstrated the Orano values of innovative thinking, cohesion and team spirit, revising plans throughout the summer to incorporate the learnings from each new drill hole.”

The success of the test program has led Orano and Denison to further examine the method’s use in future operations at their jointly-owned McClean Lake and Midwest properties.

“With this test result, SABRE has demonstrated that it is capable of mining high-grade uranium ore in the Athabasca Basin region. Orano, as operator of the MLJV, has diligently advanced the necessary R&D efforts as part of a long-term vision for developing a mining method that could benefit our joint venture. We are appreciative of Orano’s efforts to ensure the safe and successful development of this patented technology and look forward to jointly exploring its potential applications in the context of improving uranium markets,” said David Cates, Denison president and CEO.

International Flights to Resume at YQR and YXE

November 2 saw news that international flights can resume on November 30 from both Regina and Saskatoon airports. The federal government announced that due to vaccine travel requirements phasing in this month, more Canadian airports can see international flights land.

Effective November 30, 2021, international flights carrying passengers will be permitted to land at the following additional Canadian airports:

Saskatoon Community Foundation Hires Chief Investment Officer

SEI Investments Canada (SEI Canada) has been chosen by the Saskatoon Community Foundation to serve as the organization’s outsourced chief investment officer, overseeing approximately $81 million of Saskatoon Community Foundation’s assets.

Through the agreement, SEI Canada provides investment management and work with Saskatoon Community Foundation‘s Investment Committee to “strengthen the overall stewardship of the foundation’s assets.”

“Saskatoon Community Foundation’s Board of Directors and Investment Committee selected SEI as OCIO service provider after an extensive review, determining that SEI offers a good fit for our foundation: value, responsiveness, the ability to make proactive recommendations, and deep experience with the OCIO model. Our board and staff team is firmly committed to providing best-in-class investment oversight for our fundholders’ charitable investments, as they direct their charitable giving for a positive impact to create a vibrant community where everyone belongs,” said Carm Michalenko, Saskatoon Community Foundation’s CEO.

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