Toronto-listed Sherritt International on Monday issued a letter to shareholders urging their support for its board nominees and resolutions ahead of its annual meeting next month, as tensions escalate with dissident shareholder SC2.

The miner, which operates the Moa joint venture (JV) in Cuba, accused SC2 – an affiliate of major supplier Seablinc Canada – of attempting to seize control of the company for self-serving purposes. SC2 owns just over 8% of Sherritt’s shares and has announced it will vote against the company’s director slate, with the exception of newcomer Richard Moat.

“SC2 aims to control Sherritt for its own gain, without offering a credible plan or a premium, risking the corporation’s financial wellbeing and strategic progress,” Sherritt said in its letter.

SC2, for its part, has criticised Sherritt for ongoing operational shortfalls and eroding shareholder value. In a statement last week, it said: “In the aggregate, the company’s persistent underperformance, weak governance, and unwillingness to address shareholder concerns compel SC2 to withhold support from the current board.”

SC2 highlighted declining mixed sulphide production, constrained liquidity – down to $30-million in Canada at the end of the first quarter – and falling share prices. Sherritt’s stock has dropped about 55% year-on-year and more than 76% over three years.

Sherritt disputes SC2’s motives, calling it a “significant conflict of interest", given Seablinc’s role as a supplier to the Moa JV. It said SC2 was created to conceal Seablinc’s identity and suggested the campaign is a response to reduced revenue from Seablinc, which fell from about $145-million in 2022 to a projected $50-million in 2025 owing to more competitive bidding processes.

The company warned that replacing the board could trigger debt covenant breaches and risk its financial restructuring.

SC2’s critique extends to executive pay, which it pegged at around $7-million in 2024, which it said was about 10% of the company’s market cap. “Generous stock-based awards continue despite financial underperformance,” the firm said. It also called out “excessive overhead", pointing to Sherritt’s multiple office locations and full executive team.

Sherritt defended its track record, noting that it had reduced debt by more than $200-million since 2022 and improved its capital structure through recent transactions. It also cited progress at the Moa JV, including commissioning of the Phase 2 processing plant and enhancements to the Energas power business in Cuba, which is projected to deliver between $25-million and $30-million in Canadian dividends in 2025.

The miner said that SC2 had “no credible plan” and a track record of failed attempts to influence the company – from a rejected mini-tender to an invalid requisition for a special meeting.

Independent proxy adviser Glass Lewis has recommended shareholders vote for all of Sherritt’s resolutions and board nominees.

Sherritt urged shareholders to cast their votes before the June 6 deadline and contact proxy solicitor Kingsdale Advisors for assistance.

The company’s annual meeting is scheduled for June 10.