EARLY WARNING REPORT ISSUED PURSUANT TO NATIONAL INSTRUMENT 62-103 IN RESPECT OF THE ACQUISITION OF SHARES OF SHERRITT INTERNATIONAL CORPORATION

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CALGARY, AB, Dec. 10, 2024 /CNW/ - SC2 Inc. ("SC2") today announced that SC2 has filed an early warning report under National Instrument 62-103 – The Early Warning System and Related Take-Over Bid And Insider Reporting Issues (the "Early Warning Report") in connection with its acquisition of 40,044,000 common shares ("Common Shares") of Sherritt International Corporation ("Sherritt") from a shareholder of Sherritt (the "Vendor").

Pursuant to a private share purchase agreement dated December 10, 2024 (the "Share Purchase Agreement"), between SC2, the Vendor, and an officer of the Vendor acting in his individual capacity, SC2 acquired from the Vendor (through the facilities of the Toronto Stock Exchange) 40,044,000 Common Shares (the "Acquired Shares"), at a price of C$0.155 per Acquired Share, for total consideration of C$6,206,820.00 (collectively, the "Transaction"). 

Prior to entering into the Share Purchase Agreement and completing the Transaction, pursuant to a separate private share purchase agreement dated November 27, 2024, as amended by an amending agreement dated December 4, 2024, between SC2 and Ewing Morris & Co. Investment Partners Ltd. (on behalf of certain funds and accounts managed by it as investment advisor and/or investment manager) (collectively, "Ewing Morris"), effective as of December 4, 2024, SC2 transferred beneficial ownership, direction and/or control over 19,003,570 Common Shares (representing approximately 4.78% of the issued and outstanding Common Shares) to Ewing Morris at a price of C$0.21 per Common Share, for total consideration of C$3,990,750. As a result of the foregoing, Ewing Morris and SC2 may be considered to be joint actors.

Immediately prior to the Transaction, SC2, together with the sole director of SC2 (the "Director"), directly or indirectly had beneficial ownership of, or control and/or direction over, an aggregate of 129,000 Common Shares, representing approximately 0.03% of the issued and outstanding Common Shares. Immediately prior to the Transaction, on a combined basis, SC2, together with Ewing Morris and the Director, directly or indirectly had beneficial ownership of, or control and/or direction over, an aggregate of 19,132,570 Common Shares (19,003,570 of which were beneficially owned, directed, and/or controlled by Ewing Morris and 129,000 of which were beneficially owned, directed, and/or controlled by the Director), representing approximately 4.82% of the issued and outstanding Common Shares.

Immediately following the Transaction, SC2, together with the Director, directly or indirectly had beneficial ownership of, or control and/or direction over, an aggregate of 40,044,000 Common Shares, representing approximately 10.08% of the issued and outstanding Common Shares. Immediately following the Transaction, on a combined basis, SC2, together with Ewing Morris and the Director, directly or indirectly had beneficial ownership of, or control and/or direction over, an aggregate of 59,047,570 Common Shares (40,044,000  of which were directly or indirectly beneficially owned, directed, and/or controlled by SC2, 19,003,570 of which were directly or indirectly beneficially owned, directed, and/or controlled by Ewing Morris and 129,000 of which were directly or indirectly beneficially owned, directed, and/or controlled by the Director), representing approximately 14.90% of the issued and outstanding Common Shares.

SC2 acquired the Acquired Shares pursuant to the Transaction. The Acquired Shares are acquired in furtherance of SC2's investment objectives. SC2 may, from time to time, as market opportunities exist or develop, increase or decrease its ownership of Common Shares as permitted by applicable securities laws.

The Early Warning Report filed by SC2  will be available on SEDAR+ under Sherritt's profile at www.sedarplus.ca or may be obtained directly from SC2 upon request at the telephone number below.

ABOUT SC2

SC2 is a limited company that was incorporated under the laws of the Province of Alberta for the specific purpose of acquiring common shares of Sherritt.

FORWARD LOOKING STATEMENTS

Certain statements contained in this press release contain "forward-looking statements" and are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties that could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects", "intends", "anticipates", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Although SC2 believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Material factors or assumptions that were applied in formulating the forward-looking information contained herein include the assumption that the business and economic conditions affecting Sherritt's operations will continue substantially in the current state, including, without limitation, with respect to industry conditions, general levels of economic activity, continuity and availability of personnel and third party service providers, local and international laws and regulations, foreign currency exchange rates and interest rates, inflation, and taxes, and that there will be no unplanned material changes to Sherritt's facilities, operations and customer and employee relations. SC2 cautions that the foregoing list of material factors and assumptions is not exhaustive. Many of these assumptions are based on factors and events that are not within the control of SC2 and there is no assurance that they will prove correct. Important factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by such forward-looking statements include, among other things, industry risk and other risks inherent in the running of the business of Sherritt, foreign currency exchange rates and interest rates, general economic conditions, legislative or regulatory changes, changes in income tax laws, and changes in capital or securities markets. These are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of SC2's forward-looking statements. Other unknown and unpredictable factors could also impact its results. Many of these risks and uncertainties relate to factors beyond SC2's ability to control or estimate precisely. Consequently, there can be no assurance that the actual results or developments anticipated by SC2 will be realized or, even if substantially realized, that they will have the expected consequences for, or effects on, SC2 or Sherritt and their respective future results and performance. Forward-looking statements in this press release are based on SC2's beliefs and opinions at the time the statements are made, and there should be no expectation that these forward- looking statements will be updated or supplemented as a result of new information, estimates or opinions, future events or results or otherwise, and SC2 disavows and disclaims any obligation to do so, except as required by applicable law.

SOURCE SC2 Inc.

CONTACT INFORMATION: For more information about this news release, please contact: Casey McKenzie, President, SC2 Inc., Email: [email protected], Phone: [phone]