OTCPK:NNDIF - Post by User
Post by
Bwrbhkon Oct 11, 2022 5:26pm
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Post# 35018242
TC's in the 2ndH
TC's in the 2ndHIn the 1st H of 2022 Noranda's adjusted EBITDA was a dismal negatinve $3.1 million. In the 1st H of 2022 they treated 239,000 tonnes of zinc concentrate.
The TC's that Noranda received in the 1st H of 2022 were based primarily on spot TC's that were in place in late 2021 and very early 2022, which were $85/t.
Spot TC's started moving higher in January and are currently in the order of $250/t.
Effective May1, 2022 Noranda and Glencore agreed that TC's for the next 12 months would be 60% fixed and 40% market related. In the previous 12 months they were 100% market related. Noranda does not disclose what the fixed portion is based on or what the market related TC's are based on. I would interpret this to be 60% based on benchmarrk TC's (currently $230/t) and 40% based on spot TC's (currently $250/t).
It is not unrealistic to think that TC's in the 2nd H of 2022 could be as much as $150/t higher than what was received in the 1st H. If they process the same amount of concentrate in the 2nd H as they did in the 1st H, this could add as much as $35 million to adjusted EBITDA in the 2nd H vs. the 1st H. This assumes no improvement in operating results which were adverslety impacted by labour shortages and other operational issues which probably cost them more than $20 million in the 1st H of the year.