Noranda Income Fund Unit T.NIF.UN

Due Diligence

[abner29]

Of course, do your own.  However, examining NIF a number of aspects jump out to suggest that it may be an outstanding buy for current income and possible appreciation.  It seems to have established a reasonably firm base at the $4 level with a yield an astounding 25% at that level.  With zinc so prominent in its identity and zinc getting such negative media commentary it's understandible that superficial investment attitude would be as it is.  Counter to the superficiality the fact that NIF is a processor of zinc, the largest in the eastern half of North America and well placed to serve an extensive number of historic customers.  It seems they are somewhat immune to the price, since they profit from the refining, not production.  Also, the by product sulfuric acid is in very short supply and selling at very profitable levels - expected to extend through 2009.  The preferred position of public unitholders for the distribution provides a cushion not available elsewhere.  From the current $4 level it shoulc make sense for parent Xstrata to contemplate reabsorbing NIF at a figure much higher than this, yet well below the IPO of $12.