Noranda Income Fund Unit T.NIF.UN

Simple Math Part Deux

[Bigbird999]

Whether the stock price continues to fall or reverses doesn't matter.  The operation will continue to treat 45,000 t per month of concentrates which will generate $5 -$6 million per month in cash (45,000 x $130 earnings per t con = $5.8 million).  This is going to continue for the foreseeable future.  They usually announce the monthly distribution around the 21st (this Friday).  What will it be?  My bet is that it will be the usual 4.17 cents per share (= $2.5 million which is <half of the cash generated) and use the remaining $3 million in cash generated to pay down debt.  They can't/won't sit on $2.5 milllion a month in cash and they can't hide it so they will distribute it......21% dividend rate at today's price. 

The falling stock price is not based on any change of the cash generating capability of this profitable zinc concentrate treatment machine.  It is simply a stock manipulation and it will recover to a price that reflects the earnings that it can generate.

Consider that the market capitalization is now about $80 million for a facility that would cost 10 times as much to build.  Plus it generates almost the entire market cap in cash every year. 

I believe that we have heard nothing from management because their actions will speak on Friday when they announce a regular distribution.

I am definitely a buyer tomorrow.