Noranda Income Fund Unit T.NIF.UN

RE:RE:RE:RE:ZINC TC's continue to rise

[Bigbird9999]

We do know every detail of the contract EXCEPT the TC and Premium.  It is posted on Sedar with only the TC and premium redacted.  They provide a global premium received every quarter in the MD&A.  It is 7 to 7.5 cents/lb US.  So the only thing we do not know for sure is the TC.
HOWEVER, with a knowledge of the industry and production process it is fairly easy to calculate the TC.  They previously announced that the current TC would allow operation at breakeven which translates to a TC of $70 - $80.  The ONLY problem facing the fund is that the TC negotiated with Glencore is too low.  The independent board has , or whatever reasons, decided that it is better to operate at break even and pray for better tefms in the future than to force Glencore's hand by voting to shut down the operation, sell off the inventory and return the proceeds to the shareholders.

Only time will tell if they are correct.  I believe that a vote to shut down the operation would have immediately triggered a buyout offer from Glencore, however, threy did not choose that option and we are now stuck waiting for TCs to improve.  I find it incomprehensible that the TCs can be kept secret and believe that they would have to reveal if it were challenged, bbut nobody has deep enough pockets to fight Glencore.

When Q3 results are announced I calculate that we will see another modest earnings of ~$3 million which is insufficient to cover depreciation and reserves of ~$6 million.  Thus another quarter with no cash for distribution.

We should see Net revenues after raw material purchases of $45 million and Costs before Interest depreciation and taxes of $42 million for an EBITDA of ~$3 million  Probably better than gloom and doom but probably not enough to bump the SP.

BB