Noranda Income Fund Unit T.NIF.UN

RE:RE:RE:NIF financials

[Bigbird9999]

There is a "secret" formula in the agreement that is applied when they can't agree on a negotiated TC.  It sets the TC somewhere between spot, benchmark and market terms which are reported each month by CRU and Wood Mac.  Not sure, but my understanding is that they determine the TC monthly when they use the formula.  This is pretty much the way all custom smelters work.  They do not put their eggs all in one basket, rather, they purchase their concentrate requirements on a blend of spot, benchmark and market terms.

For NIF, we know for sure that it cannot be straight spot because there would about a $20 million shortfall in revenue resulting in negative earnings.  Similarly we know it cannot be  benchmark because the revenue would be > $40 million higher resulting in big earnings and a dividend.  The average between monthly spot and benchmark for 2021 is about $120 so that's what I used.  Not exact but it is pretty close.

For 2022 TC could easily be $160 - $200 either negotiated or by formula.  Either way it means plenty of FCF.

However, like I said I expect obsfucation, confusion and misdirection when they report next week and It will probably take at least another quarter of good earnings before they restart the dividends.  
BB