Noranda Income Fund Unit NNDIF

The Boliden Odda "Green Zinc Project" conundrum

[galvanized]

Boliden is busy working on a project to add about 150k tonnes of capacity to their zinc smelter at a cost of about 700 euros = 1B cad. You can see a short summary of the project here:

https://afry.com/en/newsroom/press-releases/afry-main-engineering-partner-boliden-in-zinc-production-expansion-in

So the conundrum is, Why would Boliden spend 1B cad,, to add 150K of capacity when they could have just purchased the NIF smelter which has a capacity of about 275K, and a market cap of  just 70M?  

To my mind, these two facilities are quite similar.  They both have access to cheap hydro power and on site access on the atlantic for seaborne material.

If we were to use the project cost of the Boliden expansion to calculate a replacement cost for the NIF smelter
1B / 150K tonnes = 6666 per tonne
so at that rate NIF should be worth 6666 X 257000 = 1,833150,00 cad / 50M shares =36.66 per NIF share.

That is what I would cal one heck of a spread between the Bid and the Ask!