Noranda Income Fund Unit T.NIF.UN

RE:RE:RE:RE:RE:RE:RE:US Price Premium now 25 to 30 c per pound

[ljp0101]

Extract has sat on the register for a long time and hasn't achieved anything beyond that presentation, which refuted key portions of the bullish writeups I've seen including liquidation value (environmental closure costs are huge and not provisioned for) as well as arguments that the SPA can be broken. Of course Extract is going to tell you it's a 10x, they're not sellers, and encourage you to pester management but they haven't even got a board seat, which tells you they're uninterested or feckless given how much time has elapsed.

You'll note that the independent board members are connected Quebecois. Their interests only partially overlap with mine. In practice, I would expect them to be concerned about keeping CEZ open and viable for the sake of the community a lot more than I am and see any hard challenge of Glencore as incredibly risky. They'll take scraps from Glencore such as the presentation and SPA cancellation notice period extension and pat themselves on the back for doing their jobs instead of make themselves boardroom pariahs. It's not right that directors don't act for shareholders but it's common enough and this situation is almost entirely within the realm of politics, not really about legality, where the current arrangement mostly works for stakeholders except minority shareholders.

I agree there's probably a legal argument against the SPA, although I'm not in a position to know if a challenge would be successful. The strongest path against it is through competition regulators IMO but nobody with political juice is pushing for it and it's politically risky when Glencore starts saying CEZ might close without the SPA. The directors are the only parties that can see the SPA and disclosure has been purposefully vague so you'd have a harder time establishing standing to sue if you can't cite the problematic clauses within it. And even if you somehow gained control, Glencore controls the offtake from a number of mines, especially in Canada, and could choose not to sell to CEZ as part of the dispute and then you have a very challenging operating environment.