Noranda Income Fund Unit NNDIF

Noranda Outlook

[Bwrbhk]

At June 30, 2022 the book value of the company was US $185.5 million or US$3.71/share.  At todays exchange rate that is equivalent to CDN $4.71/share.  Why are the shares trading at a 75% discount to book value?  In four of the last 5 years (2017 to 2021) the company lost money and the cumulative net loss was $65 million. In the first half of 2022, the company posted a profit of $59.1 million, which almost wiped out the cumulative losses over the past 5 years.  Looking ahead over the next several quarters, Noranda will likely post significantly higher earnings because of higher TC's, high zinc premiums and hopefully a resolution of their operating issues.  As the company posts positive quarterly earnings, the discount to book value will likely decline.  Also, should Glencore decide to make a takeover offer, it would be difficult to justify an offer a less than book value.