Noranda Income Fund Unit NNDIF

Oversold and hedges

[Bwrbhk]

The shares are grossly oversold and will likely remain so until there is further clarification on 3rd Q financial results and on their plans to fix the cell house in both the short term and longer term.  They probably have close to $100 million in unrealized hedge gains which could be closed out and the cash realized.  There would be some risk to doing this if the price of zinc took off, but with the world economies in or about to be in recession this risk would appear to be minimal.  Also, I would imagine that they have been depleting inventory and not purchasing more concentrate.  This should help reduce bank debt while they are fixing the cell house.  It will be interesting to see if they have been doing any of these things when the 3rd Q is reported.