Noranda Income Fund Unit T.NIF.UN

Call this AM with - Anthony Lloyd - Independant Director

[schocor]

I had a 15 minuite call this AM with Anthony Lloyd from the Noranda board.He was very helpful, open about the process/timelines and I really appreciated the outreach.

I will however be voting my several hundred thousand shares AGAINST this buyout and I will be voting FOR the 4 new directors in March. I believe glencore will raise their bid; but I dont care $1.42 is not worth selling at and even if they raise it to $2 I still dont trust them enough to sell. 

Mr. Lloyd noted the signifigant challanges that the plant has faced over the last 10 years. He noted that once the fund moved to  negotiated treatment charges from guranteed treatment chages the challanges started. He noted that electrolisis cells usually last 15 years and there was some early deterioration on the current cells which they need money to fix; money Noranda doest have. He notes that outreach to paradign made it sound like finding $100m in funding woudl be difficult for the fund; he said a rights offer was considered to dilutitive for existing shareholders and that the compnay did not qualify for CCRA protention (not bankrupt). On this point, he said some other things that piqued my interest that I wll choose not repeat;  but that are influencing my decisoin to elect 4 new directors to review the contracts in place with Glencore. 

While I do respect the challanges the board is facing; spot treatment charges are at $275 USD per tonne (not $85 of last year). Looking at the last 5-10 years is thus not indicitive of what the future looks like IMHO. 

I hope that new directors in May of 2023 means new contracts in May of 2024. By my math, they are trying to buy a $1B asset for $290m (130 debt+100 refurbishment+$60M equity purchase) just as the price for hydro electric zinc smelters starts to improve. 

Final point; when I questioned Mr. Lloyd about the timing of the meetings (buyout Feb 28th - directors March 28th) he said that it "was a co-incidence and that the board had been working on the deal with Glencore for quite some time". He clarified that is shareholders vote down the deal a $2.1M break-fee is payable to Glencore and if accomodations can not be made, the director election meeting wil ltake place on March 28th.