Noranda Income Fund Unit T.NIF.UN

I really don't understand the low valuations

[ZincDink]

I really don’t understand thinking about some of the low valuations. Really, kind of perplexed, hoping someone can show the error in my thinking.
They had 40 M$ EBITDA with very poor production last quarter. If they get typical production, they will be doing 50 M$ per quarter easy… for now and as far as we can see. That is in USD, so closer to 70 M$ Can.
Management had to hide this by taking another impairment – 30 M$. Do you realize they took 130 M$ in impairment charges since 2014 under the belief they may not find in concentrate to process.  I like round figures so at least 150 M$ in impairment charges – with over 130 M$ that should be restored.
They took a 33 M$ derivative loss… but we still have almost 75 M$ in unrealized (yet) derivative gains. That is a 75 M$ IOU and I expect that they will have at least 50 M$ to cash out in Q4. I find it perplexing that people are so worried about 100 M$ in capital that they think it would take borrowing or share dilution to fund this.
Yeah 100 M$ is a big number, but it cost 20 M$ alone to do some cell maintenance a few years ago. To be honest, I would really like a second set of eyes on this. I thought it might be GC trying to squeeze out extra production and get the other shareholders to finance it (or government).
The “shortage” in concentrate was artificial caused by excess investment in refiners in China (similar to USA oil fracing). Now the cost of electricity is a factor in Europe and China, so markets are behaving in a rational fashion. I don’t think the experiment with “low cost” carbon-based electricity will be repeated.
Additionally, North America (aka USA) and Europe are worried about China’s dominance in metals, mainly rare earths but also zinc. I no longer worry that this mill will be forced out as uncompetitive (though GC was trying the let’s bankrupt the plant like Trifigura did to Nyrstar).
To summarize
EBITDA of 50 M$ per quarter in 2023, 2024. 2025…
Should be a 130 M$+ reversal of impairment charges as the conditions that caused it no longer apply
The estimated 100 M$ cell repair is unusual and suspect, but internal financing should cover all cost for expected 2024 upgrade
The market conditions now favor refiners, primarily refiners with low electricity costs, and will do so in the future.
NIF used to have share value over $ 10. How much would you pay for 200 M$ in EBITDA?