Noranda Income Fund Unit NNDIF

Reserves

[rjb1954]

BB, I always welcome your posts.

In your last post, you thought that GC would have a hard time hiding all the cash in 2020. I'm not sure I agree.

A couple of years ago, NIF moved a lot of money into reserve in case of plant closure to cover remediation costs. Obviously, the plant never closed.

So , what happened to all the money that was put into reserves? I can't locate it on the Balance Sheet. Does this cash exist somewhere out of sight in someone's pocket?

[Bigbird9999]

Don't think they moved cash but they did take a $60 million cad writedown on the PPE.  There were so many moving parts that it requires a deep dive to see what happened.  T They started reporting in USD in 2018 and restated 2017 from CAD to US so you can't compare the numbers prior to 2017 without converting to USD Under the old agreement NIF carried the finished goods

[wizthewiz]

BB, thank you for the succinct resum.

[iwasgold]

To rjb954 Re the cash reservces put aside for smelter closing.... It was reported by the company as being paid into the large ABL that they opened in 2015 I believe.  The ABL was supposedly created to fund a massive build up in inventory that year, but I have not done any looking to see what happened to the money when the inventory was sold.  I suspect Glencore took the loan to make

[rjb1954]

Thanks for the explanation ... although I am still a bit confused about how the cash asset was made to dissapear without a trace. If the magician can conjure the trick once, he can certailny do it again. I guess we just have to watch the slight of hand a bit more carefully.

[Northforce13]

If you can reiterate what cash asset you are talking about in what time period I can take a look and answer for you. I suspect in advance that the reason it seems to have disappeared is that you don't have full understanding of financial statements... they can't just make money disappear without a trace. Will look if you want   I also don't expect much from them in Q4, probably

[iwasgold]

the 2015 report clearly states that the cash reserves were spent into the ABL...so that is the trace.

[Northforce13]

Ok, so they applied their cash on hand to their debt, thereby reducing their debt and saving interest rate charges?  I don't see the problem with that

[Northforce13]

Further if you took a look at the evolution of their balance sheet over the past 20 years, as of 2009 when they decided to pay down debt, the balance sheet strengthened by an incredible 200 mil CDN from 2010 to today.  You can see this if you assign a value of zero to the PPE for all years, thereby allowing you to see how the balance sheet evolved excluding PPE.

[iwasgold]

oh man you are either ignorant or a company man. If you had a clue you would know that the cash reserves were taken from the pockets of shareholders. They would have been paid out as distributions if they were not reserved. That they were later rolled into the ABO is theft...from you the shareholder.

[iwasgold]

oops this blast was meant for Northforce...and I meant ABL not ABO..

[rjb1954]

Thanks for your comment. In looking back at the Annual Report for FY2015, there was a 55M charge for Asset Impairment, and this non-cash charge seems to have been directed towards reducing Plant & Equipment Assets. At the time, if memory is correct (?), I remember the jist of the reason for this Unusual Expense was to build up a reserve for site remediation in the event of a permanent plant

[ZincDink1]

They recognized a site rehab fund for a while now. That 55 M$ impairment charge was a number drawn out of the rear of out Glencore CFO. Sure, there was some uncertainty over raw supply. Now, there is excess available and we still have had no reversal on the impairment charge. Off the top of my head, they typically valued the plant ~ 250 M$. We added 20 M$ in improvements to handle dirtier

[rjb1954]

At the time of the Impairment Charge, it did allow NIF to declare a loss for FY 2015 and thereby recoup some $6.8M income taxes paid the previous year. Was this the end game for this charge?

[iwasgold]

watch the sleight of hand more carefully? what sleight of hand? They do this stuff in plain sight and still get away with it. Did you note in the report today how high the TCs are....and there's still no profit. It is a joke.

[Northforce13]

Dude, read the post before yours they made 22c U.S./share in Q4