Noranda Income Fund Unit NNDIF

New Stream Agreement

[Finalsay]

Thoughts?
 

https://www.globenewswire.com/news-release/2020/07/28/2068291/0/en/Noranda-Income-Fund-and-BaseCore-Metals-Announce-Stream-Agreement.html

[ZincDink1]

Interesting. Unusual to mention before the quarter release, so maybe this quarter is worse then I thought. Strange that GC hasn't taken us over and appears to want to continue to diversify risk. The potential sounds great, but the devil is in the details. Overall, sounds like the concern over obtaining zinc concentrate is no longer. The asset has been foolishly priced for so long, its tough

[Finalsay]

 "The cost of the Expansion Projects is estimated at US$32 million and commissioning is targeted for the first quarter of 2022. Once commissioned, the Expansion Projects will allow the Processing Facility to maintain its current production levels as well as to increase zinc production by approximately 20,000 tonnes per year" - Zinc production (tonnes)  Q1 2020: 67,425 Q4

[Bigbird9999]

Just another form of debt to finance CAPEX which they claim has an IRR of 30%.  It is designed to be neutral cash flow, so should not drain the cash available for distribution, if indeed, there is any available. In simple terms, Base is loaning NIF $40 million to expand/improve the plant to produce an additional 20000 tpa.  To pay back this "loan" NIF has sold 3000 t/year over

[Finalsay]

Always good to hear from you BB. It would be nice if they gave us some further guidance on their NPV calculation, but I suppos that information cannot be shared due to the confidentiaty agreements with Glencore

[stopedout]

Call me a pessamist but it sounds like Glencore gets NIF to upgrade its smelter and Glencore will now acquire dirtier zinc con (which those miners will pay a penalty). NIF then smelts the con at the same mystery contract price it gets from all the Glencore con while Glencore pockets the penalty.

[Bigbird9999]

Can't say I disagree.   BB

[ZincDink1]

GC has been using dividend money to upgrade previously, so why not continue? So the question is will profits get to high to hide and force a decent dividend before GC lowballs an offer on the plant?

[Finalsay]

For 2020 Q2 financial statements I'm not sure if I would expect PPE to be increased by $40 million, but I am curious to see how this will look. Noranda is going to receive installments of cash between now and June 30, 2022 and PPE will reflect the full 32 million in anticipated costs at time of completion. The deal itself doesnt close until July 31, so I'm not sure if that means we will

[Bigbird9999]

No effect on Q2 results.  PPE and debt will go up in future as funds are advanced and project is constructed.  How it is all accounted for in the financials is unknown, but my guess is it wont be good for anybody but Glencore. E

[ZincDink1]

So, to harp again on the thorn in my side, it sounds like NIF will have enough concentrate for at least the next decade. Does that mean that the former impariment charges (was it 70 M$ ?) could be returned to the balance sheet, or does GC like to convince everyone the operations is only worth 150 M$ at most? Wonder if TD will comment on this or wait till after earnings?

[ZincDink1]

If Teachers Pension wants us through BaseCore, why not buy the stock directly as its so freaking cheap!

[THRK]

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