Noranda Income Fund Unit NNDIF

more re. valuation

[rjk1234]

a) Over the 5 years 2017 to 2021 Capital Expenditure was $USMillion(47+28.3 + 21.8 +19.6 +16.2) for a total of $US133 Million or ~$Cad 3.65 per unit.

b) from the Q3-2022 balance sheet at Sept.30, 2022 Inventory (mostly readily saleable concentrate waiting to be processed) stood at $US 220.7Million while the ABL revolving credit facility debt stood at $US 151.9 Million, so effective debt is better than zero.

c) further to (b), cash-equivalent Inventory minus ABLdebt ~= $US(220.7 – 151.9)Million = $US 68.8Million, equivalent to ~$Cad1.90 per unit. So if the current offer were to be accepted Glencore would effectively be getting the CEZ business for better than FREE!

d) per the Q3 2022 balance sheet Net Assets Attributable to Unitholders stood at $US 170.6 Million or ~$Cad 4.65 per unit (even after the $30 Million impairment!).

e) although we are now being told that the plant is decrepit, it was still able to produce 53,000tonnes of zinc metal in Q3-2022 so the ~$1Billion-replacement-cost plant is far from a dead loss. A valuation of $500 Million would correspond to $10 per unit.

So in agreement with Eric’s, ZincDink's etc. assessments anything less that $5 per unit would be a steal and $10 per unit would be quite justified!

[Scotch12]

Good post RJK, do you have an accounting background?   I don't take the TD analyst seriously as he has, in my experience, always been behind the curve.  However, the market clearly agrees with him (hence no premium to the initial offer).   His point that there does not appear to be alternative bidders is a relevant one as that seems to be the case.  In the two

[schocor]

I spoke with one of the independant directors on Tuesday. He confirmed to me that Glencore was the ONLY takeout option that this board explored. He said they "discused" bankruptcy as well as "discussed" raising $100M with paradigm.  I appreciated the call, but it was apparant to me that these independant directors were anything but. He was able to parrot Glencore's

[Paykel2]

I am a small investor who has held the stock through thick and thin over the last several years and by no means an expert. Here are a few thoughts that I hope someone more qualified could comment on: The Institutional investors that have some clout called the meeting to replace the board of independent directors that would happen after this deal goes through apparently. The

[ZincDink]

If deal goes through, no need to change the board as GC will have full control The offer is outrageously low, very few would be in the money at the current offering.You bet the funds want a much better price The TD analyst has stated (overstated) the risk from the cell financing but acknowledges TC are high and likely to remain high. He previously valued the plant at 2.5 if it closed - his

[wizthewiz]

I agree. At this point, are there more than these two possibilities to increase the offer: 1. a competitive serious offer; changing the Board with members who see the greater value in the company?

[wizthewiz]

ZD, I agree. At this point, are there more than these two possibilities to increase the offer: 1. a competitive serious offer; changing the Board with members who see the greater value in the company?

[Eric1212]

Regarding "  Someone is buying after the news and price jump; can anyone figure out who it is or the motivation?"   There is robot that are specialized in buying and selling stock when there is this kind of offers/news. I guarantee you that the minute the offer will be ended, the stock will drop due to theses robots selling their position.   For other parts

[schocor]

Those that are buying today are able to vote in the director change meeting on March 28th.  As both Glencore and Riverstyx are vuying for control of the board, there is plenty of motivation to buy these shares and tip the balance in that vote. 

[rjk1234]

No accounting background and not a lawyer--but so teed off with what Glencore has been doing over the years that I have gradually figured some things out a little.  It's so good to know that the big unitholders have become active and are pushing back.  New truly independent directors who have a strong vested interest in getting fair treatment for non-Glencore unitholders like

[JCW]

From a smaller shareholder...thanks to all the "obviously" knowledgeale posters who are close to this situation. Your posts show just how preposterous this situation is and how badly GC has been and would like to abuse  ....the MAJORITY of the unitholders!!  I would like to think that the leading objectors might find some way to ensure that the Quebec politicians are aware of