SALABERRY-DE-VALLEYFIELD, Québec, Jan. 19, 2018 (GLOBE NEWSWIRE) — Noranda Income Fund (TSX:NIF.UN) (the “Fund”) provides an update to the market on the work towards returning to normal operating capacity following the ratification of the new collective agreement on December 1, 2017.
All active unionized employees returned to work at the processing facility in December 2017. As of the end of December, all equipment that had been idled since February 2017 has been restarted. By the end of January 2018, the Fund’s Manager expects to have completed the ramp up of the processing facility’s operation to normal operating capacity.
Once the processing facility has achieved its normal operating rate, and assuming full supply of zinc concentrate, the Fund should be able to produce between 250,000 and 260,000 tonnes of zinc from the treatment of concentrate feeds as well as processing the 20,000 tonnes of Glencore Canada-owned cathode in 2018. As disclosed in November 2017, the Fund sold 20,000 tonnes of zinc cathode to Glencore Canada. It is expected that this material will be tolled by the processing facility. In exchange, the Fund will receive a tolling fee.
The Fund, through its Independent Committee and their advisors, is currently negotiating with Glencore Canada and anticipates reaching a satisfactory agreement regarding the supply of zinc concentrate following the end of the current concentrate agreement on April 30, 2018.
This update is subject to various risks, uncertainties and assumptions, some of which can be found in “Forward-Looking Information” below.
This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. Forward-looking statements can generally be identified by the use of words such as “anticipates”, “believes”, “plans”, “intends”, “estimates”, “expects”, “is forecast”, “approximately” or variations of such words and phrases, or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or words and expressions of similar nature. Amongst others, the Fund has made forward-looking statements for 2018 expected zinc production and the negotiation of a zinc concentrate agreement with Glencore Canada. The Fund provides this information because they are the key drivers of the business. Readers are cautioned that this information may not be appropriate for other reasons.
These statements and information are based, among others, on the Fund’s current assumptions, expectations, estimates, objectives, plans and intentions regarding zinc production and the negotiation of a zinc concentrate agreement with Glencore Canada.
Forward-looking information involves known and unknown risks, uncertainties and other factors, which may cause the actual events, results or performance to be materially different from any future events, results or performance expressed or implied by the forward-looking information. As a result, the Fund cannot guarantee that any forward-looking statements will materialize. Assumptions, expectations and estimates made in the preparation of forward-looking statements and risks that could cause the Fund’s actual events, results or performance to differ materially from the Fund’s current expectations are discussed throughout this document and in our other continuous disclosure materials available on SEDAR at www.sedar.com. Examples of such risks, uncertainties and other factors include, but are not limited to: (1) the Fund’s ability to operate at normal production levels; (2) the dependence upon the continuing supply of zinc concentrates and the terms of the Supply and Processing Agreement; (3) the demand for zinc metal, sulphuric acid and copper in cake; (4) the ability to manage sulphuric acid inventories; (5) changes in future zinc concentrate, zinc grade and impurity levels and their potential impact on capital expenditure and working capital requirements, operating costs, production and recoveries; (6) changes to the supply and demand for specific zinc metal products and the impact on the Fund’s realized premiums; (7) reliance on Glencore Canada and certain of its affiliates for the management, operation and maintenance of the Processing Facility, the Fund and the Operating Trust and credit support in connection with the ABL Facility and Notes; (8) the ability of the Fund to continue to service customers in the same geographic region; (9) general business and economic conditions and the condition of financial and credit markets; (10) legislation governing the operation of the Fund including, without limitation, air emissions, discharges into water, waste including residue ponds, hazardous materials, workers’ health and safety, and many other aspects of the Fund’s operations, as well as the impact of current legislation and regulations on expenses, capital expenditures, taxation and restrictions on the operation of the Processing Facility; (11) loan default and refinancing risk associated with the ABL Facility; (12) the impact of costs and liabilities related to the closure, decommissioning, reclamation and rehabilitation of the Processing Facility and surrounding lands, including employee severance, pensions, and environmental and reclamation and rehabilitation liabilities if an acceptable replacement arrangement is not put in place for the Supply and Processing Agreement; (13) the sensitivity of the Fund’s Net Revenues to reductions in realized zinc metal prices including premiums, copper prices, sulphuric acid prices; and the strengthening of the Canadian dollar vis-à-vis the US dollar; (14) the impact of month prior pricing; (15) the sensitivity of the Fund’s production costs to increases in electricity rates, other energy costs, labour costs and operating supplies used in its operations, and the sensitivity of the Fund’s interest expense to increases in interest rates; (16) potential negative financial impact from a labour disruption, regulatory investigations, claims, lawsuits and other proceedings; and (17) the other general risks and uncertainties set out in the Fund’s continuous disclosure documents on file with the Canadian Securities Regulatory Authorities.
Forward-looking information contained in this press release is based on management’s current estimates, expectations and assumptions, which management believes are reasonable as of the current date. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. Except as required by law, the Fund does not undertake to update these forward-looking statements, whether written or oral, that may be made from time to time by the Fund or on the Fund’s behalf.
Noranda Income Fund is an income trust whose units trade on the Toronto Stock Exchange under the symbol “NIF.UN”. Noranda Income Fund owns the electrolytic zinc processing facility and ancillary assets (the “Processing Facility”) located in Salaberry-de-Valleyfield, Québec. The Processing Facility is the second-largest zinc processing facility in North America and the largest zinc processing facility in eastern North America, where the majority of zinc customers are located. It produces refined zinc metal and various by-products from sourced zinc concentrates. The Processing Facility is operated and managed by Canadian Electrolytic Zinc Limited, a wholly-owned subsidiary of Glencore Canada Corporation.
Further information about Noranda Income Fund can be found at www.norandaincomefund.com.
For further information, please contact:
Vice President and Chief Financial Officer, Canadian Electrolytic Zinc Limited
Noranda Income Fund’s Manager