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Noranda Income Fund (NIF-UN.TO)

Toronto - Toronto Delayed Price. Currency in CAD
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1.1300+0.0100 (+0.89%)
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Neutralpattern detected
Previous Close1.1200
Open1.1400
Bid1.1300 x 0
Ask1.1400 x 0
Day's Range1.1200 - 1.1500
52 Week Range1.0300 - 2.8700
Volume7,980
Avg. Volume67,354
Market Cap56.489M
Beta (5Y Monthly)1.75
PE Ratio (TTM)4.93
EPS (TTM)0.2290
Earnings DateN/A
Forward Dividend & YieldN/A (N/A)
Ex-Dividend DateDec 30, 2019
1y Target Est3.25
  • GlobeNewswire

    Noranda Income Fund and BaseCore Metals Announce Closing of Stream Agreement

    TORONTO, July 30, 2020 (GLOBE NEWSWIRE) -- Noranda Income Fund (TSX:NIF.UN) (the “Fund”) and BaseCore Metals LP (“BaseCore”) announce the closing of its stream agreement in respect to reference zinc processed and refined at the Fund’s electrolytic zinc processing facility (the “Stream”) located in Salaberry-de-Valleyfield, Quebec (the “Processing Facility”). For more information regarding the Stream agreement, please consult the press release issued July 27, 2020.BaseCore Metals LP, an independent 50/50 joint venture between Glencore Canada Corporation and Ontario Teachers’ Pension Plan Board, is a leading base metals focused streaming and royalty company. BaseCore Metals provides strategic, long-term and friendly financing to mining operators giving them superior access to capital for funding of exploration and development, mine expansions, mergers and acquisitions, balance sheet flexibility and reclamation obligations. Further information about BaseCore Metals can be found at: www.basecoremetals.com. 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:BaseCore: Akshay Dubey Director, Business Development of BaseCore Tel: 416-775-1699 info@basecoremetals.comNoranda Income Fund: Paul Einarson Chief Financial Officer of Canadian Electrolytic Zinc Limited, Noranda Income Fund’s Manager Tel: 514-745-9380 info@norandaincomefund.com

  • GlobeNewswire

    Noranda Income Fund Reports Second Quarter 2020 Financial Results

    TORONTO, July 29, 2020 (GLOBE NEWSWIRE) -- Noranda Income Fund (TSX:NIF.UN) (the “Fund”) today reported its financial results for the second quarter ended June 30, 2020. Except where otherwise indicated, all amounts in this press release are expressed in US dollars.   Second Quarter 2020 Summary * At the outset of the COVID-19 pandemic, the Processing Facility was recognized as an essential service due to its priority manufacturing activities and it continued operations. Numerous precautions to curb the spread of COVID‑19 and to protect the health of its workforce and contractors have been implemented onsite, in accordance with the directives of public health officials. * Loss before income taxes was $20.5 million in the second quarter of 2020 compared to a loss before income taxes of $0.9 million in the second quarter of 2019. * Adjusted EBITDA1 was $9.7 million in the second quarter of 2020 compared to Adjusted EBITDA of $(7.5) million in the second quarter of 2019. * Zinc metal production increased 8% to 66,993 tonnes compared to 62,226 tonnes in the second quarter of Q2 2019. * Zinc metal sales increased 8% to 66,992 tonnes, compared to 62,233 tonnes in the second quarter of 2019. * Sulphuric acid sales increased to 104,282 tonnes in the second quarter of 2020, compared to 93,661 tonnes in the second quarter of 2019. * Subsequent to the end of the quarter, the Fund announced that it has entered into a zinc metal stream agreement with BaseCore Metals LP (“BaseCore”), the proceeds of which will fund strategic long-term investments in the Processing Facility to improve its efficiency and production capacity.“Our operations remained stable throughout the second quarter of 2020, with our team adeptly handling the challenges related to COVID-19 and the higher than usual temperatures. As a result, we remain on plan to achieve our production and sales volume objectives for the year 2020,” said Liana Centomo, Chief Executive Officer of Canadian Electrolytic Zinc Limited, the Fund’s manager.Ms. Centomo added, “Our second quarter financial results were negatively impacted by lower zinc and sulphuric acid prices due to the global economic disruption and continued uncertainty caused by the pandemic. Looking ahead, we anticipate the recovery in zinc prices and treatment charges to remain limited throughout the remainder of the year. We continue to focus on the elements we can control by operating efficiently and ensuring the health of our employees and contractors, so that we are well positioned for the recovery.”“Subsequent to quarter end, we were pleased to announce that the Fund has secured a long-term stream financing agreement with BaseCore that will allow us to improve our capital structure while making strategic investments in our processing facility. These investments will enhance our operational efficiency and production capacity, and ultimately, improve our long-term profitability as a leading, low-cost producer of refined zinc metal in North America. We look forward to proceeding with these strategic projects while maintaining our current production levels and respecting the COVID-19 preventive measures in place,” concluded Ms. Centomo.Second Quarter 2020 Financial and Operating Results The Fund reported a loss before income taxes of $20.5 million for the three months ended June 30, 2020 compared to a loss before income taxes of $0.9 million in the same period last year.Net Revenues for the three months ended June 30, 2020 were $28.6 million compared to $48.6 million in 2019. For the three months ended June 30, 2020, provisional pricing features negatively impacted Net Revenues by $1.6 million compared to a positive impact of $2.0 million of Net Revenues for the same period of 2019. The decrease or increase in inventory margin, net of the impact of provisional pricing, is subtracted or added back, respectively, to calculate Adjusted Net Revenues. The $18.2 million increase in inventory margin in the quarter resulted from a rising zinc price late in the quarter and compares to a $12.1 million decrease in inventory margin for the same period in 2019. The margin will reverse if zinc prices decrease or will be realized as the inventory is consumed.Adjusted Net Revenues2 were 48.4 million in 2020 compared to $34.5 million in 2019. Higher Adjusted Net Revenues in the second quarter of 2020 reflects higher market terms on concentrates and higher volumes compared to the second quarter of 2019. Higher impurity levels and unplanned maintenance negatively impacted volumes processed in 2019. The second quarter of 2020 was negatively impacted by lower LME zinc prices and by lower sulphuric acid prices when compared to the same period of 2019.Adjusted EBITDA for the three months ended June 30, 2020 was $9.7 million compared to $(7.5) million in 2019. The higher Adjusted EBITDA in 2020 reflects higher market terms on concentrate treatment charges and higher volumes compared to 2019. Higher impurity levels and unplanned maintenance negatively impacted volumes processed in 2019. Adjusted EBITDA in 2020 was also negatively impacted by lower LME zinc price and by lower sulphuric acid prices of $43 per tonne compared to $66 per tonne in the same period of 2019. Sulphuric acid shipments were greater than production and lowered our inventory levels.Production costs before change in inventory in the three months ended June 30, 2020 were $33.7 million, $4.7 million lower than $38.4 million recorded for the same period in 2019. The lower production costs in 2020 were a result of lower energy costs due to higher electricity rebates and lower operating supplies due to unplanned maintenance in the second quarter of 2019 and to the reduction in the use of reagents compared to 2019.Unit production costs3 were $503 per tonne in the three months ended June 30, 2020 compared to $617 per tonne in the comparable period in 2019.Cash used in operating activities for the three months ended June 30, 2020 was $17.4 million, including a negative $29.9 million increase in non-cash working capital due to a decrease in accounts payable and an increase in inventories partly offset by a decrease in accounts receivables. In the same period for 2019, cash provided by operating activities was $7.2 million, which was positively impacted by a $20.0 million decrease in non-cash working capital due to a decrease in accounts receivables and inventories, partially offset by a decrease accounts payable.As at June 30, 2020, the Fund’s debt increased to $156.7 million, up from $136.0 million at the end of December 2019. The Fund’s cash as at June 30, 2020 increased to $1.6 million from $1.1 million as at December 31, 2019. The Fund’s debt increased as a result of cash used by operating activities during the period.Stream Agreement with BaseCore and Investments in Processing Facility Subsequent to the end of the quarter, the Fund announced that it has entered into a definitive stream agreement with BaseCore. BaseCore will pay cash consideration of $40 million for the Stream and the Fund will deliver to BaseCore LME zinc warrants corresponding to 1.00% of zinc processed and refined at the Processing Facility until the later of (i) June 30, 2030 or (ii) 68 million pounds of LME zinc warrants have been delivered. Proceeds will be used to improve the Processing Facility’s filtration and cooling processes in order to support increased zinc production capacity (the “Expansion Projects”) and for general corporate purposes.In alignment with the Fund’s long-term strategy to decrease its production unit costs and increase profitability, the Fund is moving forward with the installation of additional belt filters and related equipment to increase its filtration capacity, and two additional cooling towers in the cell house to improve cooling capacity in the summer months. The Expansion Projects are estimated to cost $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. Assuming zinc prices of $2,300 per tonne, treatment charges of $200 per tonne of concentrate, and production costs and by-product revenues adjusted for inflation and higher production volumes, these investments are expected to provide an internal rate of return of approximately 30%. The Expansion Projects are included in the recently approved application under Quebec’s L‑20 electricity rate reduction program and will generate approximately 16 months of electricity rate reductions.The transaction is subject to customary closing conditions and is expected to close by July 31, 2020. For more information regarding the Stream terms and Expansion Projects, please consult the press release issued July 27, 2020.Potential impact of COVID-19 The World Health Organization (WHO) declared the novel coronavirus (COVID-19) to be a pandemic on March 11, 2020. Major health issues and pandemics, such as COVID-19, may adversely affect national or global economies, global trade and commercial activity, and could result in a general or sharp decline in economic activity.As a result of COVID-19, many companies and local and national governments have imposed restrictions, such as closures, quarantines, cancellations and travel restrictions. Although additional costs have been incurred as a result, impacts on our supply chain have not resulted in production reduction and the sale and delivery of zinc have not been significantly impacted. Recently, restrictions have begun to be lifted by government officials and certain jurisdictions have seen increases in the number of cases which may result in the reinstatement of previous restrictions. The Fund may incur losses or expenses relating to such events outside of its control despite maintaining measures within the Processing Facility. Given the evolving and dynamic nature of COVID-19, it is difficult to predict how significant or adverse the impact of the pandemic may be on the Fund’s business, its operations, and the market for its securities. The Fund has contingency plans in place to react to various potential scenarios, including but not limited to securing adequate resources in terms of manpower, supplies, logistics and concentrate.Outlook for the Fund As per Wood Mackenzie, the indicative spot treatment charges on Chinese imported concentrates fell from $305 per tonne in December 2019 to $265 per tonne in March 2020 and continued to fall to $163 per tonne in May but have rebounded slightly to $170 per tonne in June 2020. The general global economic disruption and uncertainty caused by the COVID-19 pandemic has resulted in a decrease in zinc prices throughout the year. Wood Mackenzie has reported decreases in mine supply of concentrate and a reduction of refined zinc metal consumption, but refined zinc metal production is expected to achieve growth of 5% year-on-year in 2020. These market conditions are expected to result in limited recoveries in zinc prices and treatment charges in 2020. Recoveries in 2021 and thereafter will be dependent on economic recovery and the continuing impact of the pandemic, including any potential second wave.Given the evolving and dynamic nature of COVID-19, it is difficult to predict how significant or adverse the impact of the pandemic may be on the Fund’s business, its operations and the market for its securities.2020 Production and Sales Estimates The Fund’s estimates for its 2020 zinc metal production and sales continues to be between 260,000 to 270,000 tonnes. The Fund’s ability to meet these targets is subject to various risks, uncertainties and assumptions, some of which can be found in “Forward-Looking Information”.Quality and Availability of Zinc Concentrates The global quality of zinc concentrates has been declining in terms of zinc grade and the level of impurities contained within. The impact on a smelter is an increase in the level of residues to be treated per tonne of zinc produced. The Fund is continually focused on optimizing its existing facilities.  Despite improvements, the residue handling section is at capacity. Two belt filters will be added to the section as part of the Expansion Projects that are being financed through the BaseCore stream agreement and are projected to improve production capacity and overall profitability.Concentrate inventory levels continue to be variable, due to large and irregular offshore deliveries of concentrate and the requirement to mix feed qualities to maximize the Processing Facility’s production. Variations in feed quality and feed mix could impact production and inventory levels.Local mines delivered more than their forecasted amounts in the quarter which benefited the smelter in terms of zinc production. The Fund took title to a large parcel of zinc oxide in the quarter which had the impact of increasing the inventory levels but will allow the fund to secure the availability of high zinc content feed. The quantity and quality of concentrate mix currently held by the Fund will reduce the risk of feed shortages or sub-optimal feed mix thus assisting the operations to optimize zinc production and profitability.Second Quarter 2020 Earnings Conference Call When: Thursday, July 30, 2020, at 8:30 a.m. ET Dial-in: 1 (877) 648-7976 (toll-free North America) or 617-826-1698 To access webcast: http://www.norandaincomefund.com/investor/conference.phpThe recording will be available until midnight on August 6, 2020, conference ID 8794282 at 1-855-859-2056 (toll-free North America) or 404-537-3406.Readers should be advised that the summarized communication presented in this press release is limited in its disclosure. It is not a suitable source of information for readers who are unfamiliar with the Fund, and it is not in any way a substitute for reading the Consolidated Financial Statements and MD&A because a reader relying on this summary alone might overlook decision critical information.Forward-Looking InformationCertain information in this press release, including statements regarding the Fund’s production and sales, future business plans and operation of the Processing Facility, future liabilities and obligations of the Fund (including capital expenditures), the ability of the Fund to operate profitably, the dependence upon the continuing supply of zinc concentrates and competition relating thereto, the ability of the Processing Facility to treat a more varied feed quality stream, anticipated trends in zinc concentrate supply and demand, smelting capacity, sulphuric acid market demand and supply, zinc concentrate treatment charges, the anticipated financial and operating results of the Fund, distributions to Unitholders, the scope, timing and completion of the Expansion Projects, the impact of the Expansion Projects on the operations of the Processing Facility, the operating and financial results of the Fund, and expected closing date of the Stream are forward-looking information. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "is positioned", "estimates", "intends", "assumes", "anticipates" or "does not anticipate" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved". Statements containing forward looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events.Forward-looking information is necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable as of the date of this press release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in greater detail in the "Risk Factors" section of the Fund’s Annual Information Form dated March 30, 2020 for the year ended December 31, 2019 and the Fund’s other periodic filings available at www.sedar.com. These factors are not intended to represent a complete list of the factors that could affect the Fund; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. The forward-looking statements contained in this press release are made as of the date of this press release, and the Fund expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.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.Key Performance Drivers The following table provides a summary of the performance of the Fund’s key drivers: Three months endedSix months ended  June 30,June 30,  2020201920202019 Zinc concentrate and secondary feed processed (tonnes)  123,273  122,928  258,142  255,520 Zinc grade (%)  53.0  52.3  53.0  52.3 Zinc recovery (%)  97.0  96.5  96.9  96.4 Zinc metal production (tonnes)  66,993  62,226  134,418  126,880 Zinc metal sales (tonnes)  66,992  62,233  135,051  126,879 Realized zinc price (US$/pound)  0.96  1.32  1.00  1.31 Average LME zinc price (US$/pound)  0.89  1.25  0.93  1.24 By-product revenues ($ millions)  4.1  8.4  10.8  16.0 Copper in cake production (tonnes)  565  614  1,309  1,382 Copper in cake sales (tonnes)  494  676  914  1,219 Sulphuric acid production (tonnes)  93,575  95,152  197,953  192,473 Sulphuric acid sales (tonnes)  104,282  93,661  202,162  184,590 Average LME copper price (US$/pound)  2.42  2.77  2.49  2.80 Sulphuric acid netback (US$/tonne)  26  70  43  66 Average CAD/US exchange rate  0.72  0.75  0.73  0.75 * 1 tonne = 2,204.62 pounds     SELECTED FINANCIAL AND OPERATING INFORMATION   Three months endedSix months ended  June 30, June 30, ($ thousands)2020 2019 2020 2019            Statements of Comprehensive Loss Information         Net revenues  161,439   179,696   337,217   366,591  Raw material purchase costs  102,857   160,598   243,035   298,067  Derivative financial instruments loss (gain)  29,935   (29,511)  9,028   740  Net revenues less raw material purchase costs and derivative financial instruments loss (gain)28,647 48,609 85,154 67,784  Other expenses:         Production  34,480   37,865   67,900   70,270  Selling and administration  4,844   4,140   9,193   7,896  Foreign currency (gain) loss  (48)  393   (842)  448  Depreciation of property, plant and equipment  3,733   3,784   7,399   7,581  Rehabilitation expense  3,679   1,100   5,812   1,687  (Loss) earnings before finance costs and income taxes  (18,041)  1,327   (4,308)  (20,098) Finance costs, net  2,433 2,225 4,649 3,883  Loss before income taxes  (20,474)  (898)  (8,957)  (23,981) Current and deferred income tax (recovery) charge  (5,941)  (873)  342   (4,829) Loss attributable to Unitholders and Non-controlling interest  (14,533)  (25)  (9,299)  (19,152) Distributions to Unitholders - net of tax recovery  -   -   -   -  Decrease in net assets attributable to Unitholders and Non-controlling interest  (14,533)  (25)  (9,299)  (19,152) Other comprehensive loss  (7,635)  (2,814)  (4,606)  (3,913) Comprehensive loss  (22,168)  (2,839)  (13,905)  (23,065)           Statements of Financial Position Information    June 30, 2020 Dec. 31, 2019  Cash      1,579   1,082  Inventories      199,629   157,975  Accounts receivable      104,109   144,157  Income taxes receivable      5,740   4,187  Property, plant and equipment      114,643   113,776  Total assets      437,322   437,779  Accounts payable and accrued liabilities      75,674   96,286  Deferred revenues      1,963   879  Asset-based revolving credit facility      156,744   136,019  Total liabilities excluding net assets attributable to Unitholders      282,688   269,240               Three months ended   Six months ended     June 30,  June 30, Statements of Cash Flows Information2020 2019 2020 2019  Cash provided by operating activities before cash         distributions and net change in non-cash working capital items  12,591   (12,851)  32,045   (9,626) Cash distributions  -   -   (1,155)  (1,099) Net change in non-cash working capital items(29,947)20,040 (39,615)25,381  Cash (used in) provided by operating activities(17,356)7,189 (8,725)14,656  Cash used in investing activities  (4,211)  (3,823)  (11,503)  (8,597) Cash  provided by (used in) financing activities  22,231   (1,594)  20,725   (4,878) Net increase in cash  664   1,772   497   1,181  1Adjusted EBITDA is used by the Fund as an indication of cash generated from operations.  Adjusted EBITDA is not a recognized measure under International Financial Reporting Standards and therefore the Fund’s method of calculating Adjusted EBITDA is unlikely to be comparable to methods used by other entities.  The Fund’s Adjusted EBITDA is calculated by starting from earnings before finance costs and income taxes and adjusting for non-cash items such as depreciation, gain or loss on the sale of assets and changes in fair value of embedded derivatives. In addition, an adjustment is made to reflect the net change in the rehabilitation liabilities (reclamation (recovery) expense less site restoration expenditures), the increase (decrease) in inventory margin and the net change in employee benefits (non-cash employee benefit expenses less employer contributions). Three months ended Adjusted EBITDAJune 30, ($ millions)2020 2019  (Loss) earnings before finance costs and income taxes  (18.0)  1.3  Depreciation of property, plant and equipment  3.7   3.8  Net change in residue ponds rehabilitation liabilities  3.7   1.1  Change in fair value of embedded derivatives  1.6   (2.0) (Decrease) increase in inventory margin net of change in fair value of embedded derivatives  18.2   (12.1) Loss on sale of assets  0.1   -  Net change in employee benefits  0.4   0.4     9.7   (7.5) 2 Adjusted Net Revenues is not a recognized measure under International Financial Reporting Standards and therefore the Fund’s method of calculating Adjusted Net Revenues is unlikely to be comparable to methods used by other entities. Adjusted Net Revenues means net revenues less raw material purchase costs plus (minus) derivative financial instrument gain (loss) (“Net Revenues”) excluding change in fair value of embedded derivatives and after the change in the inventory margin.  The Fund uses Adjusted Net Revenues as it believes it provides the best indication of the net revenues generated in a period and provides the ability to compare net revenues generated in different periods.Net Revenues Reconciled to Adjusted Net Revenues     For the three months ended June 30     ($ millions)20202019  Net Revenues$  28.6$  48.6  Change in fair value of embedded derivatives  1.6  (2.0) Increase (decrease) in inventory margin net of change in fair value of embedded derivatives  18.2  (12.1) Adjusted Net Revenues$  48.4$ 34.5  3 Unit production costs is not a recognized measure under International Financial Reporting Standards and therefore the Fund’s method of calculating unit production costs may not be comparable to methods used by other entities. Unit production costs means production costs divided by total tonnes of zinc produced. The Fund uses unit production costs as it believes it provides the best indication of the costs of production in a period and provides the ability to compare production costs in different periods.For further information, please contact: Paul Einarson Chief Financial Officer of Canadian Electrolytic Zinc Limited, Noranda Income Fund’s Manager Tel: 514-745-9380 info@norandaincomefund.com

  • GlobeNewswire

    Noranda Income Fund and BaseCore Metals Announce Stream Agreement

    Stream Proceeds to Fund Strategic Long-term Investments in Zinc Processing FacilityTORONTO, July 27, 2020 (GLOBE NEWSWIRE) -- Noranda Income Fund (TSX:NIF.UN) (the “Fund”) through its wholly-owned subsidiary, Noranda Income Limited Partnership, and BaseCore Metals LP (“BaseCore”) today entered into a definitive stream agreement over reference zinc processed and refined at the Fund’s electrolytic zinc processing facility (the “Stream”) located in Salaberry-de-Valleyfield, Quebec (the “Processing Facility”). BaseCore will advance a cash consideration of US$40 million for the Stream. Proceeds will be used to improve the Processing Facility’s filtration and cooling processes to support increased zinc production capacity (the “Expansion Projects”) and for general corporate purposes. “We are pleased to partner with BaseCore and to secure long-term financing that will allow us to improve our capital structure while making strategic investments that will enhance our operational efficiency and production capacity, and ultimately, improve our profitability,” stated Liana Centomo, Chief Executive Officer of Canadian Electrolytic Zinc Limited, the Fund’s Manager. “Increasing our ability to process a wider variety of zinc concentrates, especially as the availability of lower impurity local feed continues to decline, will decrease our production costs per tonne, make us more flexible and strengthen our position as a leading, low-cost producer of refined zinc metal in North America.”“BaseCore is excited to partner with Noranda Income Fund in the first stream of its kind on a smelting operation while providing it capital to further enhance its world-class processing facility. The strength, resiliency and attractiveness of this asset and management team was apparent during our detailed review of this opportunity and we are excited at the prospects of a long-term partnership,” said Akshay Dubey, Director of Business Development of BaseCore. “We remain committed to our focus of building a portfolio of high-quality base metals streams and royalties while providing our partners with bespoke financing solutions that meet their specific needs. As evident and with the continuing support of its shareholders, BaseCore continues to be active in originating and executing on additional stream and royalty transactions despite limitations resulting from the COVID-19 pandemic.”Transaction Terms * BaseCore will purchase from Noranda Income Fund LME zinc warrants corresponding to 1.00% of zinc processed and refined at the Processing Facility until the later of (i) June 30, 2030 or (ii) 68 million pounds of LME zinc warrants have been delivered. * BaseCore will make ongoing payments equal to 20% of the zinc LME cash settlement price at the time of delivery. * BaseCore will pay US$40 million for the zinc stream as an advance payment against the purchase price for the sale of zinc to BaseCore, that, while ensuring the cash profile is positive during the construction period, is to be paid as follows: * US$12 million paid on closing * US$12 million paid upon the earlier of the completion of certain construction milestones and Dec. 31, 2021 * US$16 million will paid upon the earlier of the completion of certain construction milestones and June 30, 2022 * Zinc deliveries will be secured and guaranteed by each of the Fund’s subsidiaries as well as Canadian Electrolytic Zinc Limited and its immediate parent, N-Zinc Ltd. Such security will be second-lien to the Fund’s existing ABL lenders other than the security over the Processing Facility, which will be first lien. * The Fund has granted BaseCore with a right of first refusal over all base metal streams relating to the Processing Facility for the first five years of the Stream and a right of first offer for the following five years. * The transaction is expected to close by July 31, 2020 and is subject to customary closing conditions.Strengthening the Processing Facility’s Position as a Leading Low-cost ProducerIn alignment with the Fund’s long-term strategy to decrease its production unit costs and increase profitability, the Fund will move forward, effective immediately, with the installation of additional belt filters and related equipment to increase the Processing Facility’s filtration capacity, and two additional cooling towers in the cell house to improve cooling capacity in the summer months. 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. Assuming zinc prices of $2,300 per tonne, treatment charges of $200 per tonne of concentrate, and production costs and by-product revenues adjusted for inflation and higher production volumes, these investments are expected to provide an internal rate of return of approximately 30%. The Expansion Projects are included in the recently approved application under the Government of Quebec’s L-20 electricity rate reduction program and will generate approximately 16 months of electricity rate reductions.Expansion projects overview Increasing the Processing Facility’s filtration capacity will increase its flexibility to treat varied feeds. With local concentrate feeds diminishing and the trend of global feed grades decreasing, the Processing Facility will improve its ability to process a higher volume of impurities, namely iron, as existing equipment has reached its saturation point. This will allow the Processing Facility to maintain its current production levels as well as to increase zinc production. Construction work consists of the addition of two belt filters, one for treating residue and the other for treating process water generated for the filtering of the residue, a building to house them, and increasing cement mixing capacity to produce jarofix. The expanded filtration building will also be able to accommodate a third belt filter. The option of the installation of a third belt filter, not included in current cost estimates, will allow the operation further flexibility to react to changes in global feed qualities.The other key project is aimed at increasing the cooling capacity of electrolyte in the cell house where zinc is plated with the installation of two additional cooling towers. The zinc plating process generates heat and increases the temperature of the electrolyte. The cell house electrolyte must be maintained at a maximum temperature to operate efficiently and for the proper plating process to occur. To maintain the optimal temperature, the electrolyte is continually pumped through cooling towers. During the summer months, the plant’s throughput must be reduced to respect its current cooling capacity.Attractive Addition to BaseCore’s Leading Base Metals Royalty and Streaming Portfolio This investment provides BaseCore with long-term exposure to a high-quality cash flowing stream on an asset attractively placed on the global cost curve and will be a key contributor to BaseCore’s portfolio which includes Net Profit Interests on the world-class Antamina mine and Highland Valley mine along with royalties on the development stage El Pilar and Horne 5 projects. The profile of the Processing Facility and Stream aligns strongly with BaseCore’s investment criteria including jurisdiction, maturity and ESG performance while providing exposure to a key base metal commodity in zinc. BaseCore continues to be committed to working collaboratively with potential partners to establish financing structures that assist them in meeting their objectives while providing BaseCore with exposure to the underlying base metal commodity.Related Party Transaction and Approval Process The Stream is considered to be a related party transaction pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions (“MI 61-101”) as Glencore Canada Corporation (“Glencore Canada”), a limited partner in BaseCore, is a control person of the Fund.To review and evaluate the merits of the Stream, the Audit Committee of the Board of Trustees of the Noranda Operating Trust (the “Audit Committee”) comprised entirely of Trustees independent of the related party, reviewed the potential transaction. The Audit Committee, with the assistance of financial (Fort Capital Partners) and legal advisors (Torys LLP), undertook a deliberate and full consideration of the Stream and various financing alternatives. The Stream was determined to be the most advantageous offer. Upon the recommendation of the Audit Committee that, among other things, the Stream is in the best interests of the Fund and the Stream is on reasonable commercial terms that are not less advantageous to the Fund than those that were available from arm’s length parties, the Board of Trustees (other than interested Trustees who abstained from voting as a result of their relationship with Glencore Canada) unanimously approved the Stream.The formal valuation requirement pursuant to Section 5.4 of MI 61-101 is not applicable to the Stream. The Stream is exempt from the minority approval requirements of MI 61-101 as the Stream is (i) on reasonable commercial terms that are not less advantageous to the Fund than if the Stream was obtained from an arm’s length party, and (ii) not convertible or repayable, directly or indirectly, into equity or voting securities of the Fund or any subsidiary of the Fund. As noted above, the Stream is expected to close by July 31, 2020 which is reasonable and necessary given the customary nature of the closing conditions and the desire to provide funding to promptly progress the investment projects in the Processing Facility.In accordance with the terms of BaseCore’s constating documents, the Stream was approved by the Board excluding Glencore representatives, as a result of Glencore Canada’s interest in the Fund.Forward-Looking InformationCertain information in this press release, including statements relating to the scope, timing and completion of the investments in the Processing Facility, the impact of the investments on the operations of Processing Facility and the operating and financial results of the Fund and expected closing date of the Stream are forward looking information. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "is positioned", "estimates", "intends", "assumes", "anticipates" or "does not anticipate" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, results or benefits from the Stream contain forward-looking information. Statements containing forward looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events.Forward-looking information is necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable as of the date of this press release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in greater detail in the "Risk Factors" section of the Fund’s Annual Information Form dated March 30, 2020 for the year ended December 31, 2019 and the Fund’s other periodic filings available at www.sedar.com. These factors are not intended to represent a complete list of the factors that could affect the Fund; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. The forward-looking statements contained in this press release are made as of the date of this press release, and the Fund expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.BaseCore Metals LP, an independent 50/50 joint venture between Glencore Canada Corporation and Ontario Teachers’ Pension Plan Board, is a leading base metals focused streaming and royalty company. BaseCore Metals provides strategic, long-term and friendly financing to mining operators giving them superior access to capital for funding of exploration and development, mine expansions, mergers and acquisitions, balance sheet flexibility and reclamation obligations. Further information about BaseCore Metals can be found at: www.basecoremetals.com. 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:BaseCore: Akshay Dubey Director, Business Development of BaseCore Tel: 416-775-1699 info@basecoremetals.comNoranda Income Fund: Paul Einarson Chief Financial Officer of Canadian Electrolytic Zinc Limited, Noranda Income Fund’s Manager Tel: 514-745-9380 info@norandaincomefund.com