SALABERRY-DE-VALLEYFIELD, QUÉBEC--(Marketwired - Nov. 18, 2016) - Noranda Income Fund (TSX:NIF.UN) (the "Fund") announced today that the Board of Trustees of Noranda Operating Trust (the "Board") has approved a distribution for the month of November 2016 of $0.025 per Priority Unit payable on December 28, 2016 to Priority Unitholders of record as at the close of business on November 30, 2016.
On November 3, 2016, the Fund announced that it received written notification from Glencore Canada Corporation ("Glencore Canada") indicating its renewal of the Supply and Processing Agreement for a period of five years through May 2, 2022. In accordance with the Supply and Processing Agreement, under the renewed term commencing on May 3, 2017, Glencore Canada will arrange, as Agent on behalf of the Fund, for the purchase of zinc concentrate required by the Fund. The Fund is expecting that such purchases will be at market terms. Purchase arrangements, including market terms, have yet to be agreed. The transition to market terms will represent a significant change from the fixed processing fee the Fund has benefited from since its inception. As a result of the change to market term pricing, the Fund's financial results will differ materially, beginning in the second quarter of 2017. Cash distributions of the Fund would also be negatively impacted if, as expected, the Ordinary Units owned by Glencore Canada are exchanged for Priority Units as of May 2, 2017, resulting in the cessation of the subordination of distributions to Priority Units.
When not restricted, and as may be considered appropriate, the Fund's policy is to make monthly distributions to Unitholders. The Board also continues to evaluate on a monthly basis the expected future cash flows of the Fund as well as the reserves that may be required in the future. The Board is mindful of the expected negative impact that the transition to market term pricing will have on the Fund's operations, including its ability to sustain its distribution policy. There is no assurance that distributions will continue in future, nor is there any assurance that, if they do continue, the level or frequency of such distributions will not vary.
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.