Noranda Income Fund Provides Production Update; Revises 2022 Production Target
TORONTO, April 08, 2022 (GLOBE NEWSWIRE) — Noranda Income Fund (TSX:NIF.UN) (the “Fund”) announced today that operational challenges at its electrolytic zinc processing facility (the “Processing Facility”) in Salaberry-de-Valleyfield, Quebec, have negatively impacted zinc production and sales in the first quarter ended March 31, 2022, resulting in a revision in its annual production and sales target.
“A tight labour market and increased COVID-related absenteeism, coupled with cold weather impacting maintenance activities and resulting in a record number of electricity curtailments, have exacerbated ongoing operational challenges in the Electrolytic Hall. Despite the team’s best efforts, this has resulted in a deterioration in production quality and volumes in the first quarter of 2022,” said Paul Einarson, Chief Executive Officer of CEZinc, the Fund’s Manager.
“The Processing Facility team continues to work diligently to stabilize operations and has realized progress in improving operating conditions, a careful and gradual process given the complexity of smelting operations. In what remains a complex environment, achieving operational reliability improvements will be critical. We look forward to benefitting from our strategic expansion projects once these operational challenges are fully resolved,” added Mr. Einarson.
Zinc metal production in the first quarter of 2022 is expected to be 57,588 tonnes, compared to 66,345 tonnes in the first quarter of 2021. Zinc metal sales are expected to be 56,826 tonnes, compared to 66,277 tonnes in the first quarter of 2021. As a result, the Fund is revising its annual production and sales target to between 255,000 and 265,000 tonnes of zinc, from its previously disclosed target of between 270,000 to 280,000 tonnes for 2022.
The Fund expects to complete the commission of its strategic expansion projects, comprised of 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, in the second quarter of 2022.
2022 First Quarter Results
The Fund expects to report its financial and operational results for the first quarter ended March 31, 2022 on or around April 28, 2022.
About Noranda Income Fund
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, Quebec. 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
Certain 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 the impact of the amendments to the SPA, the Operating and Management Agreement, the Management Services Agreement, the Administration Agreement and the agreements relating to purchases of zinc concentrate and sale of zinc metal 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, 2022 for the year ended December 31, 2021 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.
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Chief Executive Officer of Canadian Electrolytic Zinc Limited, Noranda Income Fund’s Manager