FILED BY NORANDA INC.
PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933
SUBJECT COMPANY: FALCONBRIDGE LIMITED
COMMISSION FILE NO: 333-123547
NORANDA INC. COMMISSION FILE NO. 333-123546
The following is a transcript of the Question and Answer session that
occurred during the First Quarter Conference Call of Noranda Inc. on April
26, 2005.
NORANDA INCORPORATED
Q1 2005 CONFERENCE QUESTION AND ANSWER SESSION TRANSCRIPT
CALL MODERATOR: DENIS COUTURE
APRIL 26, 2005
8:00 AM CT
Operator: Thank you.
Ladies and gentlemen, if you would like to register a
question, please press the 1 followed by the 4 on your
telephone. You will hear a three-tone prompt to
acknowledge your request. If your question has been
answered and you would like to withdraw your
registration, please press the 1 followed by the 3. If
you are using a speakerphone, please lift your handset
before entering your request.
One moment, please, for our first question.
Our first question comes from the line of Terence
Ortslan of TSO and Associates. Please proceed.
Terence Ortslan: Thanks, operator.
In your inventory numbers year-over-year and also end
of December, despite the fact that metal prices are up
and maybe some currency issues there, but they haven't
changed at all, can you explain that?
Derek Pannell: I think it's just a function of timing to some degree,
Terry. The metal prices particularly in nickel have not
changed much, copper definitely has risen. But there's
no other explanation really. And, as you point out,
perhaps exchange and just some timing issues; I don't
think it's indicative of any fundamental change in the
business.
Terence Ortslan: But volume wise, you must be running very low
inventories and that's what your maybe also saying, is
it true possibly?
Derek Pannell: No, I think quarter-over-quarter you've got - a certain
swing in inventories.
And, you know, just to give you some examples. If you
happen to have a boat that's just left on the second of
the following month, say, from Antamina or Collahuasi,
or you've just received a boat of anodes at the CCR
Refinery from Altonorte, you can get a bit of a swing
there. And there's nothing in the results that is any
different from those sort of typical working variables.
Terence Ortslan: Okay.
I know you guys pay a lot of attention to this and I
guess similar questions have been asked to other
companies as well. But, how much do you think your,
let's say, out-of-control cost will be up this year --
things like fuel, and labor, I understand that, I mean
some TC/RCs in the list, yeah, I understand that. But
what do you think the real input cost is going to be up
by this year that there's nothing you can do about?
Derek Pannell: Well, for us, TC/RCs, it's not something that we are
particularly exposed to just because, you know, we are
fully integrated. So in fact they could very well help
us.
In terms of energy - and again, it depends very much on
jurisdiction. And at places like Quebec and Ontario
where we tend to be in regulated environments that's
less of an issue. At Falcondo, again, there is a sort
of standard figure that we use there, it's 7 cents per
increase in dollar per barrel of oil. We were around I
think $38 per barrel over the quarter at Falcondo.
I don't have sort of one blanket figure for the
company, Terry, on energy. But what we're seeing
generally, I think is a little bit of an exception this
time, but generally seeing our actual cash cost, if
anything, decrease a little bit because we're getting
more than an offsetting by-product boost for the C1
cash cost.
Terence Ortslan: Okay.
One other question, as far as any capital expenditures
in 2005, $309 million, again, I think you implied
before that's a number that should continue into the
future, Steve?
Steven Douglas: Terry, - I guess this is one of the perils of calling
it sustaining and other. We've made assertions in the
past that our sustaining capital this year runs between
$200 to $250, and then combining into that $309 million
is several smaller projects which we just haven't
broken out. So we're not altering our view on that
sustaining capital number between $200 and $250 this
year; and it declines a little bit next year.
Terence Ortslan: Okay.
And last question, on El Morro, I thought you were
drilling -- the $17 million applies or implies what for
2005?
Derek Pannell: Oh, El Morro?
Terence Ortslan: Correct.
Derek Pannell: Well, we would be bringing El Morro to a feasibility.
Terence Ortslan: The cost of feasibility study, you had and all the other...
Derek Pannell: Not in '05 but we would be bringing El Morro towards a
feasibility study. And I would think - we don't have a
precise time schedule.
I mean we are focused mainly on the expansion projects
in the short-term of, you know, the existing operations
like Lomas, Collahuasi and Antamina for example. We
would see those sort of coming in the sort of three to
ten years timeframe perhaps. But we want to have them
sort of ready. We don't think we can just sort of sit
on these things.
So we're gradually bringing El Morro and El Pachon for
example forward so that they are in a position to go
fairly soon. So I think, we'd start to see feasibility
studies in 2006.
Terence Ortslan: Okay, because El Morro is a specific number but El
Pachon is in the other category I assume, in the CAPEX
number. It wasn't segregated.
Derek Pannell: Yeah, that's correct, Terry. It's not meant to convey
anymore focus or anymore, you know, dedication than the
other projects.
Terence Ortslan: Okay.
Good results, guys. Thank you.
Derek Pannell: Thanks, Terry.
Operator: Our next question comes from the line of John Redstone
of Desjardins Securities. Please proceed.
John Redstone: Good morning, gentlemen.
Going through this very extensive release you've got
out here, the one project that seems to be missing as
I'm going through the pages is the Alumysa project in
Chile. Could you update us on the status of that,
please?
Derek Pannell: Yeah. There has been no change, John.
You know, we've tried to provide I think a little more
fulsome details this quarter than we had perhaps in the
past. But the additional information on - if that's
what you think it is on Alumysa, it's not meant to
indicate any change in our status.
John Redstone: All right. And going forward, I mean, you know,
obviously during the negotiations with Minmetals, there
was some question about whether Noranda wanted to stay
in the aluminum business. What's your feeling on the
aluminum business today?
Derek Pannell: Well, judging by our results, they're really great.
John Redstone: I'm not surprised.
Derek Pannell: Yeah. No, it's going very well. We feel very satisfied
with it. In fact, we see a continuing upside
particularly we're not fully ramped up on the foil
side.
I think, too, the traditional gap that you have
between, the ratio that you have between aluminum and
copper, we still haven't seen it move up to the sort of
traditional ratios, you know, where there's replacement
that occurs between aluminum, copper. So either copper
is going to come down or aluminum is going to up. And
quite frankly, I don't see copper coming down very
much.
So, you know, we feel quite bullish on aluminum.
John Redstone: ((Crosstalk)) (unintelligible moment
Derek Pannell: I think, you know, John, I think what we have tried to
do in the last year is to make certain that we have the
aluminum business sort of really wrapped up in terms of
getting the bauxite and the alumina supply, you know,
which for most people has been an issue. We've now got
that in place with the Gramercy and St. Ann
acquisitions.
And then the power contract was the other piece that we
were missing. And we've just - I just mentioned earlier
in the call, we've got that fixed up. We've got a
15-year very nice contract working with Ameron.
And that - and then I guess the final piece is the
labor contract, we've just in place a five-year labor
contract last year. So - in fact we're feeling very
good about the aluminum business.
John Redstone: One last question. You have record margins on your
fabricating business and aluminum right now. Do you see
that being maintained through the second quarter?
Derek Pannell: Yeah, I think so, John, we've very good demand. We sort
of booked I think quite solidly up through that second
quarter.
In fact I would hope to see the margins increase as
we're able to move up the sort of margin scale as we
drop some of the more sort of bulk type foil business
and move into the higher margin business. You know,
we're trying to do that on a balanced basis as we
increase our capacity and move into higher margin
markets.
John Redstone: Thanks very much.
Derek Pannell: Thank you, John.
Operator: Our next question comes from the line of Greg Barnes of
Canaccord Capital. Please proceed.
Greg Barnes: Thanks.
I must have missed the announcement about getting back
up to full capacity at the Horne. Are you bringing in
third party concentrate from offshore or how are you
getting up to full capacity now there?
Derek Pannell: Well, at the present - if you remember, some years ago
we shut down Gaspe and we had turned the Horne down
about two years ago. So - I think it was about two
years ago.
Denis Couture: Year and a half.
Derek Pannell: A year and a half ago, yeah.
So, going through that period of very low prices, we
were relatively well-served with concentrate and
continue to be based on the contracts that we had. We
see an opportunity now with the market to take
advantage of that. There is a fair amount of
concentrate out there. Although we - with sort of
Antamina and so on, we certainly have concentrate to
keep it supplied. We don't see that an issue. But
certainly, some of the concentrate would be coming from
offshore.
Greg Barnes: Okay, thank you.
Just quickly, on American Racing, have you made any
further decisions there about what you're going to do?
Derek Pannell: No. Essentially, as you know last quarter we wrote that
down. I think we now see that as sort of largely
irrelevant to, you know, the overall company results
and we're moving forward essentially on the same lines
that we talked about at the last quarter.
Greg Barnes: Okay, thank you.
Operator: Ladies and gentlemen, as a reminder, if you would like
to register for a question, please press the 1 followed
by the 4.
Our next question comes from the line of Brian
MacArthur of UBS. Please proceed.
Brian MacArthur: Hi, good morning, a couple of questions.
First of all, this is a great presentation. But just
going through the pro forma earnings that you've given
for the first quarter, the tax rate, you know, and the
pro forma has dropped to 33% from 41%. Can you just
elaborate exactly what happens there whether that's -
how you see it going forward? I know you've got the
caveat this may not be indicative, but just to explain
a little bit more what's going on there?
Steven Douglas: I think, Greg, I have to cast my mind back to the
nuances of the preparation of the first quarter.
But I think as you correctly pointed out, this is
indicative. And when you start putting these together,
you can see the - unfortunately the litany of
assumptions you have to make in the back. I think what
I'll do is I'll default to the sort of operating number
which is where we will settle out on on a look-forward
basis.
So somewhere between 30% and 33% would be our - would
be my guidance. And that's just turning to the
operating number.
Brian MacArthur: Right. So, I mean at one time between the two companies
are all sorts of tax structures and pools, I mean is
that all sort of cleaned up so that 30% to 33% be
something we just assume going forward?
((Crosstalk))
Steven Douglas: Brian, I would not for a second want to suggest to you
this is a simple equation...
Brian MacArthur: No, it's not.
Steven Douglas: ...in terms of the structure that underlie this.
But the facts are when we put the two companies
together as well, there is going to be some
opportunities I think for some clean-up and some more
efficient uses of the structures which we've done a bit
of work on at this point. But as I've said, I think if
you just stick with that 30% to 33% figure, you'll be
well-served.
Brian MacArthur: Great. That's very helpful. Thank you.
Maybe just following up on John's question to Derek
regarding the aluminum business you talked about, you
know, we're still not at capacity and yet we're
removing the product mix to a more favorable mix as
well to increase margins as we go forward. If I sort of
give you a scale from 0 to 100, where are we on the
capacity? What I would say the maximum or the most
efficient utilization, i.e. mix and volume, if you see
what I'm saying, because I realize, you could have
lower volumes and better mix and that would be better
for you. But just how much more do we have in that
system?
Derek Pannell: Yeah. I would say on the primary side, we're probably -
I'd say sort of 97%...
Derek Pannell: Right.
Derek Pannell: ...there, okay? So - and we're probably pretty close,
maybe the same on the value added products there. So
that's the figure you could use on the primary side for
the smelter. Although we only just came into possession
of the bauxite and the alumina asset.
So there, I would think that there would be - jeez,
it's good to say - I guess maybe sort of 70%. We
haven't got together with our partners. We haven't
really looked at Six Sigma sort of applications there.
So 70%, 80% might be a better figure for the sort of
alumina operations, if you like.
And particularly since they just came out of
bankruptcy, so I would suspect that there's opportunity
there for improvements on the alumina side.
Peter is here. Maybe I could just ask him on the
rolling - rolling mills. Where would you say we were on
in terms of capacity, Peter?
Peter Kukielski: Right. I would say that we are of the order of 85% on
the rolling mills capacity. I mean we continue to
de-bottleneck the operations. We find at Huntingdon we
are now -- casting constrained - casting constraint as
opposed to mill constrained for example. So once we
address that, we'll get further capacity or further
volume out of it.
Derek Pannell: So we're saying 85% then on the rolling mills maybe.
Brian MacArthur: So I could assume going forward, if things worked out
well, we get sort of 15 more percent on the volume then
make some adjustment in superior-priced product mix to
expand margins a little above that. That's probably a
reasonable assumption?
Derek Pannell: Yeah, I'd say so. I mean that's not going to happen...
Brian MacArthur: Right.
Derek Pannell: ...in a twinkling of an eye. That would be something we
would be doing over a couple of years I would think.
Brian MacArthur: Great. And just one more question if I could, just back
to the Horne following up on Greg's question.
As we fill it up again, are we assuming that's
essentially all going to be concentrate or are you
still growing the, what I would call the HP recycle
businesses as well if I want to look at it that way, or
will that all be just concentrate?
Derek Pannell: That addition would be all concentrate. As we grow that
business, it does not consume the nameplate capacity.
That gets, to some extent, it doesn't compromise the
capacity -- the recycle business on a general basis. So
that would be all - it's about 30,000 tonnes of copper
which would be all concentrate feed.
Brian MacArthur: Great. Thank you very much.
Steven Douglas: Thanks, Brian.
Derek Pannell: Thank you.
Operator: Our next question comes from the line of Victor
Lazarovici of BMO Nesbitt Burns. Please proceed.
Victor Lazarovici: Thank you.
I'm kind of intrigued by the slide you have on Page 17
that shows a year-over-year variances. And in
particular, the metal prices and volume improvements
year-over-year gave you about 75 cents per share
notional benefit to earnings.
For the last year or two we've been hearing a great
deal about exchange impacts and energy cost and other
raw material impact. But the biggest single negative on
your analysis is Cost and Other, for 28 cents per
share.
I wonder if you could explain what those costs are.
Obviously some of that has to be volume related but it
hasn't been given a great deal of discussion or
explanation.
Steven Douglas: I think Victor, you've hit the nail on the head there
and that a lot of it is the variable input. Derek
mentioned that. For example at Falcondo, with the oil
price doing what it's doing, it does have impact of
uptick in those costs.
Perhaps we could have done a better job of overlaying
the volumes specifically to the fact that we are
generating incremental volumes, and that's something
we'll take into advice for the future. But I would say
the vast majority of that is attributed to the
operating cost.
The other component there, and if you were on the
Falconbridge call as well, there is a swing in their
mark-to-market on some hedges which would have reduced
those earnings by about $13 million in the quarter. So
those would be the two major inputs.
Victor Lazarovici: Steve, the energy at Falcondo isn't picked up in the
energy cost.
Steven Douglas: Sorry. You're right, you're right. But it was meant to
be sort of a blanket, sort of - just sort of other
operating cost, not caught at that bucket.
Victor Lazarovici: But if you exclude the $13 million for the
mark-to-market, is it fair to say that the other $71
million is just unit cost going up for reasons other
than input cost? And of course, a significant amount
would be volume related as you increase your
production.
Steven Douglas: Yes, a significant amount of it would be volume
related. We'll do a bit more work and we'll get back to
you on that answer.
But I think, to be more specific, but I think the vast
majority of it is volume related.
Victor Lazarovici: Okay, thank you.
Operator: Our next question comes from the line of (Roy Liam
Peck), ING. Please proceed.
(Roy Liam Peck): Good morning.
Can you take a moment to focus on your balance sheet?
Growth debt levels remain at relatively high level, but
on the net basis, I would say, they're more reflective
of your low triple B ratings. The pending Falconbridge
transaction will lead to some credit deterioration.
Can you comment on this issue and the fact that the
rating agencies as well as investors recognize your
ability to reduce debt but the big question is you're
willingness to reduce debt?
Steven Douglas: I think - there's no question I think about our
willingness in the quarter. We did pay off $154 million
and we're amortizing contractually over $400 for the
next - in the next five months. And if - I would -I'd
take a bit of an issue with the assertion that there's
a credit degradation by virtue of this transaction. In
fact, I will argue the opposite.
If you look at the beginning of last year, which would
be the beginning of 2004, we stood at a debt-to-capital
about 43%, 44%. And through the course of the year, we
de-levered it by some 600 basis points through a
combination of paying down debt, which I think we've
paid down about $500 million last year and didn't
replace, and through banking cash that we generated
through the operations.
When you, you know, pending to the outcome of our,
obviously our offer, but when you put the two companies
together, you now have a tremendously more efficient
capital pool that is - that can be much more easily
targeted in terms of the cash generation and what we do
with it.
And if you look at the EBITDA that we're actually
generating, just to assume that we can replicate what
we're able to do last year, and if you look at the run
rate on that EBITDA and the cash that we're actually
generating, we're generating north of - or around $2
billion. You're spending $700, of which $500 is
essentially investing in the asset base, and it's
frankly discretionary.
And then the combined new entity, assuming we get
there, will have about $350 million of corporate costs
including the full load on the preferred share
dividend.
So you're sitting there with $1 billion of incremental
cash to reduce debt and to reinvest in the assets.
So I think the rating agencies have been - responded
accordingly in saying that there is a degree of
uncertainty with respect to what the outcome here is.
Although given the reaction, as Derek mentioned, it's
very positive feedback that we're getting. So we have
every reason to believe we will be able to culminate
the transactions we've got on our table. And when we do
that, we'll go back and talk to the rating agencies.
I think their initial reaction was consistent with
yours, is that the debt, albeit on a net basis, was a
little higher than our peers. But we've already drawn
that down 300 basis points in the first three months of
this year.
So I frankly think if you look philosophically, the
amount of cash we will have in our books, we will be in
a great position to de-lever because frankly you can't
spend it prudently fast enough in any other way.
So I would suggest that we have one more crack to the
rating agencies and after we culminate this
transaction, to go back and go through the credit
merits. But I think if you look at all of the
attributes we just went through, I would argue that our
credit position is actually improved.
Derek Pannell: Oh, I mean, I would agree with you. It's just in
conversation with the agencies, it appears that they
are looking at things through the cycle, the concern,
they're saying, "Hey this is where - the way it is at
the peak of the cycle, what happens at the troughs?" So
that's just the issue that I was just hoping you will
address and you did. So thank you.
Steven Douglas: No, just to add onto that, I agree with you 100% that
at the beginning of last year people would look at the
- at almost the earnings that we started to generate.
And the cash flow we generated almost is anomaly. But
now a year and a half deep into the cycle and prices
remaining pretty strong, you can even see you don't
need a five-year cycle to substantially change the debt
outlook to this company, frankly you need, you know,
another year of strong results and maybe some other
cash generation that we have out there and you can
materially change the credit outlook for this company.
Derek Pannell: Thank you, gentlemen.
Operator: Our last question comes from the line of Daniel Roling
of Merrill Lynch. Please proceed.
Daniel Roling: Thank you.
Gentlemen, I missed your utilization rate for the
aluminum smelter? Could you repeat that?
Derek Pannell: Yeah, the aluminum smelter is I'd say about 97%, Dan,
you know, it's difficult to say. And when they get to
100%, I'll ask them to do more.
Daniel Roling: Good.
The other question I have is yesterday I think we
picked up - there was a report of a leak at Gramercy,
and can you bring us up to date on that?
Derek Pannell: Yes, certainly. Peter do you want to talk about that?
Peter Kukielski: Yeah. It's not a leak so much as a caustic spill. A
caustic tank in the precipitating section failed and
about 160,000 gallons of caustic was discharged. Almost
all of it other than maybe perhaps 10,000 gallons was
contained, and the 10,000 gallons that overflowed the
berm was being directed to the diversion channels which
directed it to neutralization. So in effect it was
completely contained and neutralized.
Daniel Roling: Any...
Peter Kukielski: And the impact on operations has been about of the
order of a couple of hundred thousand - I'm sorry, a
couple of hundred tonnes a dayand we're almost through
it. We don't anticipate any material change in our
output for the year.
Daniel Roling: So no material for the outputs. You'll be able to make
this up or is it just down a few days?
Peter Kukielski: It'd be down for about - for a couple of weeks but it's
only a part of the plant's output. We produce 3,300
tonnes a day and we're releasing about 200 tonnes a day
of production. We think we can make most of it up.
Daniel Roling: Okay, good.
And an estimated cost on that?
Peter Kukielski: The cost is quite minor because most of it is covered
by insurance. In fact we don't even know if we will
reach our deductible. I would say not much more than of
the order of $1 million.
Daniel Roling: Okay. And can you give us any further detail on the New
Madrid power contract? Is it interruptible? Is there
encouragement for you to scale back use during the peak
usage times because of the rate structure, et cetera?
Derek Pannell: I can't. No, I don't have that at hand.
Daniel Roling: Okay.
Derek Pannell: It's, as I say, it's a contract that is regulated. It's
based on our long-term contract with Ameron who I
believe in turn has that sort of backed up by coal
contracts I think we're at 35.2 cents.
(Daniel Roling): Okay. Thank you very much.
Steven Douglas: Thanks, Dan.
Operator: Mr. Couture, we do have a question from the line of
Fraser Phillips.
Denis Couture: Yes, yes, no problem. Go ahead.
Operator: Thank you.
RBC Capital Markets.
Please proceed, Mr. Phillips.
Fraser Phillips: Thanks.
Gentlemen, I was left with the impression from your
road show marketing was the distinct impression that
the aluminum assets might be for sale at an effort to
reduce that in the balance sheet but I didn't get that
earlier from Derek's response to one of the other
questions and I wonder whether it's incorrect coming
out of those other presentations or whether something
has changed or - so if you could sort of give me some
guidance, I would appreciate that.
Derek Pannell: Yes, certainly. Basically everything is for sale at the
right price. That's what I would say.
But the point that I was trying to make during the
presentations was that what we've done with the
aluminum group and there were a lot of questions at the
time based on what we have said with Minmetals. And
what I was trying to do is to make it clear that we
have, with all those things -- the power contract the
alumina, the labor contract and so on -- we have got
that asset and I guess, to some extent, other assets.
But that particular one, sort of in a shape, that it is
quite a negotiable asset. And if people were to
question our ability to handle the debt and that side
of the balance sheet, then, you know, my - the thinking
was that certainly the negotiability of the aluminum
assets either in part or the whole would offset that
concern. But we are not in a process at the present
time with the aluminum assets.
Fraser Phillips: So the articulation of the strategy and the emphasis on
copper and nickel is not so much to suggest that you're
going to just I guess get rid of current assets in the
zinc and aluminum business, but rather focus on growth
there?
Derek Pannell: Let me put it this way. Our asset - our focus is
clearly on copper and nickel mining growth. And those
are the projects that we highlighted during the road
show and that I've highlighted I think over the past
sort of year and so on.
If we have an opportunity that requires generating
additional capital in order to sort of grow on the
copper and nickel side and there are exciting
opportunities that come to us and it makes sense, then
that certainly is a negotiable asset.
I think clearly we are - although it's very efficient
and runs very well, I think that 10% of the US -- while
it's a substantial - 10% of the US market is a good
position to be in, it's still not perhaps critical size
and it may not be yet fully recognized within the
company. And that's generally the feeling that I would
have.
Fraser Phillips: Okay. Thank you, Derek.
Derek Pannell: You're welcome.
Operator: Mr. Couture, there are no further questions at this
time. I will turn the call back to you. Please continue
with your presentation or closing remarks.
Denis Couture: Thank you, operator.
A recording of the conference will be available at
10:00 am this morning by dialing 416-626-4100 and
1-800-558-5253, pass code 21237074, and this will last
until May 03.
I would also like to remind you that the company's
Annual General Meeting will take place this morning at
10:00 am at the Design Exchange, 234 Bay Street here in
Toronto.
And finally our second quarter results will be
announced on Friday, July 29. And that's it for us.
Thank you very much for joining us and goodbye.
Operator: Ladies and gentlemen, that does conclude the conference
call for today. We thank you for your participation,
and ask that you please disconnect your line.
This document may contain forward-looking statements concerning the
Company's business and operations. The Company cautions that, by their
nature, forward-looking statements involve risk and uncertainty and the
Company's actual results could differ materially from those expressed or
implied in such statements. Reference should be made to the most recent
Annual Information Form for a description of the major risk factors.
This communication is being made in respect of (a) the offer (the
"Falconbridge Offer") by Noranda Inc. to acquire all of the outstanding
common shares of Falconbridge Limited (other than shares owned by Noranda)
on the basis of 1.77 Noranda common shares for each Falconbridge common
share and (b) the issuer bid (the "Preference Share Exchange Offer") by
Noranda to repurchase approximately 63.4 million Noranda common shares in
exchange for three new series of preference shares. In connection with the
Falconbridge Offer and the Preference Share Exchange Offer, Noranda filed
with the U.S. Securities and Exchange Commission (the "SEC") registration
statements on Form F-8 containing a share exchange take-over bid circular
to be delivered to the shareholders of Falconbridge and an issuer bid
circular to be delivered to shareholders of Noranda. Noranda, if required,
will be filing other documents regarding the transactions with the SEC.
INVESTORS ARE URGED TO READ CAREFULLY THE SHARE EXCHANGE TAKE-OVER BID
CIRCULAR AND THE ISSUER BID CIRCULAR AND ANY OTHER RELEVANT DOCUMENTS FILED
OR TO BE FILED WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION.
Investors will be able to obtain documents filed with the SEC free of
charge at the SEC's website (www.sec.gov). In addition, documents filed
with the SEC by Noranda may be obtained free of charge by contacting
Noranda at (416) 982-7111.
Noranda is a leading copper and nickel company with investments in
fully-integrated zinc and aluminum assets. The Company's primary focus is
the identification and development of world-class copper and nickel mining
deposits. It employs 16,000 people at its operations and offices in 18
countries and is listed on The New York Stock Exchange and The Toronto
Stock Exchange (NRD).
END