Author Topic: ALS.TO - Altius Minerals  (Read 1348097 times)

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #5950 on: June 07, 2018, 12:19:58 AM »
https://www.platts.com/latest-news/metals/moscow/analysis-high-grade-iron-ore-premiums-surge-closing-26969345

Price for 65% Fe is 29% higher than the 62% Fe benchmark. The premium is at an 8 month high.

Platts also notes that the penalty for alumina has surged to US$6 per every 1% of alumina.

Bloom Lake deposit has 0.3% alumina. Kami even lower at 0.1% alumina. One primary Australian iron ore product averages 2.25% alumina.

The Trough ores will command a ~US$12 per tonne premium to the Aussie ore just based on alumina penalties/premiums. That’s a big margin.


linealdin

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Re: ALS.TO - Altius Minerals
« Reply #5951 on: June 07, 2018, 07:20:58 AM »
http://www.mining.com/web/miners-creep-legal-minefield-brazilian-scales-tip/

Wood Mackenzie predicts the Samarco iron ore and pellet operation in Brazil won’t come back online until 2020. Samarco is one of IOC’s only competitors in the direct reduction pellet market. With Samarco out of the game for up to two more years IOC is going to be able to charge high premiums to its desperate pellet customers. The Platts article above notes that pellet premiums have reached US$50 per tonne.

The Minas Rio iron ore mine in Brazil should be shut down for the rest of 2018 because of a pipeline accident. It produced high quality direct reduction pellet feed (68% Fe, 1% silica, 0.3% alumina) for a customer in the Middle East. See slide 9 of this presentation:

http://www.metalbulletin.com/events/download.ashx/document/speaker/8604/a0ID000000ZOoeiMAD/Presentation

I believe Champion has stepped in to supply this former Minas Rio customer with its high grade pellet feed. Two of its bulk carriers are headed to Port Said, Egypt. (Champion’s original plans had focused on customers in Asia.)

I expect some very good margins in Champion’s Q2 financials. The two Middle East shipments have much lower shipping costs than the long trip to Asia. More profit to the producer. Lucky break for Champion.
« Last Edit: June 07, 2018, 07:25:52 AM by linealdin »

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #5952 on: June 07, 2018, 10:41:51 AM »
Notes on Champion’s proposed Phase 2 expansion:

1) Cliffs already spent US$1.5 billion on Phase 2 expansion at Bloom Lake. US, not Canadian dollars. An astonishing investment.

2) Because of all that investment Champion has a mining fleet capable of moving 30 million tonnes of material annually.

3) The second concentrator is 70% complete. The building looks beautiful.

4) There’s a spare parts inventory worth C$43 million, ready to be used for Phase 2.

5) The Phase 2 expansion when Cliffs planned it was supposed to reduce overall operating costs by $15 a tonne. I assume Champion’s expansion plans will also aim to significantly reduce opex for the overall Bloom Lake complex. Reduced opex will help Bloom Lake survive through the low points of the iron ore cycle. Anti-fragile.

6) Where does Champion obtain the port capacity for Phase 2? New Millenium sold 6.5 million tonnes of port capacity to Tacora but still retains 8.5 million. Alderon has 8 million tonnes. LIM had capacity but went bankrupt and defaulted on its port payments.

7) What about rail capacity? Still plenty left on the QNS&L but there will be a squeeze eventually. I believe IOC will start studying an expansion towards 30 MTA soon. They see the demand for high grade ore and pellets.
« Last Edit: June 07, 2018, 11:22:39 AM by linealdin »

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #5953 on: June 07, 2018, 12:07:55 PM »
Fortescue and Mineral Resources fighting over Atlas Iron’s coveted 13 MTA of port capacity. Will Alderon’s 8 MTA of port capacity come into play eventually?

An Alderon takeover would solve Champion’s Phase 2 port capacity issues. And add a billion tonnes of ore to their portfolio located right over the provincial border. Plenty of optionality for future expansions. Don’t underestimate O’Keeffe’s ambitions. I think a Phase 3 expansion to 21 million tonnes is on his mind.

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #5954 on: June 07, 2018, 01:46:39 PM »
http://www.mining.com/copper-price-surges-highest-since-january-2014/

Copper hits $3.32, a 4.5 year high. Escondida, the world’s largest copper mine, looks poised for a strike.

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #5955 on: June 07, 2018, 07:04:25 PM »
https://www.google.com/amp/s/www.barrons.com/amp/articles/copper-prices-could-triple-in-10-years-1528399817

A case for $10 copper during a multi-stage bull market over the next 5 to 10 years.

$10 copper means Chapada would bring in over C$60 million annually. Something to dream about.

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #5956 on: June 08, 2018, 06:38:33 AM »
https://www.platts.com/latest-news/metals/london/swedens-kaunis-targets-low-alumina-silica-in-26970884

“Platts published Thursday the alumina differential as seen for iron ore fines in the 60%-63.5% Fe band -- at $6/dry mt per 1% of alumina in the band 1%-2.5% and $6/dmt for the 2.5%-4.5% band. This was up from $2.50/dmt for both ranges, a month earlier.

“Canadian concentrates usually have the added advantage of very low phosphorous. Higher phosphorous can limit the steel grades a producer can offer and place limitations in steelmaking and recycling in the works. Penalties and premiums for phosphorous have been stable while those for silica have fallen as more attention shifted to differentiating on alumina.”

*

So alumina premiums/penalties have moved from US$2.50 per 1% to US$6 per 1% in just a month. Labrador Trough’s alumina advantage over certain leading Aussie ores has moved from US$5 per tonne to over US$12 per tonne.

If this is a structural change in the market it is significant. Iron ore benchmark is only US$64.69. This one contaminant premium nets Alderon a 19% higher price.

Add to that steady premiums for low phosphorous and falling penalties for silica (Trough ores have average amounts of silica).

Everything is moving in the right direction. The updated feasibility for Kami should include these market changes. I want to see an NPV above US$2 billion.

« Last Edit: June 08, 2018, 06:42:11 AM by linealdin »

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #5957 on: June 08, 2018, 11:51:25 AM »
http://www.cbc.ca/news/canada/newfoundland-labrador/voiseys-bay-mining-announcement-planned-1.4697699

Voisey’s Bay underground mine development to be re-started. Announcement on Monday with the provincial government.

Another 18 years of revenue once the royalty dispute is settled in September.

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #5958 on: June 08, 2018, 12:29:41 PM »
I’m certain Vale will lose the Voisey’s Bay lawsuit. If they are staying in the province for the next 20 years it makes it more likely Royal Gold and Altius will be able to collect the judgment. Declaring bankruptcy for Voisey’s Bay and Long Harbour not an option anymore.

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #5959 on: June 09, 2018, 03:13:03 AM »
https://www.google.com/amp/s/www.bloomberg.com/amp/news/articles/2018-06-08/vale-is-said-to-reach-700-million-deal-to-sell-cobalt-output

Vale reaches deal to sell $700 million of cobalt from future production at Voisey’s Bay. This is how they will finance the underground mine. Quite a coup for Vale to lock the deal down while cobalt prices are sky high. Whoever is giving Vale the $700 million is a sucker.