Author Topic: ALS.TO - Altius Minerals  (Read 1342309 times)

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #5960 on: June 11, 2018, 07:37:50 AM »
http://www.ganderbeacon.ca/news/local/construction-to-start-this-summer-on-voiseys-bay-underground-mine-217387/

Vale proceeding with underground mine at Voisey’s Bay. Construction to begin this summer, $2 billion in capex, first ore by April 2021. Will add “at least” 15 years of production taking mine life to 2036.


linealdin

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Re: ALS.TO - Altius Minerals
« Reply #5961 on: June 11, 2018, 07:45:46 AM »
http://www.royalgold.com/property-portfolio/producing/voisey-s-bay/default.aspx

Royal Gold states Voisey’s Bay reserves at December 31st, 2017:

688 million pounds of copper
1.521 billion pounds of nickel
92.86 million pounds of cobalt

At current metal prices and exchange rates Altius’s 0.3% royalty on all that metal yields a total of C$63.5 million.

Once the underground ramps to Reid Brook and the Eastern Deeps are built it should be easier for Vale to continue exploration drilling for more underground deposits. Voisey’s Bay will grow.

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #5962 on: June 11, 2018, 08:13:49 AM »
http://www.rengold.com/s/NewsReleases.asp?ReportID=828148&_Type=News-Releases&_Title=Renaissance-Gold-receives-US200000-payment-from-AngloGold-Ashanti-to-mainta...

Anglogold Ashanti makes an option payment to Renaissance Gold to keep earning into the Silicon gold property. Anglogold recently completed a 6 hole drill program. Assay results are pending.

A further drill program is planned for later in 2018.

Altius holds a 1.5% royalty on Silicon. Anglogold Ashanti was the world’s 3rd largest gold producer in 2017 (3.76 million ounces). Surprising but true. It means something that Anglogold is committing resources to drilling this property.

mugwump

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Re: ALS.TO - Altius Minerals
« Reply #5963 on: June 11, 2018, 02:47:38 PM »

mugwump

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Re: ALS.TO - Altius Minerals
« Reply #5964 on: June 11, 2018, 02:51:59 PM »
cobalt 27 acquires streaming deal from vale at voisey bay
https://ceo.ca/@nasdaq/cobalt-27-acquires-us300-million-cobalt-stream-on

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #5965 on: June 12, 2018, 03:14:02 AM »
So Wheaton and Cobalt 27 are the “suckers” who bought the Voisey’s Bay cobalt stream. Very rough run through of the numbers:

US$690 total advance payment.

92.86 million pounds of cobalt reserves left. By January 2021 (when the stream kicks in) there may be only 80 million pounds left. Wheaton and Cobalt entitled to 75% of that 80 million pounds = 60 million pounds.

60 million pounds x current cobalt price of US$37.88 = US$2.27 billion.

So the deal works fine if cobalt prices hold or if Vale discovers more cobalt at Voisey’s Bay.

The problem is cobalt prices have nearly quadrupled very recently. Wheaton and Cobalt 27 have very little protection if the cycle moves against them. They are buying at the high.

My understanding is that there are literally thousands of Phd’s employed by these EV companies trying to figure out batteries which will use much less or no cobalt. Dangerous.

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #5966 on: June 12, 2018, 07:52:20 AM »
From the Cobalt 27 press release linked above:

“As estimated by Vale, during the initial ramp-up period of 4 years, first full ramp-up year commencing in 2021, the underground mine is expected to produce an average of approximately 1.8kt (4.0mmlb) per year of refined cobalt. When complete, the underground mine is expected to produce an average of 2.6kt (5.8mmlb) per year of refined cobalt. Nickel production from Voisey’s Bay mine will be maintained at 38kt per year from 2018 to 2020, ramping up to 45-50kt per year of nickel contained in concentrate from 2024 onwards.“

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The underground mine at Voisey’s Bay is a very positive development for Royal Gold and Altius. Cobalt production is expected to increase from 4 million pounds to 5.8 million pounds per annum, a 45% increase. Nickel production could increase up to 32%. (I assume copper production will also increase.)

Those are big production increases that cost Royal Gold and Altius nothing. Other people are paying for it.

Instead of the Voisey royalty yielding Altius C$3 million a year it could be yielding C$5 million or C$6 million in the future. Commodity price increases and production rate increases.
« Last Edit: June 12, 2018, 07:53:52 AM by linealdin »

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #5967 on: June 12, 2018, 08:34:01 AM »
When Altius agreed to buy the VB royalty in June 2003 the nickel price was $4. By the time the mine opened in 2005 the price was $8. Then in the next 3 years the nickel price went parabolic, spiking to over $22. Payback was quickly achieved. Pure contrarian play.

Wheaton and Cobalt 27 are spending US$690 million buying a stream after the parabolic spike already took pace. Cobalt was $10 in late 2015, now it is $38. Many companies are flooding into the cobalt space. It is a very hot commodity. Classic bull market mania.

These guys are going to get slaughtered. This isn’t hindsight.
« Last Edit: June 12, 2018, 08:37:58 AM by linealdin »

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #5968 on: June 12, 2018, 09:33:24 AM »
EMU is in a trading halt. I assume they are about to release results from their recent 5400 meter drill program at Vidalita. Earlier they claimed to have discovered a “substantial” high sulphidation epithermal gold/silver system based on visual inspection of the drill core. Now the assay results have to back up that claim.

mikek

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Re: ALS.TO - Altius Minerals
« Reply #5969 on: June 12, 2018, 09:35:19 AM »
I think VB today would be paying Altius 4-5 million. All those metals have jumped quite a bit. The back payment and going forward will be pretty nice I feel if Altius wins. I am of the opinion that they will get backpay but also I think Altius has a very good case that Vale has been underpaying for quite a bit. Vale has always bragged that they produce a premium product that gets a premium price. Why should Altius have barely been getting spot price all those years if everything Vale has said over the years is that they get above spot for their product due to the quality. Should be an interesting trial. The big selling point that Vale made before they bought VB is that they will get premium pricing for their product. This is all captured in the book about VB. They also continue to brag that they get a premium price. Why should we now believe that they can barely get spot for their product when every AR says they get premium pricing for their product. It doesn't line up.
« Last Edit: June 12, 2018, 09:45:02 AM by mikek »