Author Topic: ALS.TO - Altius Minerals  (Read 1484565 times)

linealdin

  • Hero Member
  • *****
  • Posts: 1862
Re: ALS.TO - Altius Minerals
« Reply #5980 on: June 14, 2018, 10:52:32 AM »
Tacora filed their IPO marketing presentation to SEDAR. Lots of good intel on the iron ore market.

1) Move to flat steel products, such as sheet and plate, reduces the acceptance for phosphorous.

2) Increasing demand for lower levels of silica and alumina to control the coke rate. (Less coke = less pollution.)

3) Silica levels from South Brazil have doubled since 2010. Alumina levels for Australian ore have been on an uptrend.

4) Supply of premium grade ore (65% plus) has decreased by 30 million tonnes since 2011. Supply of low grade and medium grade ore has risen by 368 million tonnes in same time frame. The premium ore will blend and upgrade the lower quality ore.

5) Tacora got US$80 million in debt financing (infrastructure financing and term loan) from SAF Metals & Mining Finance (option to take additional US$40 million from SAF). They got US$64 million in equipment financing from Komatsu and Caterpillar (option for additional US$9.5 million). They are trying to raise US$96 million in an IPO.
« Last Edit: June 14, 2018, 11:18:17 AM by linealdin »


linealdin

  • Hero Member
  • *****
  • Posts: 1862
Re: ALS.TO - Altius Minerals
« Reply #5981 on: June 14, 2018, 11:16:10 AM »
So Tacora, if successful, will raise US$290 million (including all options). About 29% of Kamiís US$999.4 million capex.

If you compare the Wabush and Kami projects Kami is more economic: much higher NPV, much lower operating costs, much lower royalty.

If Tacora can raise US$290 million why canít Kami raise US$500 million? The money is out there. SAF Metals & Mining Finance, which committed a big chunk of financing for Wabush, is just one private equity fund with deep pockets. There are many others. Komatsu and Caterpillar want to sell trucks to Alderon, too.

The key for Alderon is bringing up the steelmaker ownership of Kami on the project level from 25% to 50%. Let the steelmakers finance $500 million in capex with their Chinese banks, while Alderon sources another $500 million from private equity, banks, construction equipment companies, royalty companies, government funds, and a big public equity financing.

Itís doable.
« Last Edit: June 14, 2018, 11:21:01 AM by linealdin »

nostradamus

  • Sr. Member
  • ****
  • Posts: 260
Re: ALS.TO - Altius Minerals
« Reply #5982 on: June 15, 2018, 02:52:33 AM »

The key for Alderon is bringing up the steelmaker ownership of Kami on the project level from 25% to 50%. Let the steelmakers finance $500 million in capex with their Chinese banks, while Alderon sources another $500 million from private equity, banks, construction equipment companies, royalty companies, government funds, and a big public equity financing.

It’s doable.

But isn't all of the production already due to go Hebei and Glencore? If so, I don't see why another steelmaker would want to get involved.

(Champion up 8% to 1.48 AUD on the ASX.)

N.

linealdin

  • Hero Member
  • *****
  • Posts: 1862
Re: ALS.TO - Altius Minerals
« Reply #5983 on: June 15, 2018, 03:54:49 AM »

The key for Alderon is bringing up the steelmaker ownership of Kami on the project level from 25% to 50%. Let the steelmakers finance $500 million in capex with their Chinese banks, while Alderon sources another $500 million from private equity, banks, construction equipment companies, royalty companies, government funds, and a big public equity financing.

Itís doable.

But isn't all of the production already due to go Hebei and Glencore? If so, I don't see why another steelmaker would want to get involved.

(Champion up 8% to 1.48 AUD on the ASX.)

N.

Project ownership can be consciously uncoupled from offtake. None of the project owners of Bloom Lake Phase 1 have offtake rights. The 100% offtaker of the restart of Wabush, Cargill, has no project ownership. LIF owns 15% of IOC on project level but no offtake rights.

Separate interests.

nostradamus

  • Sr. Member
  • ****
  • Posts: 260
Re: ALS.TO - Altius Minerals
« Reply #5984 on: June 15, 2018, 04:15:08 AM »
I'm just trying to work out why a steelmaker (rather than any other type of investor) would want to finance an iron ore mine if it does not get the direct benefits of the iron produced by the mine. I guess they likely know more about likely future demand than the average investor and they stand to benefit indirectly by the additional supply of iron ore pushing down prices. But, would another steelmaker really want to help finance production that the know is going straight to Hebei and Glencore?

Sorry if these are dumb questions...

N.

linealdin

  • Hero Member
  • *****
  • Posts: 1862
Re: ALS.TO - Altius Minerals
« Reply #5985 on: June 15, 2018, 06:54:32 AM »
Alderon and Hebei tried to bring in another partner on the Kami project level in 2013:

https://www.steelonthenet.com/kb/history-hebei.html

They were unsuccessful in that search. But I think they will try again this cycle.

Hebei owns 60% of the offtake of the first 8 million tonnes. Glencore owns 40%.

Right now with no production those parties own 60% and 40% of nothing. If another steelmaker willing to make a large investment on the project level (and agree to finance their share of capex) can be found Iím sure all parties would be willing to give them a share of the off-take. Everybody wins if the mine is built.

The off take for a potential Phase 2 expansion can also be offered to new strategic partners.


linealdin

  • Hero Member
  • *****
  • Posts: 1862
Re: ALS.TO - Altius Minerals
« Reply #5986 on: June 15, 2018, 07:08:55 AM »
Example: Asian Steelmaker X decides it needs to secure a long term source of high quality, low deleterious element iron ore.

Steelmaker X offers US$75 million for a 25% stake in the Kami project. It promises to be responsible for securing its US$250 million portion of capex (just like Hebei). It also demands a 25% portion of Phase 1 offtake.

Hebeiís offtake rights would be reduced to 45%, while Glencoreís offtake would be reduced to 30%. Alderon compensates these parties for their Phase 1 reductions by offering each of them 25% of Phase 2 off-take.

Why would any if the existing stakeholders turn this deal down? Finding a 3rd partner greatly increases the chances Kami is actually built in this cycle.
« Last Edit: June 15, 2018, 07:10:31 AM by linealdin »

nostradamus

  • Sr. Member
  • ****
  • Posts: 260
Re: ALS.TO - Altius Minerals
« Reply #5987 on: June 15, 2018, 07:23:44 AM »
Makes sense. Thanks linealdin.

linealdin

  • Hero Member
  • *****
  • Posts: 1862
Re: ALS.TO - Altius Minerals
« Reply #5988 on: June 17, 2018, 05:35:10 PM »
http://www.allegiancecoal.com.au/irm/PDF/1399_0/UpdatedTenasProjectResourceStatementandPitModels

Allegiance significantly decreases strip ratio but increases the mineable amount of ore. Feasibility to be delivered soon for the Phase 1 small mine. Should be excellent economics.

linealdin

  • Hero Member
  • *****
  • Posts: 1862
Re: ALS.TO - Altius Minerals
« Reply #5989 on: June 18, 2018, 03:02:14 AM »
https://m.youtube.com/watch?v=dl7zz0ZPYxg&t=13s

New video showing the whole Bloom Lake operation. Impressive industrial operation. The second processing plant (70% complete) looks larger than the first plant. It wonít go unused for long.