Author Topic: ALS.TO - Altius Minerals  (Read 1375908 times)

bizaro86

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Re: ALS.TO - Altius Minerals
« Reply #6080 on: July 06, 2018, 01:33:49 PM »
"Maybe they make a bunch of money on the shares, but buying and holding junior mining shares for cash isn't the model I signed up for. That's been tried lots of times and doesn't work. If it becomes too big a piece I'll be out."

"P.S. No reason to worry Altius is going to invest more in Adventus in the near future. With the Wheaton private placement Adventus is cashed up through the end of 2019."

I don't think bizaro86 is worried about the initial seed capital but it does seem like Altius will continue to put capital in for future equity raises which is a crappy business model.  I think this is what Bizaro86 is talking about and I agree 100 percent.  Basically, Altius is investing in a junior to explore a property that they don't have a royalty on.  As of right now, the risk capital is very low but as time goes on and the equity raises get larger that isn't a attractive business model.  This is what Biazaro86 is concerned about.

IOC is going to be a huge winner, it's really too bad that management thinks they need to dilute that asset and buy other royalties.  That thing is a huge cash flow, expanding prices, production, quality is good and possibly huge expansion potential in the future if these trends are here to stay.

If Alderon is so good why couldn't Tacora raise a much smaller capex to get built?  I do believe the ore is good but no one is spending a billion dollars to get this built.  The only way Alderon ever gets built is if it gets bought by a producer that is near by or they try to start it out at a much smaller capex/ initial production.  That is there only hope, if the former CEO didn't drop the ball they would be sitting in a pretty good position.  Unfortunately, he did and the choices aren't very viable to get this thing built at current plans.


The thing that is attractive to me about Altius is the extremely long royalties, I call them basically forever assets-
Potash- 16 million
Chapada- 13 million (this is the real amount actually that they keep)
IOC- 7 million
VB- 4 million ( I consider this a forever asset once this gets settled, 15+ years in reserves and I would guess this is a bit more)

That is 40 million in forever assets with 43 million shares outstanding and 50 million if Fairfax converts, it isn't rocket science how you can see that you can possibly win with that.

I agree with you 100% on all of this. Buying shares in a royalty Co. (Callinan, IOC, etc) is an investment I really like. Getting free shares in a junior plus a royalty on a prospect I like. Putting in a bit of cash so the junior can use your reputation to raise more capital to explore your property I like a bit. You get the shares plus extra upside on the royalty.

Buying shares in a junior is a statistically terrible business. Unless there is some other source of upside, even if Dalton and Co are better than average I'd like to see that avoided. Just because you're smart doesn't mean you should pick something hard to do. Munger says to shoot fish in a barrel by first emptying the barrel of water. Royalties are shooting fish in an empty barrel, investing in juniors is like shooting fish in the ocean. It's very hard, so why do it. The bigger % of the value of ALS in that activity the less happy I am.

I agree about the long life assets as well. They are the cream assets here, and it isn't hard to justify a very high multiple on them, imo.


linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6081 on: July 06, 2018, 02:57:15 PM »
Current iron ore cape size shipping rates:

Sept-Iles to Europe: US$8 per tonne
Sept-Iles to Asia: US$24 per tonne
Brazil to Asia: US$18 per tonne
Western Australia to Asia: US$7 or US$8 per tonne

Significant incentive for Champion to make as many shipments as possible to Europe (as they did recently to Port Talbot, Wales, Port of Gibralter Spain and Rotterdam).

Trough ore as a preferred option of European steelmakers? Interesting.

The WA shipping advantage vs. Canada is about $16.50 a tonne. Exactly the amount of the alumina penalty advantage Canada has over WA.

Trough ore is competitive worldwide.
« Last Edit: July 06, 2018, 03:12:49 PM by linealdin »

bizaro86

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Re: ALS.TO - Altius Minerals
« Reply #6082 on: July 06, 2018, 03:30:36 PM »
Europe makes a lot of sense for trough ore for sure. There is a bit of European iron ore production (mainly Sweden) but they're net importers, and the  big iron ore producers (Brazil/Australia) are farther.

In a perfect world ALS facilitates the sale of Alderon to someone who can actually build a mine (IOC? Champion? Tata?) Kami getting built has been the dream around this stock for years. The difference of course is that a few years ago the market was paying up for that option, whereas now its basically free.

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6083 on: July 06, 2018, 04:44:08 PM »
Iron ore is the kindergarten of mining. Least complicated processing. No worries about complicated geological structures and underground ventilation or flooding risks. I have no doubt Eldem, given enough financing, can deliver a functional, modern mine on time and on budget. He is very experienced and it ain’t that hard, technically. The mine-building mistakes of Consolidated Thompson won’t be repeated.

Alderon CAN build the mine. The hard part is organizing the capital. I believe capital starts flowing towards Alderon over the next 18 months. The most sophisticated resource investors, private equity funds that spend big bucks on due diligence, will conclude Kami’s ore is the perfect ore to bring to the market.

bizaro86

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Re: ALS.TO - Altius Minerals
« Reply #6084 on: July 06, 2018, 05:20:16 PM »
I probably should have said "finance a mine"


linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6085 on: July 06, 2018, 10:39:09 PM »
http://www.kereport.com/wp-content/uploads/2018_05_01-Christian-Kargl-Simard-Adventus-Zinc.mp3

Interview with Adventus’s Kargl-Simard from early May to discuss the infill and Sesmo drill results:

1) Infill results are 3x the grade of the published El Domo resource. Potential for a 10% to 20% increase in grade when the next updated resource is delivered in Q1 2019, bringing the copper equivalency grade to 5% or 6%.  Kargl-Simard struggles to recall any base metals drill results this good over the last several years.

2) The Sesmo drill result shows Curipamba could be a gold district with multi-million ounce potential. The Sesmo first drill hole is from surface, 20 meters and excellent grade (6 g/t gold equivalent). If they can add tonnage this will be “pure cash.”

3) Geologists not sure what Curipamba as a district is yet. What is the feeder system? What does it mean that there’s very similar stockwork beneath both El Domo and Sesmo? How do the VMS lenses and the high grade precious metals mineralization tie together? Lots of work to be done but also lots of potential.

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6086 on: July 07, 2018, 05:05:34 AM »
Adventus total shares: 15,182,183

Free shares received in exchange for property: 7,570,014

Seed financing at 25 cents: ~4 million shares

IPO at 50 cents: ~500k shares

Capital raise at 88 cents: 3,068,182 shares

Cost basis per share: ~26 cents per share

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Participation in the Wheaton-led financing raises the cost basis a few cents, depending on how many shares they subscribe for.

Altius is allowing its share position to be diluted (slowly) as each financing is at a higher price. I think they started with 37% of the shares of Adventus. After Wheaton jumps in Altius’s equity stake could be down from the current 26.6% to 25%. This is careful, risk-averse behavior.

I doubt Altius will ever allow its cost basis in Adventus to rise above 40 cents per share. The low cost basis is their margin of safety.
« Last Edit: July 07, 2018, 07:33:22 AM by linealdin »

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6087 on: July 07, 2018, 10:38:46 AM »
Ideally the renewable energy royalties Altius is going to purchase in the next 6 months will enter the pantheon of “forever assets.” At least the size of the Voisey’s Bay royalty (otherwise too small to matter):  C$4 million or more annual revenue for the next 50 to 100 years.
« Last Edit: July 07, 2018, 10:56:32 AM by linealdin »

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6088 on: July 07, 2018, 01:33:46 PM »
https://www.wolfdenresources.com/wp-content/uploads/2018/06/Wolfden-AGM-June-26-2018final.pdf

Wolfden AGM presentation. 5700 meters drilled of planned 10,000 meter program. 22 holes so far. New targets generated by IP, EM, VTEM and soil surveys. All new targets will be drilled in coming months. They have about $3 million in cash currently according to management at the AGM. Should be just enough to finish the program.

All drill holes assays except for the latest 400 meter drill hole have been released. Resumption of drilling after a 2 month break to perform and process the geophysical surveys.
« Last Edit: July 07, 2018, 05:46:31 PM by linealdin »

mugwump

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Re: ALS.TO - Altius Minerals
« Reply #6089 on: July 09, 2018, 03:40:21 AM »