Author Topic: ALS.TO - Altius Minerals  (Read 1402205 times)

petec

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Re: ALS.TO - Altius Minerals
« Reply #6330 on: August 10, 2018, 10:04:24 AM »
I think that 15% equity could be assigned a value approaching C$1 billion in a successful public listing.

That would value Rio's stake at $3.9bn. If they couldn't sell a control stake for $3.5-4bn, why do you think minorities investing via the stock market would value it that high?


linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6331 on: August 10, 2018, 10:53:35 AM »
I think that 15% equity could be assigned a value approaching C$1 billion in a successful public listing.

That would value Rio's stake at $3.9bn. If they couldn't sell a control stake for $3.5-4bn, why do you think minorities investing via the stock market would value it that high?

USD to CAD conversion. Sales price was US$3.5 billion. No one bit.

This sales process was in late 2013, early 2014 with the iron ore price dropping precipitously with no countervailing quality or low alumina price premiums for Trough ore.

I believe IOC is better situated now than it was in 2014. IOC EBITDA has been robust in recent non-strike quarters. See Rio Tinto financials.

petec

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Re: ALS.TO - Altius Minerals
« Reply #6332 on: August 10, 2018, 11:17:36 AM »
Second time Iíve made that mistake!

hohi

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Re: ALS.TO - Altius Minerals
« Reply #6333 on: August 10, 2018, 11:03:17 PM »
Hey there, long time I didn't post anything, but I am still a very hungry reader. Thanks for the great work and keep the info coming... I listened to the CC and as always wrote done some notes, so I'll post them here, maybe someone benefits (starts after Financials):

Overview
first quarter where higher VOLUMES instead of PRICES moved the needle
→ proof of option potential!

Chapada
ahead of schedule
improved metal recovery
exploration success → ALS believes itís a district, not just a mine

777
decline in Cu/Zn mined
Hudbay indicated an extra year to 2021; potentially further mine life extentions

Voiseyís
Vale did streaming deal → project will go ahead
another 15 years of prodín
royalty hasnít paid for a while; court hearing in 1 month

Potash
first quarter of full royalties
Mosaic / Nutrien both talked about pos. future; incentive prices etc.

Cheviot
Teck studies extending mine to 2029

IOC, Champion / Through projects
9 weeks of strike had an even bigger impact as premiums widened further
IOCs products are the best in the world; lowest impurities
premium spread widens
Champion had excellent results → good for debenture, but even better for other TROUGH projects, e.g. KAMI
in Q & A: ALS watches iron ore very closely for 20 years
Re-Start of Bloom Lake very important (Teck lost A LOT OF money)
now champion scaled back, less frantic operation
Profound impact on Alderon if Bloom Lake is successful
high iron ore content, but recently more important LESS Alumina
Geothite Bay: not lot of activity, no development planned; Wabush 3 first, in the VERY LONG RUN Geothite Bay is expected to be mined; they pretty much defined a deposit Ö

Junior Resource Market
better deal flow → broader market is almost no-existent at this point
expect to close on some deals
put $7M into lithium royalty for 12% equity of private company, 1 board seat
→ signed 1 royalty deal, expect to sign another one soon
→ Management of Lithium Royalty are experts in lithium


RENEWABLES - BLUE SKY
discussions underway with counterparts
ALS thinks about funnelling coal into renewables
in Q & A: no fixed timeline; new model, have to educate operators about royalty model; lots of term sheets flying around; think this can become a real business;
partners have a couple of small royalties in their portfolio; they donít move the needle, hundred of thousands instead of millionsÖ
partners will do on-the-ground work

Exploration
hunger for properties is highest in ALS history, something one would not expect when looking at the Junior indices
27 positions in junior equity portfolio
excellent results from some, especially
El Domo (Adventus), in-fill drilling
Moosehead (Sokoman), discovery hole
In Q & A: Bitterroot: have lands extention to Lundinís EAGLE mine → its for the Nickel Market; they wait until the nickel market turns
Ireland: Project with First Quantum is for a new type of copper deposit that hasnít been found/mine before there, more conceptual, early exploration...
Cheers,
hohi.

current resource positions: ALS.TO  //  NILSY  //  IVN.TO   //   DPM.TO   //   GAZ

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6334 on: August 13, 2018, 02:30:11 AM »
http://m.miningweekly.com/article/red-5-divests-of-mt-cattlin-royalty-2018-06-18/rep_id:3861

Lithium Royalty Corpís first royalty purchase deal was signed in June. A$11 million for a A$1.50 per tonne royalty per tonne of ore processed (not per tonne of lithium actually produced or sold) at the Mt. Cattlin lithium mine in Australia. Red 5 Limited owned the royalty; Galaxy Resources is the miner. Traditional open pit hard rock operation. 1.6 million tonnes annual processing capacity.

At the beginning at 2018 there was 19.2 million tonnes of total resources, including surface stockpiles. About 12 years of mine life remaining at current production rates.

1.6 million tonnes of ore processed x A$1.50 per tonne royalty = A$2.4 million. A$2.4 million in annual royalty revenue x 12 years = A$28.8 million.

I assume thereís potential for further mine life extensions. Thatís the juice.

*

Altius paid C$7 million for 12% of the equity of Lithium Royalty Corp, and 10% direct participation rights on royalty purchases. On the Mt. Cattlin deal Altius would be paying A$1.1 million for A$240,000 in annual royalty revenue for the next 12 years. I will confirm the terms with Altius.

No exposure to the ups and downs of the lithium price. The A$1.50 per tonne is a kind of tolling fee per tonne of ore processed. The lithium market just has to be healthy enough to keep the mine in operation for as long as possible.
« Last Edit: August 13, 2018, 03:38:32 AM by linealdin »

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6335 on: August 13, 2018, 02:59:22 AM »
https://www.asx.com.au/asxpdf/20180323/pdf/43snt32ncn2262.pdf

This is Galaxy Resourcesís latest reserve and resources statement for Mt. Cattlin. 19.28 million tonnes of total resources. It is based upon a year of operation and 10,000 plus meters of RC drilling they did last year.

Galaxy recently completed another 15,000 meters of drilling (results not yet announced), and plans a Phase 2 brownfields drilling program of another 15,000 meters. A regional greenfield exploration program (targets in close proximity to existing operations) of 60,000 meters is planned for the next 2 years.

The resources will grow with all that drilling. The excitement for Lithium Royalty Corp and Altius is seeing how much upside there can be. More mine life + recently announced plans by Galaxy to increase production capacity.

Counterparty strength is pretty good. Galaxy has an A$1.1 billion market cap on the ASX. Certainly not a major but also not a risky microcap resource junior. Galaxy could be classified as a mid-tier producer.
« Last Edit: August 13, 2018, 03:19:59 AM by linealdin »

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6336 on: August 13, 2018, 03:29:01 AM »
The Mt. Cattlin royalty deal is solid enough I wish Altius bought the whole thing.

Why give Wolfden Resources $11 million for exploration when you can pay $11 million for a nice producing royalty?

(Of course LRC likely did the legwork, due diligence and negotiations to secure the deal. Altius is getting a portion of the royalty without committing the time of its employees.)

Once LRC gains enough weight by making accretive royalty deals the gameplan will likely be a listing of a pure play lithium royalty company on the TSX, taking advantage of a hot market for lithium. Hopefully Altius has a chance to monetize its C$7 million seed equity position for many times its original investment. It can be good to get in early.
« Last Edit: August 13, 2018, 03:36:21 AM by linealdin »

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6337 on: August 13, 2018, 04:22:24 AM »
From First Majestic Silverís MD&A filed today:

ďEvrim has improperly refused to give effect to the exercise of the option and the Company has therefore commenced arbitration proceedings against Evrim during the first quarter of 2018. Evrim and First Majestic are currently in negotiations for a settlement, which is expected to be reached by the third quarter of 2018.Ē

Evrim has a discovery at Ermitano that was optioned by First Majestic. The ore can feed into First Majesticís Santa Elena processing facility. Near-term  royalty income for Evrim, and possibly more depending on the terms of the settlement. I expect First Majestic to pony up a million or two in cash to Evrim.

petec

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Re: ALS.TO - Altius Minerals
« Reply #6338 on: August 13, 2018, 05:29:46 AM »
The resources will grow with all that drilling.

How confident are you that the royalty will cover the new resources?

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6339 on: August 13, 2018, 06:31:21 AM »
The resources will grow with all that drilling.

How confident are you that the royalty will cover the new resources?

The 40k meters of brownfield drilling are in the current operating mine area. Expansion and upgrading of reserves and resources on LRC/Altius royalty land. 100% certainty.

As for the 60k meters of greenfield drilling? Who knows? Depends on on how far afield they roam. But most of the targets seem to be near mine, so likely royalty land.
« Last Edit: August 13, 2018, 06:33:23 AM by linealdin »