Author Topic: ALS.TO - Altius Minerals  (Read 1484523 times)

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6790 on: November 07, 2018, 11:00:05 AM »
https://www.youtube.com/watch?v=ZwEfM8CS1F4

Brent Cook presentation at the Gold and Silver summit:

1) Very down on Sokoman Iron's Moosehead project (Altius 2% royalty). Not enough continuity of mineralization, too many drill holes already, don't get fooled by the "discovery" hole.

2) Very bullish on Evrim's Cuale (Altius 1.5% royalty). Deposit becomes interesting if they can establish 1 million gold ounces at 1 g/t gold. Very interesting if 2 million ounces can be established. Could be a low capex, profitable deposit because of easy access, low strip ratio, open pit, and favorable metallurgy and recoveries. Low cost heap leach.

Cook said at the conference that Evrim is now his largest personal stock position.

I went and looked up the 2000 annual report (oldest on Sedar) as I was going to weigh in on your discussion with Liberty about how their returns have been full-cycle. Incidentally, the CAGR of their book value (same metric WEB used to use) has been very good over the life of the company. Largely from prospect generation gains though, not big gains on purchased royalties...

Anyway, it struck me that Moosehead was their biggest (by spend) prospect even then. They had just got it back from someone, and had had it for awhile already. If 20+ years isn't enough to find a mine somewhere, I think it's worth considering the possibility that there isn't a mine there to be found. I hope they're selling some Sokoman, but based on past experience (Alderon no share sale durin huge run up debacle) I doubt it. In my opinion this is management's biggest weakness, not taking some money off the table when things are looking up.

Paladin is their biggest win, and that wasn't their choice to sell it was a takeout. If they sold down some of these equity positions on rumours and drill results they would be better off, imo. There is still the chance for a big win from the retained royalty, and you get a slug of high-profit cash now to reinvest. Maybe sell in tranches if the fear of missing the big strike is too much...

Regarding Aurora uranium it was definitely Altius's choice to sell. Go back to the news from 2006.

Right after the Aurora IPO in March 2006 Altius did a secondary offering of some of its shares getting them C$38.5 million. Then it September Altius announced sales of Aurora shares yielding them C$31 million. November they announced another C$33.3 million in sales.

They sold Aurora relentlessly into a truly crazy bull market for uranium. That's how they got most of the C$200 million plus. The takeout of Aurora happened later.

Altius has taken plenty of money off the table when their investments have run up. I can give many examples. Alderon was the exception to the rule, and ended up being a C$100 million mistake.

And the reasoning for the Alderon non-sale was credible. Altius decided not to sell any shares because Alderon was going around to banks trying to raise C$1.2 billion in capex. It would have sabotaged the financing process.



linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6791 on: November 07, 2018, 11:15:55 AM »
You'll see in the financial statements released tonight: Altius is continually selling shares.

C$2.387 million in equity sales in the six months ended June, 2018.
C$7.723 million in equity sales in the 8 months ended December, 2017.
C$12.726 million in equity sales in the year ended April, 2017.
C$7.972 million in equity sales in the year ended April, 2016.
C$43.852 million in equity sales in the year ended April, 2015.

They are patient with their project generation portfolio but all of it will eventually be monetized for hard cash.


linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6792 on: November 07, 2018, 11:26:26 AM »
The project generation portfolio has more potential for sudden, spectacular gains than the royalty portfolio, of course.

If Cuale and Curipamba are what I think they are Altius is going to be collecting big chunks of cash in takeouts by majors. C$50 million to C$100 million for each deal. Adia Resources also has great potential to be taken over by a diamond major.

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6793 on: November 07, 2018, 11:37:24 AM »
Nutrien's sales volumes were way up in Q3. 3.858 million tonnes in Q3 versus 3.179 million tonnes in Q2 2018. Realized sale price per tonne was only 5.5% higher than Q2.

I think basically Nutrien is still working through sales contracts it signed last year when potash spot prices were much lower. Once those are finished at the end of this year then 2019 should see realized prices that are 25% higher.

That's the price bump which will take Altius from C$16 million+ in annual potash revenue to C$20 million+ in potash revenue in 2019.

Nutrien permanently decommissioned its New Brunswick potash facilities (where Altius had no royalty land). Future production increases will all be in Saskatchewan on Altius royalty land, heavily focused on production increases at Rocanville, the lowest cost producer on the planet.

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6794 on: November 07, 2018, 12:25:57 PM »
Tidbits from the Kami feasibility study filed on SEDAR:

"The NL EA Release is valid only by annual extension until January 2020. By this date, the Kami LP must start construction or risk the requirement for a new assessment. There is no legislated deadline for the start of construction with respect to the Federal EA Release."

*

"Under the terms of the Glencore off-take agreement, Glencore will be obligated to purchase, upon the commencement of commercial production, 40% of the actual annual production from the Kami Project up to a maximum of 3.2 million tonnes of the first 8.0 million tonnes of iron ore concentrate produced annually at the Kami Project. The term of the agreement will continue until the Kami LP has delivered 48.0 million tonnes of iron ore concentrate to Glencore, which is expected to be 15 years after the commencement of commercial production."

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6795 on: November 07, 2018, 12:39:57 PM »
Current Alderon management will get one more shot to raise construction financing over the next 14 months. If they fail there will be consequences. Sprott and Altius can call in their US$14 million loan due on December 31st, 2019, force a management change, then broker some kind of sale of the Kami deposit to HBIS or any of the iron ore producers in the region.

Kami can't stay on the shelf for another cycle because its provincial environmental permits will expire. The province may grant extensions but they are not indefinite extensions.

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6796 on: November 07, 2018, 02:00:47 PM »
http://altiusminerals.com/uploads/2018-11-07-Altius-Reports-Q3-2018-Royalty-Revenue-of-17-1M-and-Adjusted-EBITDA-OF-13_-9M-FINAL_.pdf

Altius reports total Q3 revenue of C$17.634 million. Final numbers better than preliminary estimates, as usual.

Liberty

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Re: ALS.TO - Altius Minerals
« Reply #6797 on: November 07, 2018, 04:54:30 PM »
Quote
Altius Minerals Corporation (“Altius” or the “Corporation”) reports attributable royalty revenue(Note 1) of $17.1 million ($0.40 per share) for the quarter ended September 30, 2018 compared to $16.5 million ($0.38 per share) in the previous quarter and $17.9 million ($0.42 per share) in the comparable prior year quarter ended October 31, 2017. Total Q3 2018 revenue of $17.6 million includes project generation based revenue of approximately $0.5 million.

Adjusted EBITDA(Note 1) of $13.9 million ($0.32 per share) for the three months compares to $13.0 million ($0.30 per share) in Q2 2018 and $14.6 million ($0.34 per share) for the three months ended October 31, 2017. Q3 2018 net earnings per share were $0.14 compared to $0.12 in Q2 2018 and $0.16 in the comparable quarter last year. Q3 2018 earnings include a non-cash $2.0 million dilution gain (approximately 4.7 cents per share) related to the Adventus Zinc Corporation private placement financing and another issuance of shares for an exploration alliance.

Revenues and EBITDA basically flat year-on-year (down a little actually).
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mikek

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Re: ALS.TO - Altius Minerals
« Reply #6798 on: November 07, 2018, 05:11:50 PM »
Some thoughts on that quarter...

Maybe Altius only has 1.5 to 3% royalty on Allegiance now.  I thought they had the option to increase it 1.5% more but I'm not so sure anymore.  It seems they would mention it if they did.  The first document regarding that deal was this document.  It leads me to believe that they only have 1.5 to 3% sliding scale if they aren't mentioning it.  If anyone gets any clarification on that question I would like to know.

https://www.asx.com.au/asxpdf/20160916/pdf/43b7b388g7fwzr.pdf

"Altius is a substantial Excelsior shareholder"

Looks like Altius owns shares of Excelsior, I thought they might have sold them by now but it looks like they still have them.

"During the quarter ended September 30, 2018 the Corporation invested an additional $2 million into Lithium Royalty Corporation (“LRC”) for a total investment to date of $8.4 million. As a founding investor and as consideration for providing ongoing technical support, the Corporation received the right to participate directly in LRC royalty acquisitions on a 10% basis. One such co-investment has been made thus far, the details of which will be disclosed once disclosed by LRC."

I wonder if that 2 million was part of the co-investment or if the co-investment was separate.  Cash has declined quite a bit from last quarter.  8.7 million to LIF royalty, 2.6 million to Alderon for the loan and 2 million on LRC.  Seems like they might have done some other things since cash went from 52 million last quarter to 33 million now.

"Adia is planning an initial drilling campaign during Q1 2019."

"On October 9, 2018 Westmoreland Coal Company (“Westmoreland”) announced it has entered into a restructuring support agreement with members of an ad hoc group of lenders and filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code in the US Bankruptcy Court. Westmoreland’s Canadian entities (Westmoreland Canada) are excluded from these voluntary petitions, and their operations are currently unaffected by the U.S. actions.

Prairie Royalties Limited Partnerships (“Prairie Royalties LP”) holds certain royalties in which Westmoreland Canada is the operator, some of which are paid through Westmoreland Canada rather than being paid directly through the utility. While the Corporation has not experienced any collection issues with Westmoreland Canada to date and there are no past due payments, the Corporation is taking steps to further protect its interests and will continue to monitor the situation."

That could possibly be concerning, not an issue right now but you never know.

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6799 on: November 07, 2018, 06:11:42 PM »
http://www.labradorironore.com/News-Releases/Press-Release-Details/2018/Labrador-Iron-Ore-Royalty-Corporation-Announces-Results-for-the-Third-Quarter-Ended-September-30-2018/default.aspx

LIF Q3 results. The special meeting to vote on permission to buy royalties has been cancelled for now. I doubt major shareholders like Altius and Anglo Pacific want to create a new competitor for royalties.

Building a huge cash position. Should be C$62 million cash position after Q3 dividends are paid. Normalizing to a C$40 million cash position leaves an extra C$22 million to pay out as dividends.

I expect at least a $1 dividend in Q4, worth C$3.5 million to Altius. Could be higher.