Author Topic: ALS.TO - Altius Minerals  (Read 1484142 times)

linealdin

  • Hero Member
  • *****
  • Posts: 1861
Re: ALS.TO - Altius Minerals
« Reply #6800 on: November 07, 2018, 06:27:36 PM »
IOC is enjoying above forecast third party haulage (Champion Iron rail fees). And IOC is trying to improve recoveries with a spiral improvement project and a reflux classifier project. I like incremental improvements. Q4 should be strong.


linealdin

  • Hero Member
  • *****
  • Posts: 1861
Re: ALS.TO - Altius Minerals
« Reply #6801 on: November 08, 2018, 02:14:25 AM »
Champion Iron files quarterlies in Canada. The operation looks robust in this price environment:

Net realized price per tonne of C$90.4 (after shipping costs).

Cash costs of C$45.2 per tonne. The net sales price is double the cost.

Phase 2 expansion to 15 MTA could begin construction in late 2019. I’m sure O’Keeffe has strategic investors lined up around the block to finance the modest initial capex (Phase 2 plant mostly constructed by Cliffs already).

Altius debenture matures at the end of December. Conversion likely.


linealdin

  • Hero Member
  • *****
  • Posts: 1861
Re: ALS.TO - Altius Minerals
« Reply #6802 on: November 08, 2018, 02:39:36 AM »
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.

1) Every Allegiance document, including the most recent filings, note that Altius has a 3% to 4.5% sliding scale royalty. This is a discrepency best explained by the existence of some kind of low cost option to purchase an additional 1.5% royalty?

2) Altius has sold some but not all of its original 5.8 million share Excelsior position. There’s lots of indirect evidence of that. Excelsior used to be one of the top 3 largest position in Altius’s PG portfolio, then suddenly it wasn’t. Excelsior has also removed Altius as a strategic shareholder from its presentations. I think Altius sold more than half the position when Excelsior ran into the $1.40’s. The remaining position could still be fairly classified as “substantial.”

3) C$8.4 million market value is for investments into “Lithium Royalty Corp or associated royalties.” The language is clear.

4) Westmoreland has agreed to a restructuring deal with its lenders which will move quickly through the Chapter 11 process. The cash flow positive Canadian assets are not part of the bankruptcy filings or debt restructuring agreement. No issues for Altius.

linealdin

  • Hero Member
  • *****
  • Posts: 1861
Re: ALS.TO - Altius Minerals
« Reply #6803 on: November 08, 2018, 03:22:38 AM »
Major cash outlays in Q3

C$8.7 million LIF purchase
C$2 million LRC associated royalty purchase
C$2.625 million Alderon debenture loan
C$2.65 million in buybacks
C$5 million debt principal payback
C$2.058 interest payment on longterm debt
C$1.26 million preferred share distribution
C$1.64 million in Altius dividends

Total of C$25.9 million. An expensive quarter. Altius will look to monetize some investments next quarter.

linealdin

  • Hero Member
  • *****
  • Posts: 1861
Re: ALS.TO - Altius Minerals
« Reply #6804 on: November 08, 2018, 04:03:37 AM »
Decent shot of C$20 million+ revenue in Q4 for Altius. Swing factors:

1) Does LIF hoard cash (hoping to convince shareholders to let it buy a copper royalty) or does it pay out the C$1 to C$1.15 per share in dividends it can pay based on the sky high pellet premiums? C$3.5 million to C$4 million at stake for Altius.

2) Yamana is guiding a huge production quarter for Chapada.

3) Potash in a rising price environment. Nutrien raising production at Rocanville.

4) Sheerness returning to higher rate royalty land.

5) General seasonality for the Altius portfolio. December quarter revenue is usually strong.

linealdin

  • Hero Member
  • *****
  • Posts: 1861
Re: ALS.TO - Altius Minerals
« Reply #6805 on: November 08, 2018, 05:31:53 AM »
http://altiusminerals.com/uploads/2018-11-07-Q3-Conf-call-presentation-FINAL.pdf

From the Q3 results presentation:

“Excelsior US$75 million project finance package recently announced, with a construction timeline and first copper production now in sight for our next producing copper royalty; Altius also has an option to purchase additional royalty exposure on this project, which it expects to exercise.”

linealdin

  • Hero Member
  • *****
  • Posts: 1861
Re: ALS.TO - Altius Minerals
« Reply #6806 on: November 08, 2018, 07:35:50 AM »
Market loves the LIF quarterly results. Broke through the C$30 barrier, and a morning high of C$31.32. Altius's LIF position worth C$109.62 million at today's high.

Investors getting in position for what's likely to be a $1 plus dividend in Q4.

One analyst, quoted in the Globe and Mail, believes LIF will deliver C$4 to C$4.50 in dividends over the next 4 quarters. LIF will be a $40 to $45 stock if that becomes reality. Major upside.

nostradamus

  • Sr. Member
  • ****
  • Posts: 260
Re: ALS.TO - Altius Minerals
« Reply #6807 on: November 08, 2018, 07:51:21 AM »
Anything interesting/new on the Q3 conference call today? (I didn't manage to sign in)

linealdin

  • Hero Member
  • *****
  • Posts: 1861
Re: ALS.TO - Altius Minerals
« Reply #6808 on: November 08, 2018, 08:30:36 AM »
The Aussie zinc/lead/silver projects, Broken Hill and Mount Isa, are now listed on the "Vended Projects" section of the Altius website. New farm-out deals set to close?

The Finnish gold and nickel projects have disappeared from the website. Abandoned or impaired? C$576,000 in exploration assets were written down in Q3.
« Last Edit: November 08, 2018, 09:03:41 AM by linealdin »

linealdin

  • Hero Member
  • *****
  • Posts: 1861
Re: ALS.TO - Altius Minerals
« Reply #6809 on: November 08, 2018, 11:04:01 AM »
http://altiusminerals.com/uploads/2018-11-07-Q3-Conf-call-presentation-FINAL.pdf

From the Q3 results presentation:

“Excelsior US$75 million project finance package recently announced, with a construction timeline and first copper production now in sight for our next producing copper royalty; Altius also has an option to purchase additional royalty exposure on this project, which it expects to exercise.”

If Excelsior can recover 2 billion pounds of copper over the life of the mine the additional 0.5% royalty will net Altius 10 million pounds of copper.

Cost of additional 0.5% royalty = C$5 million

Potential return: 10 million pounds x US$3 per pound x 1.3 USD/CAD = C$39 million.

I liked the cheaper royalty options that Altius turned down a couple of years ago: 0.5% royalty for C$3 million. But Excelsior was in a much more precarious situation in 2016.