Author Topic: ALS.TO - Altius Minerals  (Read 1592433 times)

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6910 on: December 24, 2018, 01:17:06 PM »
https://www.google.com/amp/s/mobile.reuters.com/article/amp/idUSL8N1YQ65Y

Rio Tinto doing a dual listing for its 58.7% stake in IOC. New York and Toronto in the first half of 2019.

Targeting a US$4 billion valuation for the IPO. At that valuation LIFís 15.1% equity stake is worth US$1.03 billion, or C$1.4 billion at current exchange rates. A little less than LIFís current market cap of C$1.57 bilion.

Aug-2018 the IOC thought it could get USD 6 billion, 4 months later its USD 4 billion?
http://www.mining.com/rio-tinto-closer-selling-6bn-stake-iron-ore-canada/

IOC will need to sell at least 25% (USD 1 billion) to meet float and new investor requirements, and all existing partners will have the opportunity to sell proportionately. At 25% Mitsubushi's stake would decline to 19%+, essentially setting the limit on what the new buyer could purchase. Mitsubushi would also receive USD 262 million of the sale proceeds.

Then imagine what might occurr if Mitsubushi and Glencore (Kami) exchanged places.
Merry Christmas.

SD

Iím not sure Mitsubishi or LIF have any involvement in the IPO. Rio Tinto is injecting its whole stake in IOC (58.7%) into a public listing. The public vehicle would presumably pay dividends to its investors from its share of IOC profits (considerable the last couple of years).

LIF theoretically could inject its 15.1% IOC equity stake into the vehicle as well but thatís a matter of negotiation. If LIF even wants a part of this public vehicle.


SharperDingaan

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Re: ALS.TO - Altius Minerals
« Reply #6911 on: December 24, 2018, 02:02:54 PM »
https://www.google.com/amp/s/mobile.reuters.com/article/amp/idUSL8N1YQ65Y

Rio Tinto doing a dual listing for its 58.7% stake in IOC. New York and Toronto in the first half of 2019.

Targeting a US$4 billion valuation for the IPO. At that valuation LIFís 15.1% equity stake is worth US$1.03 billion, or C$1.4 billion at current exchange rates. A little less than LIFís current market cap of C$1.57 bilion.

Aug-2018 the IOC thought it could get USD 6 billion, 4 months later its USD 4 billion?
http://www.mining.com/rio-tinto-closer-selling-6bn-stake-iron-ore-canada/

IOC will need to sell at least 25% (USD 1 billion) to meet float and new investor requirements, and all existing partners will have the opportunity to sell proportionately. At 25% Mitsubushi's stake would decline to 19%+, essentially setting the limit on what the new buyer could purchase. Mitsubushi would also receive USD 262 million of the sale proceeds.

Then imagine what might occurr if Mitsubushi and Glencore (Kami) exchanged places.
Merry Christmas.

SD

Iím not sure Mitsubishi or LIF have any involvement in the IPO. Rio Tinto is injecting its whole stake in IOC (58.7%) into a public listing. The public vehicle would presumably pay dividends to its investors from its share of IOC profits (considerable the last couple of years).

LIF theoretically could inject its 15.1% IOC equity stake into the vehicle as well but thatís a matter of negotiation. If LIF even wants a part of this public vehicle.

IOC is a partnership trying for a liquidity 'event'; all partners will have the right to participate in the 'event' proportionately.
Mitsubishi and LIF could choose not to participate in the IPO (allowing RTZ to sell more of its stake for cash); or choose to participate via a non-cash 'equity swap' with a 3rd party at the prevailing market price.

SD



linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6912 on: December 24, 2018, 03:27:09 PM »
https://www.google.com/amp/s/mobile.reuters.com/article/amp/idUSL8N1YQ65Y

Rio Tinto doing a dual listing for its 58.7% stake in IOC. New York and Toronto in the first half of 2019.

Targeting a US$4 billion valuation for the IPO. At that valuation LIFís 15.1% equity stake is worth US$1.03 billion, or C$1.4 billion at current exchange rates. A little less than LIFís current market cap of C$1.57 bilion.

Aug-2018 the IOC thought it could get USD 6 billion, 4 months later its USD 4 billion?
http://www.mining.com/rio-tinto-closer-selling-6bn-stake-iron-ore-canada/

IOC will need to sell at least 25% (USD 1 billion) to meet float and new investor requirements, and all existing partners will have the opportunity to sell proportionately. At 25% Mitsubushi's stake would decline to 19%+, essentially setting the limit on what the new buyer could purchase. Mitsubushi would also receive USD 262 million of the sale proceeds.

Then imagine what might occurr if Mitsubushi and Glencore (Kami) exchanged places.
Merry Christmas.

SD

Iím not sure Mitsubishi or LIF have any involvement in the IPO. Rio Tinto is injecting its whole stake in IOC (58.7%) into a public listing. The public vehicle would presumably pay dividends to its investors from its share of IOC profits (considerable the last couple of years).

LIF theoretically could inject its 15.1% IOC equity stake into the vehicle as well but thatís a matter of negotiation. If LIF even wants a part of this public vehicle.

IOC is a partnership trying for a liquidity 'event'; all partners will have the right to participate in the 'event' proportionately.
Mitsubishi and LIF could choose not to participate in the IPO (allowing RTZ to sell more of its stake for cash); or choose to participate via a non-cash 'equity swap' with a 3rd party at the prevailing market price.

SD

All that would be true if IOC were going public. I donít think thatís what is happening. LIFís 15.1% equity stake is already trading in a public vehicle (LIF on the TSX). Now Rio Tinto is attempting to replicate what LIF has done. But they will get a higher valuation because they own the majority control stake.

IOC stays private.

John Hjorth

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Re: ALS.TO - Altius Minerals
« Reply #6913 on: December 24, 2018, 03:32:32 PM »
Merry Christmas, linealdin!
ĒIn the race of excellence Ö there is no finish line.Ē
-HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6914 on: December 24, 2018, 05:34:35 PM »
Merry Christmas, linealdin!

Cheers to you!

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6915 on: December 24, 2018, 05:38:57 PM »
Rio Tinto received US$249 million in dividends in Q3 and Q4 from its 58.7% IOC equity position. So US$400 million in dividends is certainly possible over a year.

Does a US$400 million annual dividend justify a US$4 billion market cap for a publicly listed vehicle? Maybe so.

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6916 on: December 25, 2018, 03:11:49 AM »
http://statements.qld.gov.au/Statement/2018/12/5/exploration-grants-say-head-north

Altius wins an A$300K grant to cover 75% of its exploration costs at two of its Mount Isa silver/zinc/lead exploration projects. The grant will pay for geophysics at Min Min and drilling at Brumby. Work must be completed by August 2019 to receive the full A$300K.

Great exploration jurisdiction. Government pays for most of the cost of early stage exploration.

no_free_lunch

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Re: ALS.TO - Altius Minerals
« Reply #6917 on: December 25, 2018, 08:18:21 AM »
2018 royalty revenue should come in around C$68 million, in the upper range of guidance of C$64 million to C$69 million. LIF strike and cash hoarding cost Altius C$3 million or so.

2019 should see growth to C$80.2 million in royalty revenue. My estimates:

Chapada: C$18.5 million (new recovery circuit improvement kicking in H2 2019).
777 mine: C$10 million.
LIF: C$12.25 million (3.5 million shares x C$3.50 in annual dividends; the C$85 million LIF cash hoard is reduced to normal historical levels in 2019).
Potash: C$20 million
Electrical coal: C$13 million
Cheviot: C$3.5 million
Voiseyís Bay: C$1.5 million
Coal bed methane: C$600K
Interest and investment: C$500K
Excelsior: C$365K (1 quarter of revenue).


Thanks for putting this out there.  My question is, doesn't $450 market cap seem a lot for $80m in royalties?   What net profit margin do you see?

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6918 on: December 25, 2018, 12:40:35 PM »
2018 royalty revenue should come in around C$68 million, in the upper range of guidance of C$64 million to C$69 million. LIF strike and cash hoarding cost Altius C$3 million or so.

2019 should see growth to C$80.2 million in royalty revenue. My estimates:

Chapada: C$18.5 million (new recovery circuit improvement kicking in H2 2019).
777 mine: C$10 million.
LIF: C$12.25 million (3.5 million shares x C$3.50 in annual dividends; the C$85 million LIF cash hoard is reduced to normal historical levels in 2019).
Potash: C$20 million
Electrical coal: C$13 million
Cheviot: C$3.5 million
Voiseyís Bay: C$1.5 million
Coal bed methane: C$600K
Interest and investment: C$500K
Excelsior: C$365K (1 quarter of revenue).


Thanks for putting this out there.  My question is, doesn't $450 market cap seem a lot for $80m in royalties?   What net profit margin do you see?

I benchmark against all the royalty/stream companies. Altiusís market cap divided by projected annual royalty is an extraordinarily low multiple against those peers. If you think Altius is expensive then Franco Nevadaís multiple will make your head explode.

Altius EBITDA margin was 81% last quarter. That should improve as more low cost royalties (Excelsior for example) are added.

linealdin

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Re: ALS.TO - Altius Minerals
« Reply #6919 on: December 26, 2018, 02:57:41 AM »
The great benefit of Rio Tinto dual listing its IOC stake: likely production expansion.

Investors in the public vehicle are going to demand an aggressive growth story at IOC. As owners of the control majority stake they can push for an expansion from 23 MTA to 30 MTA and beyond.

LIF would benefit from that expansion (higher royalties) while taking little of the capital risk.