Author Topic: ALS.TO - Altius Minerals  (Read 1762432 times)

ItsAValueTrap

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Re: ALS.TO - Altius Minerals
« Reply #840 on: October 11, 2012, 02:49:25 PM »
Well there's always risk in developing mines.  A fraction of promising projects won't make it into production.  And of those that do start producing, a small number of them will actually fail within a few years because it turns out some of their assumptions were wrong.

I think that Altius is assuming that there is a chance that Alderon won't make it into production.  Alderon is more marginal than some of its peers as its ore has elevated levels of manganese.

2- A high discount rate could explain part of it.  The $172M is for both the Voisey's Bay royalty *and* the Alderon iron ore royalty.  If the Voisey's Bay royalty is worth $40M ($4m/yr times 10), then the Kami royalty is worth $132M.  This could imply that the Alderon project has a 50/50 chance of making it into production.  $55M times 10 times a 50% chance of going into production = $275M.  If you discount that to the present then it could be around $132M depending on your discount rate and when you think the project will go into production.
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Ross812

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Re: ALS.TO - Altius Minerals
« Reply #841 on: October 11, 2012, 04:43:36 PM »
55 million a year to altius at a 3% royalty implies alderon will mine 16 million tonnes at $120 a ton (including the 5% discount for hebei). 55 million a year could not possibly happen for altius until 2017-18. I think Altius is valueing alderon at roughly 130 million which implies 13 million a year give or take. This is in line with my conservative estimate. the dividend should be about .50. Sorry for the punctualtion. Im typing on a tablet.

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Dazel

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Re: ALS.TO - Altius Minerals
« Reply #842 on: October 12, 2012, 06:31:20 AM »


Thanks for the posts.
We agree with most all that has been posted...

Altius are extremely conservative. So I would judge their internal number for royalties the same way you look at the way they have held their huge cash position. They are seasoned and have proven them selves time and again. That is why there is no mention of the cmb royalty. Their conservative royalty number still takes them over $16 a share.


There is dirt cheap capital available to those with scale who are buyers of royalties. That is why Altius has not purchased any...simple....price. Royalties are being priced at massive premiums...

So...Our question to you then is what is Altius worth to someone else in the royalty business?

Dazel.

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ItsAValueTrap

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Re: ALS.TO - Altius Minerals
« Reply #843 on: October 12, 2012, 02:02:16 PM »
LIF.UN and Mesabi iron ore trust are publicly traded royalty companies.

LIF.UN has most of its NAV in a royalty on IOC's mine, but it also owns an equity stake in IOC (which has assets in its mines and railroad).  As more companies use that railroad, IOC will receive a little more in fees.  (Unfortunately I haven't crunched the numbers of that railroad revenue.)
LIF.UN has a PE of around 12.8.

Mesabi iron ore trust is overpriced and the borrow is ridiculously expensive AFAIK.

Other royalty companies own a mix of gold, silver, and other metals. 
Anglo Pacific
Silver Wheaton
The various Sandstorm companies are royalty-esque
Franco-Nevada
Premier Gold will IPO a royalty company soon (because some people overpay for royalties)

I think that overvaluation exists for many of those companies since:
A- Many mining companies are overpriced.  The royalty companies, in comparison, look fairly priced.
B- Many mining companies and royalty companies regularly raise capital, so there is are elements of a pyramid scheme going on.  It's like tulips, real estate, telecom companies, Dot-Coms, social networking, etc.

I'd also point out that there's a big difference between iron ore valuations and gold valuations.  The iron ore miners trade at very low multiples.  CLF has a PE of 4, Goldcorp 26.  There are fears that the iron ore market may crash (which makes sense because iron ore production has gone up several times over the past few years).  There are also a lot of folks trying to short China in general (which is not in an obvious bubble), or trying to short Chinese real estate (which is in an obvious bubble).
Gold is hot right now, iron ore is not.

Personally I don't see the overvaluation in gold miners and royalties lasting for long.   The public markets are far better than our governments at printing paper.  There are no supply constraints for the equities.  There *are* supply constraints for physical gold... we haven't increased production in the past decade despite the skyrocketing price.  Similarly there are supply constraints for the mines.

Quote
So...Our question to you then is what is Altius worth to someone else in the royalty business?
Not that much?  Iron ore != gold or silver.
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beerbaron

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Re: ALS.TO - Altius Minerals
« Reply #844 on: October 12, 2012, 02:14:02 PM »
Quote
So...Our question to you then is what is Altius worth to someone else in the royalty business?
Not that much?  Iron ore != gold or silver.

Someone went to it's C++ classes...

BeerBaron

ItsAValueTrap

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Re: ALS.TO - Altius Minerals
« Reply #845 on: October 12, 2012, 02:20:35 PM »
Hey I preach inequality!  :P
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Dazel

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Re: ALS.TO - Altius Minerals
« Reply #846 on: October 14, 2012, 03:58:16 PM »


Once again...

The bulk of the valuation on royal gold is Voisey's bay it's largest royalty...at a 50 plus PE....even though it is a gold co...

As we all know Altius owns the same royalty and when uranium comes out of it's free fall....you have another world class asset at Paladin's Michelin project.

The world is looking for yield...they do not care how they get it.

Dazel.

nostradamus

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Re: ALS.TO - Altius Minerals
« Reply #847 on: October 16, 2012, 04:37:11 AM »
http://member.afraccess.com/media?id=CMN://6A608326&filename=20121016/PDN_01343711.pdf

Includes some further information on the Michelin project (pasted below):

AURORA MICHELIN URANIUM PROJECT, Canada

Drilling started at Michelin in late August. Two diamond core rigs are now operating on site and have completed 19 diamond holes incorporating 3,200m of core.

Initial infill drilling at Michelin intersected uranium mineralisation as expected. Detailed widths and grades will be reported after assays have been received and downhole gramma logs validated.

Ground geophysical surveys, geological mapping and prospecting were undertaken along the Michelin trend east and west of the main mineralised zone as well as the sub-parallel Rainbow trend, to the south and west all within 5km of the Michelin deposit. Early results show numerous uranium anomalies along this trend offering targets for future scout drilling. At this stage four scout drill holes have been completed at Running Rabbit Lake. All holes intersected some uranium mineralisation. Detailed results are still outstanding.

An updated mineral resource estimate for the Michelin deposit is expected early in 2013 after all assays have
been received and validated.

Dazel

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Re: ALS.TO - Altius Minerals
« Reply #848 on: October 24, 2012, 08:14:08 AM »



Iron ore prices are quietly back to the perceived global price floor of $120 per ton....you would not know that from the news headlines as the negativity in the space of the past 3 months has been overwhelming.

FYI

Altius' corporate presentation and assumptions for $27.5m and $55m royalty for 8mt and 16mt at Kami contemplate iron ore prices of $115 per ton.

Dazel.

ItsAValueTrap

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Re: ALS.TO - Altius Minerals
« Reply #849 on: October 24, 2012, 11:21:30 PM »
Hey does anybody know how smelter deductions are normally calculated? / How to get up to date pricing information?
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