Author Topic: ALS.TO - Altius Minerals  (Read 1765846 times)

Ross812

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Re: ALS.TO - Altius Minerals
« Reply #910 on: November 21, 2012, 05:42:50 AM »
Weird why is Alderon being valued lower every day then...

BeerBaron

It could be related to the delayed engineering report. The press release said the report was delayed but did not give a reason for the delay. This suggests that more exploratory borings or laboratory testing was needed to determine the extents and concentration of ore at the Kami project. An engineering firm will not give the excuse "Its just taking a bit longer than we anticipated" they would work overtime until the report was complete. Most of the time, if a report is delayed like this, the sub (driller) needs to go back out, weather delays field work, or there are legal/regulatory problems. I'll rule the later out because I imagine this is pretty routine work in the region, and I believe weather would have been blamed in the press release if it had been the culprit. This does not suggest that Kami is not viable; it only means that the numbers did not jump off the page confirming what the engineers and geologists were looking for. It most likely means the samples from the exploratory drilling came in low, and they are looking for the reason it did not match the previous findings at the site. It's very likely the extents or depth of the deposit may be being adjusted at this stage.
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Green King

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Re: ALS.TO - Altius Minerals
« Reply #911 on: November 21, 2012, 09:09:06 AM »
GK

Dazel

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Dazel

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Re: ALS.TO - Altius Minerals
« Reply #913 on: November 22, 2012, 06:32:38 AM »
http://www.metalbulletin.com/Raw-materials/Iron-ore-and-coking-coal.html


Here is a good resource for pricing and iron ore news.

biaggio

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Re: ALS.TO - Altius Minerals
« Reply #914 on: November 22, 2012, 07:33:40 AM »
Dazel, thanks for the continuous updates on ALS.

To me, it seems that it is easier to see that in the long term that China will eventually start to expand again, folks in rural china will continue to move to a better standard of living and will demand increasing amounts of commodities such as steel/iron, energy, etc. As opposed to the short term- who knows what can happen- bad things may happen (fiscal cliff, war in middle east + elsewhere, slow or no growth in global economy, etc)-eventually these will be worked out and we ll be better off for it.

I really like the idea of collecting royalties on increasing commodity prices over the next 10 years

Things can still go wrong of course. Life is humbling. I like ALS as part of a portfolio with other favorites here such as FFH, BRK, AIG/BAC, LUK and cash.

Other than the delayed engineering report, and short term macro issue does anyone see anything else wrong with this company? What else could be fooling us?

nostradamus

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Re: ALS.TO - Altius Minerals
« Reply #915 on: November 24, 2012, 01:39:39 AM »
Thanks all for helping to answer some of my questions, and thanks in particular to Dazel for getting this board going. As time goes on I become increasinly convinced that there is significant (and increasing!) value in this stock that is not recognised by the market. However, I think biaggio is right that it is important to think about and be aware of all potential negatives - even if, like me, you believe they are massively outweighed by the positives.

For me the negatives are:

1. They are overweight industrial metals and underweight precious metals. If the global economy falls off a cliff I would feel more confortable if they had a royalty stream in precious metals. (That said, given their cash pile, I think the downside is limited)

2. Their track record is excellent, but not perfect. The NLRC was a mistake. Hindsight is a great thing, and maybe at the early stages of the project they were completely correct given all the available information, but they should have cut their losses sooner (I have read an interview in which Dalton admits this). So it is not possible to image that they could again get drawn into some mega project that does not work out. (However, I take the view that they have learnt the lessons from the NLRC experience, plus if in the future they do decide to get involved in some mega project that puts a lot of the equity of the company at risk, I can always decide to exit at that point).

3. Cranberry capital. For me, I invest in Altius so that they can put my money to good work based on their real underlying competative advantage - prospect generation. I don't like the fact that they take some of my money and give it to someone else to manage (irrespective of who that person is and how supportive he has been to altius in the past). Sparkfly?!! Stick to mining.

Any disagreements? Any negatives missing?

N.

 

Dazel

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Re: ALS.TO - Altius Minerals
« Reply #916 on: November 24, 2012, 07:10:10 AM »
I agree with all of the recent posts...here is an older article that encompasses Altius' strategy. They are disciplined...and have learned from putting good money in after bad at Nlrc...they have pinched pennies looking for the perfect add on royalties like irc and Voisey bay. They will be the lowest cost...highest return on capital royalty company on the planet. This takes time to do it right.

If miners continue to struggle for capital...gold miners included...Altius will be there. We would really like to see this huge sell off in junior miners give us an opportunity to deploy capital....Ala IRC...for now they are buying back shares daily which we love.

They are naturally hedged with their cash hoard...The worse it gets the better chance of deploying capital...they are in the drivers seat...to us this makes them an obvious take out target.

Whatever happens...as shareholders you should know they will decide what is the best route to go forward. they are the best jockey in the industry.

http://altiusminerals.com/uploads/2010-feb-BP.pdf

Dazel.





Dazel

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Re: ALS.TO - Altius Minerals
« Reply #917 on: November 24, 2012, 07:33:21 AM »

As for cranberry capital.....we suspect that a lot of the investments are in precious metals...as for sparkly...well...will leave that one alone. Altius network including Cranberry capital, Rick Rule etc is the best the industry...if there is an opportunity they will see it.

We had contemplated uses for the cash...value investing being our specialty and preference...

However, we trust management to the right things. They are focused on their industry and have all the tools and track record to prove their allocation of capital skills. We would love to see a juicy big investment on a sure thing!

http://www.mineweb.com/mineweb/content/en/mineweb-junior-mining?oid=133091&sn=Detail&pid=92730

Dazel.

ItsAValueTrap

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Re: ALS.TO - Altius Minerals
« Reply #918 on: November 24, 2012, 08:23:42 AM »
Thanks all for helping to answer some of my questions, and thanks in particular to Dazel for getting this board going. As time goes on I become increasinly convinced that there is significant (and increasing!) value in this stock that is not recognised by the market. However, I think biaggio is right that it is important to think about and be aware of all potential negatives - even if, like me, you believe they are massively outweighed by the positives.

For me the negatives are:

1. They are overweight industrial metals and underweight precious metals. If the global economy falls off a cliff I would feel more confortable if they had a royalty stream in precious metals. (That said, given their cash pile, I think the downside is limited)

2. Their track record is excellent, but not perfect. The NLRC was a mistake. Hindsight is a great thing, and maybe at the early stages of the project they were completely correct given all the available information, but they should have cut their losses sooner (I have read an interview in which Dalton admits this). So it is not possible to image that they could again get drawn into some mega project that does not work out. (However, I take the view that they have learnt the lessons from the NLRC experience, plus if in the future they do decide to get involved in some mega project that puts a lot of the equity of the company at risk, I can always decide to exit at that point).

3. Cranberry capital. For me, I invest in Altius so that they can put my money to good work based on their real underlying competative advantage - prospect generation. I don't like the fact that they take some of my money and give it to someone else to manage (irrespective of who that person is and how supportive he has been to altius in the past). Sparkfly?!! Stick to mining.

Any disagreements? Any negatives missing?

N.

Couldn't you make very similar arguments against Berkshire Hathaway?

-If the economy fell off a cliff, then Hathaway (like almost all companies) would get hurt.  (And didn't the price of gold go down slightly in the 08-09 recession?)
-Track record not perfect.  (I don't think any company's track record is perfect.)
-Cranberry capital:  It's about finding ways to deploy your capital with favorable risk/reward.  The investment in the Voisey's Bay royalty is an example where Altius was successful in the past in something other than prospect generation.  I don't see it as a mistake.

Quote
to us this makes them an obvious take out target.
I doubt management would like that.  The reason why Altius is obsessed is royalties is because they know that most players in the mining industry do dumb things and didn't compound capital at a ridiculous rate.

Maybe Altius would sell if markets are frothy, the purchase price overvalues Altius, and insiders feel like taking it easy in their lives.  If they know about what happened with AT&T's purchase of Malone's TCI, then I think that Altius management would insist on being able to sell their shares after a takeover.  Such a takeover could happen because a lot of the royalty companies out there have ridiculous valuations and can use their overpriced stock to buy other companies.
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biaggio

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Re: ALS.TO - Altius Minerals
« Reply #919 on: November 24, 2012, 10:20:03 AM »
Has anyone been to a General Meeting or had opportunity to meet/talk to management?

I am glad their record has not been perfect-if it was perfect I would worry even more that this is too good to be true.

In the last presentation they are projecting a dividend of almost $1/share in 2015 growing to $2/share in 2018 just on distributing their royalties- obviously Mr Market does not know this or does not believe this. Market may believe once they start the mine- but better if he never gets it (but it will make us feel better)

Could this be a value trap? Tell tale signs of a value trap that I found a while ago while evaluating some of the mistakes I have made in the past:


1. Is the sector (commodity sector in this case) in long-term secular decline?

- not according Jimmy Rogers or Jeremy Granthem

2. Is the risk of technological obsolescence high?

-No. Engineering/technological innovation may help

3. Is the company’s business model fundamentally flawed?

Royalty business is a good model

4. Is there excessive debt on the books?

No

5. Is the accounting flawed or overly aggressive?

or is there fraud/ previous overly optimistic engineering assessment (iron content of Kami)
I think this for me is what I worry the most about...can we trust the guys at the top. Their track record with previous projects indicates that we should trust them + they have a lot of their own money in ALS.
Biggest immediate problem is if there is a problem getting Kami going- for me this is hedged by all the cash and other projects.

ItsAValueTrap, are there any other things you look at that would indicate a "value trap"