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General Category => Investment Ideas => Topic started by: Dazel on January 08, 2011, 07:58:48 AM

Title: ALS.TO - Altius Minerals
Post by: Dazel on January 08, 2011, 07:58:48 AM
****I POSTED THIS ON APRIL 13/2010....

Altius Minerals-als on the tsx

I find it very hard to play in the resource sector. I have spent a great deal of time trying to understand the pricing of mines, resources etc. To me it is has cost me dearly in a few names I could not pull the trigger on (looked at Teck resources at $6, Hudbay at $3, Quadra at $4!!!!) so I do not pretend to be an expert in the field. I still have an extreme liking for cash and liquidity and I hate capex. Obviously to a fault!

However, Altius Minerals is run by a 35 year old (Brian Dalton) who to me has created a mining company the way I would. They do not mine. They purchased the land rights of numerous mines back in the late 90's and early 2000's. For those that love "Leucadia" on this board they have done the same thing on a smaller scale. They were also a lot earlier than Leucadia. If lyou ook at what Leucadia did with Inmet in Spain you will see what Altius Minerals has done in eastern Canada. They purchased the mining rights for pennies on the dollar and have brought miners in to develop the properties and have taken a piece of the company and royalty payments. They also own a Royalty on the Voisey Bay Nickel mine. This Royalty alone paid out $5 million all in cash in 2008 and 2007...it is on the books at $11 million and it has a 25 year life...
 
They have compounded growth at 37% a year clip over the last 10 years.
*see their presentation on their website dated Feb 2010.
*Rick Rule (he is a value investor in the resource sector and has partnered with Eric Sprott...he is a big holder and bigger supporter of the company)...he has several bnn interviews where he discusses the company.
Altius is loaded in cash on a per share basis with no debt (margin of safety)....but it is their properties and      royalties that offer the upside. They purchased over 10 percent of their shares back during the downturn where the other miners were issuing shares.

mkt cap
$305 million
$205 million-cash equivalents after making $30 million in gains in IRC in 6 months (it was sold to Royal Gold with Altius securing the deal with the tender of their 10 percent position)...the market has not seen    
 this gain in their financial results but it has been disclosed.
$100m for the company after backing out the cash

$100m-The Voisey bay royalty is worth at least this over 25 years..$4m a year is low...Nickel is hitting new    highs for the year...Voisey bay is on strike right now so the market is forgetting it. This is an all cash payment made by Vale.

When you back out the cash and the Royalty Altius is free or less than free as we think the Royalty could be worth much more.

What's left for free?
Look at the website they do a great job of describing their projects...I suggest you look at the Aurora uranium project and how they did it...2006
13 projects are ongoing

Alderon is the one with the greatest near term potential. Their value in the market on conversion (not guaranteed) is in the $80m range. $2.50-they would own 34m shares on conversion if drilling supports what Alderon thinks. Alderon is made up of the former managment of Thompson Consolidated (iron ore) which is located very close to the Alderon sites. I wish we had owned Thompson it has gone from about 20 cents to over $10 bucks! They are producing iron ore this year.

They have a $29m claim in court against Vale for underpayment on their royalty in Voisey Bay

The biggest call option is NLRC...which they have written off to 0 on the balance sheet. It is the first refinery project that has been fully permitted in North america in a generation which also has some heavy hitters on board (Harry Dobson a billionaire from Scotland). They have a great deal invested in this project. With the financial crisis and suppliers troubles having put the project is in doubt (it has been through court proceedings) I am confident in the ability of the ceo Brian Dalton to salvage some value from it...If he can pull it off it as homerun. I like to speculate when it is free!

For what it is worth we own the shares...we have purchased as low as $5.70 and we are the high for the year I believe  at $10.75.
Title: Re: Altius Minerals
Post by: Dazel on January 08, 2011, 08:09:10 AM
UPDATE.
Stock is up about 40%.
Rick Rule (a major owner of Altius) has been bought out by Sprott.

From April 13th
"Alderon is the one with the greatest near term potential. Their value in the market on conversion (not guaranteed) is in the $80m range. $2.50-they would own 34m shares on conversion if drilling supports what Alderon thinks. Alderon is made up of the former managment of Thompson Consolidated (iron ore) which is located very close to the Alderon sites. I wish we had owned Thompson it has gone from about 20 cents to over $10 bucks! They are producing iron ore this year."

Converted
Alderon has converted Altius shares and they now own about 45% of the company with a 3% royalty on future iron ore production...the 45% is worth about $90million and the royalty???we will see...this is what Leucadia did with Fortesque.

The nickel Royalty is paying low amounts because of the Voisey bay strike but it appears that may be coming to an end.

$400m market cap now...they now have approx $300m in cash and securities...so $100m for the other 12 projects.

The oil refinery is still the massive call option...there has been no new news there.

disclosure: It is our largest position.

Dazel.

Title: Re: Altius Minerals
Post by: Myth465 on January 08, 2011, 08:18:16 AM
Dazel do you still see significant upside. I started getting excited towards the end then noted it was from April last year. Lol, congrats.
Title: Re: Altius Minerals
Post by: Dazel on January 08, 2011, 08:33:56 AM

"Dazel do you still see significant upside. I started getting excited towards the end then noted it was from April last year. Lol, congrats."

Yes. We have doubled our position in the last month..We love the managemnet...The CEO recently added to his position through the purchase of his opitons...He has about $20 million in the company of whihc he is the co founder..all options are long term and performance based...

It basically trades for cash if you include the Voisey Bay royalty with marketable securities.


This year there are 3 catalysts playing out.

Alderon could be just huge. They will be news driven all year and already are take out candidate from their neighbours in Labrador...Labrador is the iron ore hot spot of north America right now.

Royalty- The strike at Voisey bay will end soon.

The oil refinery project has to be concluded by Oct 2011..so we will see news even if it is a liquidation Altius will get money out of it...a sale is good but A partner would double the stock over night. Take a look at the project on their website.

Altius hit $45 a share in 2007...

Dazel.
Title: Re: Altius Minerals
Post by: Myth465 on January 08, 2011, 09:28:28 AM
Doubling down after a 40% run is extremely hard to do for a value investor. Buying shares at $13 when they were bought for $5 is even harder. That speaks values about your conviction.

-----

2011 has really hit the ground running. I feel as though I need a none oil related resource play (more pure play then LUK and more of an investment than a tracking stock) and a bank. Both for investment returns and continued circle of competence development.

I plan to look into this one and one posted by Swizzled / Canadian Value. http://feedproxy.google.com/~r/CanadianValueInvesting-StudyOfBuffett/~3/DK2mnsG9JKQ/idea-to-check-out.html

What I do enjoy is, I dont need to know much for either of these. I understand options and will take them where I can get them when they are free.

Thanks again.
Title: Re: Altius Minerals
Post by: tengen on January 08, 2011, 07:03:29 PM
Altius hit $45 a share in 2007...

Are you sure about that? I've owned ALS since 2006 (and have also added over the years) and I don't recall it ever trading that high.

I agree it's a great company. My second best investment after FFH.
Title: Re: Altius Minerals
Post by: shalab on January 08, 2011, 09:00:32 PM
Looks like ALS hit a peak of about $30 in 2007. I checked out their balance sheets for the past three years - looks like they bought back their own shares which reduced their outstanding shares a bit but this is getting offset by generous distribution of options?

Also, the oil refinery was in bankruptcy where ALS owned equity. Typically, in a bankruptcy, equity gets wiped and creditors take possession. I couldnt find anything obvious to say that ALS will have something in the refinery. To be conservative with estimates, I gave it a value of zero.

Their business model is definitely interesting/smart.

Looking at their Q2 financial statements, I see cash, marketable securities, accounts receivable and income tax receivable at ~172 million. The total equity is around 232 million. The revenues from continuing operations dont seem to be adequate to explain the rest of the market cap - so pretty much people are betting on the remaining exploration projects to pay off....

Title: Re: Altius Minerals
Post by: biaggio on January 09, 2011, 05:34:57 AM
Congratulations Dazel!

Looks like a good find.

I tried to find proxy in SEDAR to find out how much skin management has in the company.-the proxy for this year in SEDAR appears to be another company....anyways I am surprised and a little concerned that one of the founders only has $20 million in company (though that is pretty good for a 34 year old, assuming he started out with very little) + mkt cap is $300 m...do you know off hand how much the rest of management owns.Looks like there has been some selling -http://www.canadianinsider.com/coReport/allTransactions.php?ticker=als  -I know that selling may not be that important.

I am impressed that CEO is only 34. Never heard of him before(that does not mean much), but could he be the next superstar?

Other minor concern is that some of the cash equivalents is the value of resource stock held which I believe has had a good run lately, though.  I don t follow resource sector very closely at all.

I like the royalties. I would think it would do well in an inflationary environment + with growing economy.

Do you have a figure on how much the stock is worth?

Thanks
Title: Re: Altius Minerals
Post by: Dazel on January 09, 2011, 04:10:45 PM
 They own the debt on the oil refinery...as well as the equity.
I believ the $45 was an intra day high...Rick rule said he owned at $45...could be mistaken.

The margin of safety is in the projects and assets...they made $200 million on their Uranium spin out...they will likely make more tham that on Alderon...
If they were to liquidate they would likely be worth double...You have to look at their track record of converting their assets in to cash...It is very similar to what Leucadia has done over the last 8 years. Except Altius has returned more money per porject...obviuosly on a smaller scale.

Dazel.
Title: Re: Altius Minerals
Post by: Dazel on January 09, 2011, 06:17:12 PM

Total equity does not include the approx $90 million unrealized gain on Alderon....The shares were issued
to Altius in Decemeber...we expect that the Alderon investment and cash will equal...the $400 million market cap...so the rest of the very valuable assets are free. I do not have a target price...and I do not have a time frame but the company is worth much more than $400m.

The numbers will look stupid with $100m gain in the quarter...we expect the market to give the management the appropriate multiple once the Alderon project gets more attention. They have about $3m invested in Alderon. disclosure we bought Alderon (ADV-venture) at $1.50 and sold it recently...we are more comfortable holding the bigger Altius postion.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 09, 2011, 06:23:08 PM

*The $200m is moslty cash or short term Canadian government paper...The Alderon investment has not had a reporting quarter...so The cash and marketable securities would be closer to $300m...that is what the balance sheet will look like next quarter.

Title: Re: ALS.TO - Altius Minerals
Post by: Myth465 on January 09, 2011, 07:02:53 PM
It seems as though the Refinery project is mainly just the necessary approvals. Am I missing something. That in and of itself is worth something.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 10, 2011, 05:34:15 AM

The refinery project approvals are the intrisic value...Altius put about $100 million of equity and debt into the project...they carry it at 0....and it really is a call option...it could be worth very little...but in a liquidation scenario...Altius as the only debt holder would get something back.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on January 10, 2011, 05:44:28 AM
I was speaking to an engineer in the energy field a few weeks ago---and he was explaining how difficult to get an approval for a refinery which we all know due to enviro issues + who wants one in their back yard....but I did not realize how long it takes to build one + get it going/operating. He said it takes >10 years from scratch. Does that sound right? If so than the refinery owned by ALS has significant value.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 10, 2011, 07:01:59 AM

Refining project is NLRC -Newfoundland and Labrador and Refining Corporation (they have a website)

It really has very little value right now...they need a Major partner...It is the first Refinery project
approved in North America in generation...for what that is worth?
It is appropreaite to value it at 0...we value it as an out of the money call option.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Myth465 on January 10, 2011, 07:21:13 AM
Seems like one should focus on Alderon in terms of understanding where the value will come from this year. The royalty issue is fairly straight forward.

Amazing what they did with the Uranium play. 650k to 200 million. I dont think even LUK has done something like that.
Title: Re: ALS.TO - Altius Minerals
Post by: gurjot on January 11, 2011, 05:05:58 PM
this is a good company to own in resource sector.  Also  they hired Paul Van Eeden recently to manage part of their 200 million cash.
if they can find someone to finance the refinery stock can double from here.
Title: Re: ALS.TO - Altius Minerals
Post by: netnet on January 11, 2011, 08:26:45 PM
Two questions:

Title: Re: ALS.TO - Altius Minerals
Post by: Thrifty3000 on January 11, 2011, 08:38:29 PM
Alderon up 14.5% to 3.08.

http://finance.yahoo.com/news/Alderon-Confirms-Rail-and-iw-2097525415.html?x=0&.v=1
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 12, 2011, 07:09:02 AM

Alderon is at $3.60 (up 12%) on the news that their next door neighbor got taken out for $5 billion...Alderon"s management is the former founders of Consolidated Thompson....interested yet????

http://us.rd.yahoo.com/finance/external/bloomberg/SIG=13ivsap6u/*http%3A//www.bloomberg.com/news/2011-01-12/cliffs-to-buy-consolidated-thompson-to-tap-china-iron-ore-growth.html?cmpid=yhoo
Title: Re: ALS.TO - Altius Minerals
Post by: Myth465 on January 12, 2011, 07:18:44 AM
Dammit Dazel. Everything im looking at is running away. Where is the pull back when you need it.
I would hope for a take over, Im not overly bullish on Iron Ore given the state of Chinese investments.

I like the fact that these guys are Wheelers and dealers and arent wedded to the mine.
Title: Re: ALS.TO - Altius Minerals
Post by: gurjot on January 13, 2011, 08:34:24 PM
just wanted to let everyone know altius will have a booth at vancouver gold show next weekend.  if you have any question can be answered there.

thanks
Title: Re: ALS.TO - Altius Minerals
Post by: Thrifty3000 on January 21, 2011, 08:04:25 PM
Mills Lake deposit is larger than initially expected: 

http://www.dailyfinance.com/rtn/pr/alderon-confirms-iron-at-mills-lake-with-30percent-iron-over-193-meters/rfid406558195/?channel=pf

ADV = $3.73

Title: Re: ALS.TO - Altius Minerals
Post by: Thrifty3000 on January 28, 2011, 10:57:18 AM
1/26 - Tentative agreement reached with striking Voisey's Bay workers.  Unanimously endorsed by labor union reps.

http://nickel.vale.com/pdf/Tentative%20Agreement%20January26%202011.pdf
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 28, 2011, 03:26:03 PM


thx for the update....i saw it and did not post.

Alderon at $5.70 makes Altius  free...trading for cash. With all of the above projects and the royalty
stream at Voisey bay that will be bigger in the coming years. Altius also has $28m lawsuit against Vale for under payment.
we continue to add shares.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: netnet on January 29, 2011, 09:19:57 PM
I read through a number of AR's today.  This Brian Dalton seems like the real deal, a Pierre Lassonde or a Schulich in the making.

Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 30, 2011, 08:02:38 AM

When Rick Rule was asked about what he thought about Dalton and the management at Altius...
He said it made him "giddy" on BNN to think how much money they would make on the $200m cash hoard in the mining environment at the time.
They have since made $30m on the IRC deal,  a few $$m and counting in Millrock res and about $110 million and counting on Alderon!
While most mining companies are selling shares...Altius is bufferring cash with capital gains. Our kind of company. I would have to concur with Mr Rule that I am giddy with what they have done.

Problem not unlike other most forgotten stocks they are not followed by a single analyst...because they don't have any debt to raise or capital to raise. That may change if they want to keep their percentage stake in Alderon as it moves towards production. I have some ideas...for another time.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Thrifty3000 on January 31, 2011, 08:06:24 PM
The Voisey's Bay miners voted to end the strike.

http://www.cbc.ca/canada/newfoundland-labrador/story/2011/01/31/nl-vale-vote-131.html
Title: Re: ALS.TO - Altius Minerals
Post by: value-is-what-you-get on February 01, 2011, 11:03:59 AM
"Royalty revenue from the LNRLP was $1,654,000 during the year ended April 30, 2010 compared to $4,088,000 for the same period last year. Decreased royalty revenue was the result of lower concentrate shipments as a result of the continued strike at the mine site and at the smelting facilities in Canada. The reduction in concentrate shipments is expected to continue until the strike is resolved."

Strike is resolved so . . . looks like this cash tap has been turned on again!
Title: Re: ALS.TO - Altius Minerals
Post by: Mungerville on February 01, 2011, 02:21:16 PM
Dazel,

I haven't posted much lately. Looks like an interesting find and I don't tend to think much is interesting.

So its a bunch of free options with a net-net and a long-term value oriented CEO with a strong balance sheet and a decent track record. That's a pretty good start. How do you lose money on this stock long-term? Any ideas?

If the only way to lose is for commodities to tank, could you not buy a good chunk and hedge it with put options on a commodity index?...taking out that risk thereby permitting you to invest more into it than you otherwise might.



Title: Re: ALS.TO - Altius Minerals
Post by: Mungerville on February 01, 2011, 02:37:46 PM
Dazel,

I am precluded from transacting in gold or gold mining shares where I currently work. For this reason, I am asking you, roughly, what percentage of the value of their projects are in gold mining versus all other mining projects together? Just guestimate...

a) More or less than 10%?
b) Less than 5%?

(If its down there somewhere, I might be able to invest!)
Title: Re: ALS.TO - Altius Minerals
Post by: gurjot on February 02, 2011, 05:08:14 PM
as of now close to zero.  but they did hire paul van eeden recently to manage 25 of 200 mil in cash they have and some of that probably will be invested in early gold exploration companies.

cheers
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 02, 2011, 07:41:08 PM

Mungerville,

Altius Gold holdings-Millrock (bought $1m...sold $2m worth and likely have $2m holding)
                         -Rambler Metals (copper-gold) about $5m holding
                          -2 or 3 projects on the books for less than a million

as for the joint venture with Van Eden...I would highly suspect that gold is holdings would be very small. As you can see from the Millrock sales above they made above they are not big on precious metals.

So likely saying 5% would be a stretch.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 02, 2011, 08:05:00 PM

"So its a bunch of free options with a net-net and a long-term value oriented CEO with a strong balance sheet and a decent track record. That's a pretty good start. How do you lose money on this stock long-term? Any ideas?

If the only way to lose is for commodities to tank, could you not buy a good chunk and hedge it with put options on a commodity index?...taking out that risk thereby permitting you to invest more into it than you otherwise might."

Mungervillle,

good question...and not a bad way to hedge.

One thing to note is that they do not have a big commodity risk to their current market cap because the majority of their assets are cash equivalents. Could Alderon ($120m securities) be effected by iron ore prices? next year yeah..but the price this year (2011) is slated to go up by 50 to 80% and it does not float!

The Nickel Royalty will kick now that the strike is over at Voisey bay. As time passes the Uranium and other royalties will also kick in....So longer term commodities will effect asset prices but the market is pricing them at 0 right now anyways so what's the risk. why hedge.

Here is an interesting free option....they have a Potash property, Oil shales, and rare earth projects. How quickly do you think you could have speculators on these properties? I mean if they went to market tomorrow and said they were auctioning off the properties one by one....you would make 3 times your money.

The controling position of Alderon 45% should have a premium as well because they will decide who gets the property and it is very possible that they do put it up for bids once their final estimate is done in early March.

I think they will continue to create value and do things similar to what Leucadia has done with their resource projects...creative...they are not using their cash...it's great model with very little risk.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Mungerville on February 03, 2011, 11:40:02 AM
Dazel,

Thank you for taking the time to answer my rather lame questions. Much appreciated. I'll check with compliance where I work and hopefully have the opportunity to dig into the details and invest.

Looks like an interesting opportunity to me.
Title: Re: ALS.TO - Altius Minerals
Post by: netnet on February 03, 2011, 11:44:25 AM
I hate to say it but the problem with investing in this name is I can not find any reason not!

To be contrarian, I have to know approximately what will make this a bad investment.  A crash in resource prices would hurt but given how they invest, it probably would be a good for them, as they could deploy capital.  So it would be bad for the stock in the short term but great for the business and business model in the long run.

It is a bit of a jockey stock, so there is some risk there, but this guy has really knocked the cover off of the ball.  The company is really, really cheap given a superior business model and a tail wind.  Now obviously if the guy is crook that would be a problem, but he seems so far above the sleaze that you sometimes find in the junior resource sector, he does not even seem to be an aggrandizing in a benign way.  (Buffett is not a promoter per se, but he is no shrinking violet either!) Nor does he appear to be overly optioned.

Okay guys I can't find any warts.  There have to be some. What gives.

(You might wonder why I am so skeptical.  Well not only do I have the scars to prove it, need I remind people of Biglari.  That twerp fooled me.  Not to say that my radar is that good.  I thought that Prem was really a Biglari type.  I just did not trust Prem's letters to shareholders, when he was channeling Buffett.  Yet I believed Biglari when he did it.  I learned anew to be skeptical.)


Best,

Netnet
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 04, 2011, 07:45:58 AM

Altius Character.

Altius is backed by the best characters in the mining business. Rick rule has perhaps the best reputation for mining investment in junior's in the United States. He is now part of the Sprott group. Scottish billionaire Hobson (formerly owned 8% of Manchester United) is a shareholder and partner in Rambler metals and NLRC. These are great investors...and have been a great sounding board for Dalton.

Dalton....He is from Newfoundland and did his geology degree at Memomorial also in that province. His reputation at home would mean more to him and Altius than $$ could buy. Trust is a big thing in Newfoundland. The permits for their projects and the NLRC licenses are landmark decisions. I am impressed by how conservative they have been with their cash reserves and capital postion...as we know the junior mining sector has a bad reputation. However, Altius has emerged as a smashing success...they were founded as a 10 cent stock...how is that return?

Dazel.   
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 04, 2011, 07:48:07 AM

Alderon now has a market cap of $270m.....it was worth less than $1m on Altius balance sheet a year and half ago!

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Myth465 on February 04, 2011, 08:17:54 AM
Dazel you should be in sales. It doesnt seem like the run in Alderon is being reflected in the stock price of Altius.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 04, 2011, 08:46:47 AM


yeah...can you tell I am a little excited about this position! 
Title: Re: ALS.TO - Altius Minerals
Post by: alertmeipp on February 04, 2011, 08:48:24 AM
okay.. u got me in.
remember if it tanks shortly after, it's not me.
Title: Re: ALS.TO - Altius Minerals
Post by: Myth465 on February 04, 2011, 09:57:37 AM
Im close currently going thru letters. Will likely buy a small starter position by the end of day. These guys have been very impressive with their equity investments. I dont know much about mining but I can use a calculator. This seems like a no brainer. They will mint money if all these mines get up and running due to the royalties and in the meantime they have been able to generate pretty high returns on their cash by doing LUK like ventures.

Hopefully the moves in Alderon are sustainable (I have no idea how to value that one), even if they arent there are alot of assets and free kickers here, it would be tough to loss unless these guys push all in on the wrong idea.

Current Asset Base (as of December 31, 2010)
 $145 Million in treasury
 
529,251 shares of Royal Gold Inc. valued at ~$28 Million (received as part of  IRC purchase transacti)
 
Voisey's Bay LP interest (10%)
 
*32,285,006 shares of Alderon Resources Corp. (ADV-TSX-V)
 
$25 million investment with Cranberry Capital (Paul van Eeden) - early stage mineral exploration companies
 
Increasing collection of "created" royalties - Paladin Energy - CMB - 2% gross sales uranium royalty and 2% NSR on base metals and precious metals, Alderon Resource Corp. - 3% Gross Sales Royalty on Kami iron ore project, Northern Abitibi's Viking Gold project 2-4% sliding scale net smelter return royalty, Rare Element Resources' Nuiklavik REE project - 2% gross over-riding sales royalty.
 
Diverse portfolio of exploration projects including 9 active Joint Ventures
 
Rambler Metals and Mining plc (12 million shares)
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on February 04, 2011, 02:09:33 PM
"Hopefully the moves in Alderon are sustainable (I have no idea how to value that one), even if they arent there are alot of assets and free kickers here, it would be tough to loss unless these guys push all in on the wrong idea. "

Insiders have not cashed in their options that they were awarded recently- http://www.canadianinsider.com/coReport/allTransactions.php?ticker=adv
Showed also a small amount of insider buying.
Title: Re: ALS.TO - Altius Minerals
Post by: sdev on February 04, 2011, 02:10:25 PM
Wow, wish I hadn't ignored this thread until now. Great little company Dazel. Keeping this on the watchlist to see if it ever has a solid pullback.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on February 04, 2011, 02:39:44 PM
sdev, I have not bought any, but it looks like it looks like a good bargain still.

What do others think?
Title: Re: ALS.TO - Altius Minerals
Post by: Myth465 on February 04, 2011, 03:24:35 PM
I bought a 1.5% position today and will likely scale it up as my cash is moved around, will probably hold at 5% while I "learn about mining and Management". It seems like a good owner manager company. The only risk from my view is Alderon being overvalued and all other options turning out to be worthless.

Similar to LUK, if I can get back to the enterprise value based on a very conservative valuation of the assets and still have a number of free kickers I am happy. Based on market value for a valuation of Alderon and Rambler, + taking the Cranberry Capital investment at book, + the cash, + a conservative valuation for the Bay royalty gets us at or over the EV.

After that everything else is free, and I am happy seeing what they come up with given the returns they have been able to generate on their cash thus far. Plus I believe we are getting a decent chance to buy before the run up in Alderon gets reflected in the SP. Worse cause Alderon collapses and we are right back where we started.
Title: Re: ALS.TO - Altius Minerals
Post by: alertmeipp on February 04, 2011, 05:00:17 PM
Congrats - check out QUX.TO too. I think they are pretty cheap COPPER play.
Title: Re: ALS.TO - Altius Minerals
Post by: Myth465 on February 04, 2011, 05:13:58 PM
Congrats - check out QUX.TO too. I think they are pretty cheap COPPER play.

You guys make it terribly hard to hold cash, I know we are due for a pullback but my cash loads are dwindling.
Title: Re: ALS.TO - Altius Minerals
Post by: Zorrofan on February 05, 2011, 08:58:08 PM
Dazel,

Did you say Sprott owns some? I haven't been able to confirm that it in any Altius filing....

cheers
Zorro
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 06, 2011, 12:50:34 PM

They were in joint venture with Sprott Resource corp.

Sprott Inc bought out Rick Rule and his related companies with Sprott shares...that deal will be finalized in February....Rick Rule and his firms have been longtime holders of Altius...so they will own some! I have not seen a direct investment though...I would not be surprised if they are the elephant in the room lately. They obviously know Altius.

disclosure...we now control about 1.5% of the shares outstanding.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Mark Jr. on February 07, 2011, 08:12:29 PM
Dazel,

Did you say Sprott owns some? I haven't been able to confirm that it in any Altius filing....

cheers
Zorro

I was just looking at Sprott's latest 13-F and they aren't listed as a holding

http://www.sec.gov/Archives/edgar/data/1277006/000127700611000024/dec1013fa.txt
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 08, 2011, 10:21:41 AM

Rick Rule has made a killing on his Sprott deal! Most have not heard of him. He is the reason i got interested in Altius!

http://www.theglobeandmail.com/globe-investor/investment-ideas/streetwise/sprotts-takeover-partners-gain-from-share-rally/article1897395/

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Partner24 on February 11, 2011, 01:26:17 PM
Can someone come up with a some of the parts calculation?

It's a nearly 400$ millions market cap company.

- (145 millions and treasury December 31th)
- (125 millions Alderon stake actual value) + related future income tax
- (28$ millions in Royal Gold)

Still more than 100 millions in assets to find in order to say that everything else is "free".

Title: Re: ALS.TO - Altius Minerals
Post by: Myth465 on February 11, 2011, 01:44:18 PM
You are missing the bay royalty interest is probably worth at least $100 million now that the strike is over.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 12, 2011, 05:54:42 AM

Partner24,

Not sure what you are looking at. Last reporting period for Altius is Oct31st...end of their second quarter.

$170m cash and marketable securities
$32m mining investments securities (including Rambler and Millrock)
$3m equity related investments...(this is where Alderon is...since it was converted on Dec 8th it has not been reported)
so basically $200m cash and securities plus Alderon $125m and the Voisey bay Royalty at $75m (on the books at $10m) equals $400m or the market cap for Altius...all the rest is free.

when Altius reports their 3rd quarter it will easy to see what I am saying now you have to do some work. The gain in the 3rd quarter will be in the range of $120m. The end of their 3rd quarter is Jan31st.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 12, 2011, 06:07:43 AM

"To me this looks like fully valued based on current assets - it is a play about the future, what this company can be based on historical returns."

Shalab,

I will go with your theory for the moment..
If Altius were to liquidate....they would be selling off the company in pieces....giving 0 for the historical returns and the managements ability.

what do you think you would get?

Now look at the company and value the future values of each individual asset and give the management a multiple for their excellent track record. You will have to include all the future royalty payments not yet received...

either way you do it...I think you will concur it is worth more than the 3 assets it is being valued at Cash, Marketble securities(including Alderon) and the Voisey bay royalty.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Mungerville on February 12, 2011, 09:39:33 AM
Dazel,

So the big 3 items are worth $400M plus or minus.  Excluding the value of management, what kind of value do you place on all this other stuff we get for free (ie on a liquidation basis, not a fire sale but orderly wind-down). Would you say this other free stuff is worth discounted to present value?:

a) less than 200M
b) 200-400 or
c) 400M plus

I guess the question is, roughly how much do you figure this whole thing is worth in a wind-down scenario selling off assets in and orderly manner? 400M plus a), b) or c)?

I know I should be figuring this out myself but I am not an expert on mining projects/stages and their market values.
Title: Re: ALS.TO - Altius Minerals
Post by: RolfGunderson on February 12, 2011, 11:07:02 AM
Some additional detail. I'm midway through my own valuation.

Fully Diluted Shares Outstanding

29,816,395 at September 13, 2010

Cash and Liquid investments

$170,000,000 (from Feb 2011 presentation by Alderon) - $5.70/share

Equity Positions - Working to determine if each of these holdings is fairly valued.

Northern Abitibi Mining Corp - 1,115,000 shares @ 0.24 = $267,600
Royal Gold - 529,297 shares @ 47.04 = $24,898,130.88
Alderon Resource Corporation - 32,285,006 @ 3.92 = $126,557,223.52
Rambler Metals and Mining - 12,000,000 @ 0.69 = $8,280,000 (however, Rambler has significantly diluted shareholders several times)
Millrock Resources - 7,932,046 @ 0.81 = $6,424,957.26
Joint venture with Cranberry Capital - $25 million (89.2% interest) to invest primarily in early stage mineral exploration companies, managed by Paul van Eeden.

Total Equity Positions of $191,427,911.66 - $6.42/share

Other Investments

Newfoundland and Labrador Refining Corporation - 39.6% interest; carried at $0 (NLRC must sell its assets to satisfy creditors or complete financing of the project by October 2011). Altius is also a secured creditor of NLRC.
Millrock Resources - June 2010 warrants for the purchase of 3,450,000 common shares at a price of 45 cents per share for a period of five years; $1,242,000=(0.81-.45)*3,450,000 shares (not sure if I'm double counting this. I don't see that these warrants have been exercised.)

Current and Potential Royalty Streams

Voisey's Bay - 0.3% net smelter returns (30 year life; revenue of $4.1m in '09 before strike)
Millrock Resources - 2% on gold and 1% on other commodities

Aurora Energy - 2% gross uranium sales royalty and a 2% net smelter return. This project is subject to a three year moratorium, subject to review on or before April 2011, imposed by the Nunatsiavut government (the self governing Inuit of Northern Labrador)
Northern Abitibi Mining Corp - 2 to 4% sliding scale net smelter royalty, tied to price of gold.

Early Stage exploration

From 2010 AR, Altius is pursuing 17 projects (18 with Cliffs included?) at a generative or early stage, including:

Labrador Iron Ore – potential 49 (Altius)/51 (Rio Tinto) interest if Rio Tinto meets certain investment targets by December 2011. Triggers a range of possible (positive) outcomes including a 2-3% gross royalty for Altius (3% unless Rio Tinto buys down 1% of Altius' royalty stream for $10M).
50/50 interest in potential joint ventures with Cliffs Natural Resources, triggering a 1% net smelter royalty for Altius. Exploration costs funded by CNR.

This paragraph from their 2010 AR outlining Altius' strategy is also instructive:

Altius’ principal business activities are focused on the generation and
acquisition of mineral projects and royalties. Often these business
activities generate alliances or corporate structures which result in the
Company creating minority and non-operating projects or equity interests
in addition to project-level royalty interests. The creation of certain equity
stakes through the co-founding of special purpose companies (“spin
outs”) has resulted in significant profits in the past and continues to be a
key plank in our strategy. To complement this work and in recognition of
its large accumulated cash position the Company also pursues direct royalty
interests and equity stakes in companies with undervalued quality assets.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on February 12, 2011, 03:35:51 PM
Nice job Rolf!
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 12, 2011, 05:40:24 PM

Rolf,


thx for the effort but I think you are at least 6 months behind...Royal Gold was sold a year ago.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: RolfGunderson on February 12, 2011, 05:57:32 PM

Rolf,


thx for the effort but I think you are at least 6 months behind...Royal Gold was sold a year ago.

Dazel.

Dazel,

Altius received both cash and convertibles for their IRC shares. I haven't seen where they have disposed of the Royal Gold shares. Do let me know if I have missed something.

From 2010 AR (June, 2010):

"The IRC Shareholder vote was held on February 16, 2010 and the results of the shareholder vote were positive. Upon court approval
and closing the Corporation received $37,520,000 in cash and 529,297 shares in RG Exchange Co Inc representing estimated total
proceeds of approximately $63,132,000 and recorded an estimated gain of approximately $28,413,000. The RG Exchangeable shares
have all the rights of Royal Gold common shares and are convertible into Royal Gold common shares at the option of the holder."

DP
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 12, 2011, 06:10:06 PM


Rolf,

2010 year end april 30th included a $30m gain from the sale of Royal gold shares...I would love to be wrong but I think that was all they made....

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 12, 2011, 06:11:44 PM
Mungerville,

disclosure...we own a lot of Altius....if you have not seen it...I am biased.

I think Alderon (the fact they have control of the property at some point will give them a premium) alone is worth more than the market cap...disclosure once again we owned Alderon and sold it..we would rather own Altius than Alderon as there is operational risk...However, we followed what Leucadia did in Spain and with Fortesque...the properties are worth a great deal and you have a team that just keeps executing again and again...and I get them for free.
The answer to me is greater than $400m ($30a share...not tomorrow...but not long either).

Dazel.

Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 12, 2011, 06:20:23 PM

Sorry Rolf,

I do not want to seem confrontational....thx for the hard work! at least 25% of Millrock has been sold...and Alderon and the Cranberry capital partnership has not been reported on the balance sheet...so what I am talking about is not obvious...as always we here on the board are ahead of the heard...there is not one analyst covering the stock...Alderon has 5 analysts!

pls look at my previous post on cash and security values they come from Oct 31st....plus Alderon and the Voisey bay Royalty.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 12, 2011, 06:59:55 PM

Rolf,

"2010 year end april 30th included a $30m gain from the sale of Royal gold shares...I would love to be wrong but I think that was all they made...."

Rolf my apology.....you were correct that they own the the exchangeable Royal gold shares as of Oct 30th...the gain was realized in April 30th year end...thought they had done a forward agreement on the shares... can"t find it and don't care to look anymore.

good job!

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: RolfGunderson on February 12, 2011, 07:09:38 PM

Sorry Rolf,

I do not want to seem confrontational....thx for the hard work! at least 25% of Millrock has been sold...and Alderon and the Cranberry capital partnership has not been reported on the balance sheet...so what I am talking about is not obvious...as always we here on the board are ahead of the heard...there is not one analyst covering the stock...Alderon has 5 analysts!

pls look at my previous post on cash and security values they come from Oct 31st....plus Alderon and the Voisey bay Royalty.

Dazel.

Dazel,

No worries at all. If I'm wrong I want to know. Thanks for taking the time to respond.

I just realized I didn't review the 2nd quarter financial statements, so you're probably right about Millbrook. I'm going to ask about the Royal Gold convertibles and will post when I hear back.

Your responses are much appreciated.

DP
Title: Re: ALS.TO - Altius Minerals
Post by: Partner24 on February 12, 2011, 07:16:00 PM
Current Asset Base (as of December 31, 2010)
• $145 Million in treasury
 
•529,251 shares of Royal Gold Inc. valued at ~$28 Million (received as part of  IRC purchase transacti)
 
•Voisey's Bay LP interest (10%)
 
•*32,285,006 shares of Alderon Resources Corp. (ADV-TSX-V)
 
•$25 million investment with Cranberry Capital (Paul van Eeden) - early stage mineral exploration companies
 
•Increasing collection of "created" royalties - Paladin Energy - CMB - 2% gross sales uranium royalty and 2% NSR on base metals and precious metals, Alderon Resource Corp. - 3% Gross Sales Royalty on Kami iron ore project, Northern Abitibi's Viking Gold project 2-4% sliding scale net smelter return royalty, Rare Element Resources' Nuiklavik REE project - 2% gross over-riding sales royalty.
 
•Diverse portfolio of exploration projects including 9 active Joint Ventures
 
•Rambler Metals and Mining plc (12 million shares)
Title: Re: ALS.TO - Altius Minerals
Post by: Mungerville on February 13, 2011, 02:21:41 AM
Dazel,

Let me just make sure I am getting what you are saying right and am not misinterpreting.

a) You think that Altius' stake in Alderone alone is worth over 400M (which is Altius' current market cap) meaning Alderone should be valued at more than $400M not its current 150M.
b) so at $30 per share in value for Altius, the revaluation of a) is the main value driver to get us from $13-14 a share to say $23-25 or so a share, then there is $6 or more a share in the value of other Altius projects
c) you initially chose to invest in Alderone but then went with Altius because it had lower operational risk than Alderone
d) but now that Altius owns a big chunk of Alderone, and Alderone is a big driver in the value of Altius, Altius is currently incurring a large amount of the operational risk Alderone is incurring by virtue of its majority ownership of Alderone

Am I interpreting what you said correctly in terms of a), b), c) and d).

e) If yes, your high-level investment thesis revolves around valuing Alderone first (up from 150M to around $500Mish), then second becoming very comfortable with Altius management and ability to execute/track-record, etc for the remaining $6 plus plus a share in value of Altius to get us from $23-25 a share to north of $30 a share. Is this what you are saying?




Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 13, 2011, 07:53:01 AM


Mungerville,

I have been here for awhile..(Altius)..bought in the 5's all the way up....to our highest purchase at $14.20.

Management is the best in the business....by all accounts..proven and continuing to prove.

My theisis...my first buys were a tap in as we say...we watched the stake they were taking in IRC and the subsquent quick $30m profit (we studied what the royalties were worth and equated that to what Altius' royalty in Voisey Bay was worth)...IRC was sold to Royal Gold. We knew Alderon was in the works so we studied Thomson Consolidated....Alderon is next door in Labrador and the founders of Thomson Consolidated are the founders of Alderon with Altius...one of the best business combinations around.

Thomson Consolidated land was purchased for $1.5m in 2005...it sold to for $5 billion last month.
You can see how we got interested in Alderon since we believe they will dupilcate what they did before. So we bought Alderon at $1.50...

Present market cap for Alderon is $260m of which Altius owns 45% and a 3% royalty...As I concluded  earlier I think that Altius will realize more than $400m from this project (including royalty). That would put Altius in the range of the middle $20's...as you have alluded.

Why did we not just buy Alderon and hold it since it has to go up in price for Altius to realize the $400m I think they will reap?

Because we think that Alderon is the catalyst for Altius' stock price. We think they will get a premium from the market once the world realizes what is going on. What they have done in the past and what is possible with their remaining properties and the large cash hoard they have created. So we sold our Alderon stake and bought more Altius with it.

We have discrepencies in numbers here because what we are discussing is not knowledge on the street. This quarter will be a blow out quarter (and more balance sheet clarity) as we know from Alderon's developments...we see that continuing...

But we also see the other projects coming to fruition...We would like to see St. Georges Potash developed and the Oil Shales in New Brunswick developed...

As Rick Rule has said it makes us giddy to see what is possible with this management and these assets. Alderon is one of many and that is why we own Altius. We finally got the opportunity to buy Real mining assets from a company without capex and that have done very much the same thing Leucadia has done. Except their younger... smaller(easier numbers) and have new opportunities...and similar performance records over the last 10 years...to the legendary duo at Leucadia.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Mungerville on February 13, 2011, 02:22:00 PM
Thanks for taking the time Dazel. It looks like there are good backers/management in place at both Alderone and Altius. Its nice to know that the people at Alderone have already done this once before and are looking to do it next door again.

Title: Re: ALS.TO - Altius Minerals
Post by: woltac on February 13, 2011, 04:59:03 PM
How can I purchase Altius in the US?  I can get a quote using ALS.TO in my Fidelity account, but the symbol is not recognized when I try to preview an order.  Is ATUSF the same company listed on the pink sheets?
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on February 13, 2011, 05:02:55 PM
So Dazel, management has hit a few home-runs in the pasts years and that is great. Could these successes be attributed by pure luck?

There is plenty of PHDs in geology and very experienced individuals that are very competent at what they do and still did not get the same results. So what makes this management so much more capable then others? What "sigma" would they be considered if looked purely on a statistical standpoint?

BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 14, 2011, 05:23:56 AM

"Is ATUSF the same company listed on the pink sheets?"

Yes.

the pink sheet volume and price movement has been leading the cdn share price.

Rick Rule and Global Resource Investments are American....just for your information.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Myth465 on February 14, 2011, 05:30:27 AM
I bought the pick shares, thanks again for the play.

This inmo is the best way for a value investor to learn about mining. I hope to hold for several years and hope the commentary and other details give me a crash course as well as a decent return.

Thanks again.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 14, 2011, 05:36:32 AM
BeerBaron,

As far as Sigma's I am incapable of answering that question from a geology standpoint. From a total return standpoint they are in the top percentile. I believe their average return per annum over 10 years is 37%..so from a business standpoint they execute well. Their cash hoard is self generated where as most companies with  these of levels of cash are from share issues. They are extremely disciplined with their cash...

Did they get lucky? I think they are getting lucky like Leucadia does. I would give the edge to Leucadia in business...but not geology...Altius has both.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Partner24 on February 14, 2011, 06:06:53 AM
I've never studied any company in that field before (except Leucadia, but that's just a part of their overall conglomerate), so my questions might be dumb, but they look like opportunistic and disciplined value investors in their field:

- Does a part (or a significant part) of their success might be related to the tailwind that this sector had over the last years (i.e. price increases in the ressources sector)?

- If we have a bubble in the ressources sector like some value investors think, wouldn't that hurt Altius significantly? I know they have treasuries and cash, but as far as I know more or less 30% of their market cap.

Title: Re: ALS.TO - Altius Minerals
Post by: Myth465 on February 14, 2011, 06:24:34 AM
I am probably not qualified to answer this (having spent much less time on this then most of you all), but similar to LUK a pullback in the general economy or thier respective industry (minerals and mining) is ganna hurt them as well as everyone else.

They seem to be spread around though and appear to be excellent value investors. Similar to LUK it appears that they are picking up assets for pennies on the dollar, and more of them workout then not. I dont think you have to know much to invest with these guys.

If any of those mines with royalty interests start producing we could have a nice reoccuring revenue stream, you also have a refinery which is carried at zero but could be worth multiples (everyone seems to believe we need more of these in NA), and several other assets. The company reminds me of this Munger / Pabrai quote.

Mohnish Pabrai - Heads I win, tails I don’t lose much. Make big bets when the downside is small and the upside is large.

Charlie Munger - You’re looking for a mispriced gamble. That’s what investing is. And you have to know enough to know whether the gamble is mispriced. That’s value investing.

I dont know much, but this gamble looks mispriced.

If you dont have a firm valuation of Alderon or insight into the other assets (basically you need to be a Geologist or know one) then be honest with yourself - You are gambling  ;D. I know I am, but the odds look good  :-*. I plan to start small 3%-4% and will scale up as I get to know these guys and know more about mining.

Also a downturn would allow them to buyback stock or pickup other cheap assets. Thats the beauty of a company run by owner managers, with excess cash. They can turn lemons into lemonade.

----

Thats how I view the investment.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 14, 2011, 07:51:22 AM

When I refer to Leucadia...I am referring to their entry into the commodity world...over the last 10 years. They stated they (leucadia) believe in everything that Jim Rogers is saying...I do to...However, I am very much involved in watching Fairfax's deflationary defense (and as you have seen we have held very big positions in FFH-and plan on doing so in the future)...so in my world I will hedge when appropriate.

Altius entered earlier 1997...

Partner24,

As i mentioned at the start of this thread It has been difficult for me to own "mining companies"...I do not look at Altius as a miner...we do not have capex risk...yes with a commodity downturn...the shares will drop..that would be a longterm benefit...as the longerterm cycle will not be broken in my mind...

Fairfax have large positions in commodities...but because they are an insurance company they need to be cashflow and event hedged...

Leucadia went all in and got their head handed to them (2008)...but as you have noticed they held Fortesque and Inmet...and still do..these two companies alone make up half the  market cap...so I see less risk in Altius than Leucadia...
Leucadia also has a lot of debt...with negative cashflow...
Altius 0 debt and cashflow is now picking up-Royalties.

Hope that helps.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Eric50 on February 14, 2011, 08:57:53 AM
Dazel - thanks for sharing. I spent my weekend reading about Altius. This is a very very good idea.

Eric
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 14, 2011, 01:23:13 PM


Alderon closed at $4.05 today a 52 week high...market cap is now $286m.
for those that bought it...congrats...I know some of you sligh investors did.

as for the Altius shareholders..this was on the 2009 books at $1.3m!!!!!! The former Thompson
consolidated invstors have spent $10m on drilling I believe...not a bad return already!

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on February 16, 2011, 09:57:20 AM
Thanks Dazel, I just bough about a 5% position in Altius. I believe it's the first time I buy a stock recommended on this board (except FFH & BRK) and it's also my first time buying commodities.

I bough it as a jockey stock. I see it as a closed end fund selling at par value.

BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: Thrifty3000 on February 16, 2011, 03:27:58 PM
Good article about Alderon in Mining Weekly:

http://www.miningweekly.com/article/iron-ore-junior-alderon-sees-interest-in-canadian-project-2011-02-11

A few highlights:

"Iron-ore junior Alderon Resources, which has a project on the Labrador-Quebec border, has already been seeing interest from Asian steelmakers which want to buy a stake in the company, CEO Mark Morabito said on Thursday."

“There is no question in my mind that we will be able to conclude a deal with a Chinese or Asian steel concern once we have completed a resource update, scoping study and the metallurgical programme,” Morabito said in an interview.

“They’re already approaching us and we have had a lot of interest.”

"By the second quarter of 2012, Alderon plans to publish a feasibility study, with first production arriving by mid-2014. Output was planned at 8-million tons yearly, though Morabito said this could rise if more resources were identified."

"Morabito said this has sparked interest in the region from other Chinese steel companies keen on securing supplies outside the big-three producers – Vale, Rio Tinto and BHP Billiton."

“The Consolidated Thompson deal with Wisco opened up the eyes of their competitors. We’re already sharing information with some of them,” he enthused.

"Given that the Vancouver-based company has three former senior Consolidated Thompson bosses on its board – Stan Bharti, Bruce Humphrey and Brad Boland – and that its property is next to Consolidated Thompson’s mine, market watchers have called Alderon “the next Consolidated Thompson”.

“I don’t see why not, conditions are better for us than were for them and we’re closer to the railway line. Why would we not be in a better position than them?” said Morabito.
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on February 27, 2011, 01:51:21 AM
I have investigated this company and I am very impressed so far. It was very interesting to follow Paul Van Eeden's comments on this company over the years (through internet resources):
- Dalton seems to be very good at timing commodities - his uranium projects in 2003. Iron ore today etc...
- He has diversified his land holdings into all kinds of commodities - energy - rare earth metals - uranium - nickel included among others. So that his ability to unlock value at the right moment is already supported by the existing properties and prospects.
- He is very risk averse and sells some of his holdings early into cash and converts some into royalties also. He did it over and over again.
- There has already been around 4 bonanza projects already where Altius converted hundreds of thousands of dollars or a few millions into 10s to 100s of millions in short periods of time (sometimes below 10 months!). Absolutely amazing.

About Alderon: They aim to delineate a 600 to 800 MT resource in Q1 2011 (already has 500MT). Results are beyond expectations so far. If we take a conservative 100$/T price for the iron ore and the 3% royalty, estimating it can get financing for 16 MT/year (800MT in 50 years), the royalty stream will be 48 M$ per year. That for more than 40 years is worth above 1B$ of present value. Coupled with the equity stake, Altius gain may have a 2B$ value (Consolidated Thomson has a market cap close to 4B$ with a little above 800MT of resources and is upgrading to 16MT production by 2013). Off course we need to be very conservative but I DO understand Dazel's excitement very very well now.

Milrock seems to be doing pretty well too. There are also many other iron ore projects and they got Rio Tinto on one of them.

It really does look like a gem and it still looks pretty cheap. Plus no debt, gobs of cash and a risk averse management in a risk averse business model. I also believe that Paul van Eeden will bring additional contacts and will do additional prospect generation for Altius.
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on February 27, 2011, 02:00:38 AM
I meant 600-800MT by Q2 2011 for Alderon.
Title: Re: ALS.TO - Altius Minerals
Post by: txlaw on February 27, 2011, 09:07:25 AM
Dazel, I'm using a small stake in this company to try to expand my circle of competence into natural resources businesses.

Thanks so much for sharing this idea.  Very generous of you.
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on February 27, 2011, 12:05:44 PM
Dazel, have you been able to put your hands on the feasibility study for the oil refinery?

BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on February 27, 2011, 06:02:35 PM
About iron ore prices: http://www.ft.com/cms/s/0/b1d72b68-42a5-11e0-8b34-00144feabdc0.html#axzz1FDHZCTSj
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on February 27, 2011, 08:06:37 PM
I "drank the cool-aid" and took a small position in this company a while ago as well.  Also the first time I have ever used an idea from here.

Guys on this forum posted an interesting update on the recent Alderon activity:

http://www.stockhouse.com/Bullboards/MessageDetail.aspx?p=0&m=29099925&l=0&r=0&s=ALS&t=LIST

Thanks Dazel

Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 28, 2011, 04:10:54 AM

"Dazel, have you been able to put your hands on the feasibility study for the oil refinery?"

I have the NLRC at 0 in my analysis...even though I think a liquidation would bring something. So I have not gone into it too much. Dalton says that no one has been able to argue that the numbers do not work....It is designed for diesel fuel and is intended to be shipped to Europe...from what I recall.

If there is anything positive that comes out of NLRC..Altius shares will sky rocket..I am not counting on that which is why I call it a call option and price it as out of the money right now.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on March 07, 2011, 07:19:27 AM

I expect quarterly results out on or before March 17th...should explain a lot to the public.

Also expect Alderon to release their reserve measurement anytime as well....

I would like Altius to give some comment  to their other potential projects and where they are...but obviously they are busy with NLRC and Alderon right now...this info is very public.

Of special interest to us is St. Georges Potash and the Oil shale's in New Brunswick...we think these are unknown to the public...in this environment we think this could generate a lot of partnership interest.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on March 07, 2011, 12:20:09 PM
Dazel,

Quote
Of special interest to us is St. Georges Potash and the Oil shale's in New Brunswick...we think these are unknown to the public...in this environment we think this could generate a lot of partnership interest.

What do you think about the uranium projects (Notakwanon and Boxey Point for example)?
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on March 07, 2011, 02:24:40 PM


All I know about their uranium holdings is what they did with their last uranium project...that produced a $200m plus gain and a 3 % sales royalty (not started yet). Uranium and all of their projects are now in play with the global oil and commodity boom. I am not qualified to know what they are worth otrher than to compare similar resources close to where they are. It seems that Potash and Oil are in vogue and when that happens their is financing money to be had...that follows the Altius model...that is where I would be focusing...however, these guys are way smarter than me with regards to resources and I get that for free..so I will wait.

Shareholders might be interested in the New millineum capital story...Tata steel has agreed to finance their Labrador project...Their market cap is $680m...for about the same amount of Iron ore...that Alderon says they have (estimate should be out soon)..the Tata project is further ahead but Alderon thinks they can raise their estimate of iron ore with 2011 drilling that has been successful so far...

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on March 07, 2011, 05:35:12 PM
Shareholders might be interested in the New millineum capital story...Tata steel has agreed to finance their Labrador project...Their market cap is $680m...for about the same amount of Iron ore...that Alderon says they have (estimate should be out soon)..the Tata project is further ahead but Alderon thinks they can raise their estimate of iron ore with 2011 drilling that has been successful so far...

Dazel.

Yeah I heard about it on my drive from work, pretty good news. Maybe you could shed some light in terms on deposit concentration are both mines comparable? What about distribution, I heard Tata plans to make a 300km pipeline, would the equivalent be needed for Alderon? So if I understand correctly Alderon is 1 year behind New Millenium?

BeerBaron

Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on March 07, 2011, 11:16:58 PM
Paul van Eeden has invested in Miranda Gold a prospect generator in gold projects for the joint venture with Altius (2260761 Ontario Incorporated)
I believe he is also involved with Evrim Metals and I would not be surprised if he bought shares also. Looking at Evrim, they have lots of Gold/Silver projects.

MIRANDA GOLD CORP. ("MAD")
BULLETIN TYPE:  Private Placement-Non-Brokered
BULLETIN DATE:  October 29, 2010
TSX Venture Tier 2 Company

TSX Venture Exchange has accepted for filing documentation with respect to a Non-Brokered Private Placement announced September 27, 2010:


Number of Shares:   1,000,000 shares 
     
Purchase Price:   $0.50 per share 
     
Warrants:   1,000,000 share purchase warrants to purchase 1,000,000 shares 
     
Warrant Exercise Price:   $0.75 for a two year period 
     
Number of Placees:   1 placee 
     
Insider / Pro Group Participation: 
   
   Insider=Y / 
Name   ProGroup=P    # of Shares 
2260761 Ontario Incorporated (Paul van Eeden)   Y   1,000,000 

Pursuant to Corporate Finance Policy 4.1, Section 1.11(d), the Company must issue a news release announcing the closing of the private placement and setting out the expiry dates of the hold period(s). The Company must also issue a news release if the private placement does not close promptly. Note that in certain circumstances the Exchange may later extend the expiry date of the warrants, if they are less than the maximum permitted term.

Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on March 08, 2011, 06:18:28 AM
"Yeah I heard about it on my drive from work, pretty good news. Maybe you could shed some light in terms on deposit concentration are both mines comparable? What about distribution, I heard Tata plans to make a 300km pipeline, would the equivalent be needed for Alderon? So if I understand correctly Alderon is 1 year behind New Millenium?"

BeerBaron,

I will wait until Alderon's  national 43-101 resource estimate is out...which should be any day..
here is the link to what they are expecting which would be larger in size than The New Millineum project...with the 2011 drilling included.
 
http://alderonmining.com/_resources/news/2011-02-03-NewsRelease.pdf

I will look at grades etc when the 43-101 is out. We think this will be a catalyst for both Alderon and Altius...because the brokergae houses will be all over them to raise funds and get the fees from the offering and debt or linking a partnership like the one talked about above with Tata steel...and therefore it will bring more coverage to both stocks. In Altius case bring "some" coverage..there is not one analyst covering it!

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: roughlyright on March 08, 2011, 11:46:16 AM
Dazel,

This is a good find. I have also taken a position in Altius.

I kept doing more research on 'Prospect generators'. I came across this file that compares various prospect generators from the website of Altius. But the trouble is it is dated. Did you do any work in looking at the other such companies, like Almaden (which is also praised by Rick Rule)? can share any other ideas on Prospect generator companies?

Title: Re: ALS.TO - Altius Minerals
Post by: Mungerville on March 08, 2011, 02:17:10 PM
Dazel,

I am invested as well. So its going to be your fault when I make money on Altius.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on March 09, 2011, 07:53:12 AM

Alderon and Millrock were two of the 3 top picks on BNN yesterday....

funny that people look at the Altius subs and it is "never" mentioned anywhere. Someday.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: bathtime on March 09, 2011, 09:29:46 AM
Alderon halted at 2.39 - trading error?
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on March 09, 2011, 10:13:41 AM

see it do not know...

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on March 09, 2011, 11:30:43 AM

Trades....3.85...2.80..2.39..3.63...

obviously a trading error..wish I was paying attention.
current $3.55

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on March 09, 2011, 01:33:57 PM

http://finance.yahoo.com/news/Alderon-Clarifies-March-9-iw-1449822508.html?x=0&.v=1

Alderon's statement.
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on March 09, 2011, 07:50:38 PM
The price action on Alderon was definitely strange.  I guess they decided to cancel all trades below $2.80?  I also couldnt find any explanation concerning the nature of the "trading error."  When this happened to Accenture, P&G, etc. last year, I never fully understood what the exchanges did to "fix" the problem.  On the surface this seems similar, but on a smaller scale.   Hopefully, there will be some kind of clarification...

Also, thought I would post another general article on the iron-ore area:
http://www.financialpost.com/news/Iron+cusp+Canada/4400000/story.html
Title: Re: ALS.TO - Altius Minerals
Post by: Thrifty3000 on March 11, 2011, 08:48:20 PM
Alderon Retains Renmark Financial Communications:
http://www.alderonmining.com/_resources/news/2011-03-11-NewsRelease.pdf
Title: Re: ALS.TO - Altius Minerals
Post by: Thrifty3000 on March 14, 2011, 06:49:59 AM
Altius reports 3rd quarter earnings of $2.38 per share.

http://www.altiusminerals.com/files/PR%20Q3%20F2011%20Mar%2010%202011.pdf
Title: Re: ALS.TO - Altius Minerals
Post by: value-is-what-you-get on March 14, 2011, 06:59:43 AM
Alderon Retains Renmark Financial Communications:
http://www.alderonmining.com/_resources/news/2011-03-11-NewsRelease.pdf

. . . and from the Renmark website they also represent Fibrek! 

A seemingly random one degree of separation - or is it confluence?
Title: Re: ALS.TO - Altius Minerals
Post by: Myth465 on March 15, 2011, 07:08:52 AM
This is available in the US as ATUSF. Just double checking that this is the same company.

I own via that ticker if it helps. Anyone buying. What a crazy fall.
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on March 15, 2011, 09:25:33 AM
I'm not sure why the fall.

Is it Uranium exposure?
Is it overall commodities going down?
Is it Q4 results?

BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on March 15, 2011, 10:53:03 AM
I am tempted to buy more. It seems it fell along with commodities and commodity stocks and that investors are totally ignoring what's happening at Altius.
Title: Re: ALS.TO - Altius Minerals
Post by: Shane on March 16, 2011, 07:22:33 AM
I bought a small position yesterday, seemed like emotional trading as all of my commodity equities dropped but the largest recovered nicely... to me that says that the stocks without much coverage will come back over the next little bit.  Uranium exposure probably hurt.

BTW does anyone have an idea of the potential revenues from the non Voisey Bay royalties?
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on March 16, 2011, 09:02:25 AM

sorry guys away....we were buyers yesterday....

dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: tengen on March 16, 2011, 09:31:10 AM
sorry guys away....we were buyers yesterday....

Same here.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on March 17, 2011, 08:21:14 AM

As we know...the market participants rarely do any homework...and in a panic everything is sold which we saw...Altius "SOLD"..."SOLD" their large Uranium deposit for a large profit $200m..but those in the market rarely care at a time of crisis. So yeah not very liquid...and a panic in company that used to hold a great deal of uranium..it was a fire sale...and still is.
we are trading at near cash levels...(assuming Alderon up 10% yesterday) is included in marketable securities..Huge amounts materials will be needed for Japan's rebuild...on top of iron ore record prices..they are in the sweet spot with Alderon..and I was impressed with their focus on their latest partnership with Cliffs..They think they have found more highly probable spots of iron ore in Labrador which already is in the view of the iron ore world...we like the opportunity.
Alderon should have their first resource estimate..in the next week or two..we expect the investor community to view this for what it is a resource company with loads of cash and no debt...they likely be viewed as an iron ore company (in the Labrador rich area) rather than it is past roots in uranium. We got crazy prices on Tuesday.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Myth465 on March 17, 2011, 08:35:33 AM
I bought today. Figured the Uranium was the reason. Bought 25% more and may keep adding. I am simply adding to my holdings during this selloff and am buying the companies which have gone down the most.

Thats this and ATPG. Both appear to have material catalyst.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on March 18, 2011, 07:06:28 PM
I have bought as well for my tax deferred account.

I am thinking of adding some to my taxable account---I normally would like something I can hold for 10 years or so---do you guys think ALS.TO is something that could be held longterm? say over 10 years?...I am thinking that as a owner/jockey type of holding that it would be.

Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on March 21, 2011, 06:40:07 AM
"I have bought as well for my tax deferred account.

I am thinking of adding some to my taxable account---I normally would like something I can hold for 10 years or so---do you guys think ALS.TO is something that could be held longterm? say over 10 years?...I am thinking that as a owner/jockey type of holding that it would be."

........
If you owned for the last 10 years you would have done 32% a year...I hate to look in the rearview mirror but it is much less than half of where it was in 2007...

and you have many future catalysts...Alderon, NCLS, short term.

Dazel.

Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on March 21, 2011, 02:24:38 PM
Thanks Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on March 30, 2011, 11:42:33 PM
Altius just announced a buyback program for about 5% of the company's shares. They bought back shares before at prices around 5.3 to 6$ per share. They probably believe their shares are deeply undervalued.

http://www.altiusminerals.com/files/PR0211-NCIB.pdf
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on March 31, 2011, 11:44:07 AM

I have been waiting for the 43-101 resource estimate to make more comments should be soon. We have been
picking away at these levels.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Mungerville on March 31, 2011, 01:12:30 PM
Looks like just a standard yearly buyback program announcement. Doesn't seem to necessarily mean they will buy anything back this year only that now that they got the disclosure out of the way, they could be opportunistic at any time this year. Just seems like good standard practice and not necessarily an indication of absolute intention to buy back.

Don't get too excited.
Title: Re: ALS.TO - Altius Minerals
Post by: Mungerville on March 31, 2011, 01:14:44 PM
Did I mention that I'm in on this one, so when I finally make money on it (maybe sometime after the upcoming market crash), it will be Dazel's fault.
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on March 31, 2011, 01:35:10 PM
Quote
Looks like just a standard yearly buyback program announcement. Doesn't seem to necessarily mean they will buy anything back this year only that now that they got the disclosure out of the way, they could be opportunistic at any time this year. Just seems like good standard practice and not necessarily an indication of absolute intention to buy back.

Don't get too excited.

I do not get too excited. But knowing Dalton's history he must be seeing some undervaluation here.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on March 31, 2011, 06:08:29 PM
Excellent thread. Thanks everybody, and especially Dazel!

Update: Okay, I took the plunge and initiated a small position in ALS. You guys are making it very hard for me to stick to my initial game plan by having so many good ideas!  ;D
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 05, 2011, 06:50:41 AM

http://finance.yahoo.com/news/Alderon-Announces-Initial-iw-998138306.html?x=0&.v=1

Alderon has under promissed and over delivered...their stated public goal was 400 to 500 million tonnes at grades of 28 to 30 %...their 43-101 released this morning came in at over 600 million tonnes at grades above 30%. This is extremely positive as they are now drilling for the next update expected in June 2011...Their stated goal was to bring the resource estimate to 600 to 800 million tonnes. They will be starting at the 600 million tonne estimate...

more later.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on April 05, 2011, 12:12:28 PM
I'm not quite sure how to evaluate the value of the difference, but it does sound like a pretty big deal (in a positive way). Thanks for the update.
Title: Re: ALS.TO - Altius Minerals
Post by: value-is-what-you-get on April 05, 2011, 01:23:02 PM
wrt Alderon value, I did a real simple comparison and as Buffett says "it sort of jumped off the page" at me.

Neighbour Consolidated Thompson got $4.9 billion for about 990 million tonnes.  That's about $4.95 a tonne.  $4.95 x 500 million = $2.475 billion

Consolidated are a producing mine so I looked at the cost of building that to be around $1 billion.  Leaves $1.475 billion.

Then I figured that because I probably made some incorrect assumptions and would like a nice margin of safety  I'll divide that in half.  Leaves $737.5 million for 500 million tonnes. 

That's about 2.5x current market cap and that's when it just sort of jumped off the page!

Any further resource increase is just more Margin of Safety above that figure.

Downside is if Iron Ore tanks - who knows??  Not me, but it looks pretty good so far!
Title: Re: ALS.TO - Altius Minerals
Post by: Myth465 on April 05, 2011, 01:54:28 PM
wrt Alderon value, I did a real simple comparison and as Buffett says "it sort of jumped off the page" at me.

Neighbour Consolidated Thompson got $4.9 billion for about 990 million tonnes.  That's about $4.95 a tonne.  $4.95 x 500 million = $2.475 billion

Consolidated are a producing mine so I looked at the cost of building that to be around $1 billion.  Leaves $1.475 billion.

Then I figured that because I probably made some incorrect assumptions and would like a nice margin of safety  I'll divide that in half.  Leaves $737.5 million for 500 million tonnes. 

That's about 2.5x current market cap and that's when it just sort of jumped off the page!

Any further resource increase is just more Margin of Safety above that figure.

Downside is if Iron Ore tanks - who knows??  Not me, but it looks pretty good so far!

I really like the way you look at things.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on April 05, 2011, 02:21:03 PM
I really like the way you look at things.

I second that!
Title: Re: ALS.TO - Altius Minerals
Post by: Thrifty3000 on April 05, 2011, 03:51:39 PM
On its website Consolidated Thompson has a nice timeline/summary of how the $4.9 billion dollar deal played out.  I find it a useful reference for understanding Alderon's process and prospects:  http://www.consolidatedthompson.com/s/History.asp (http://www.consolidatedthompson.com/s/History.asp)
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 05, 2011, 06:30:09 PM

You guys have beat me to the punch on Alderon...you can see the excitement Altius management sees...It is early in the Alderon project but what is being missed is the 3% royalty (more on royalties later) that Altius owns in addition to it's 40% ownership of Alderon....just like Leucadia's royalty at Fortesque it was nothing and then...pure cashflow...We think that these income streams from future royalty streams are being completely ignored.

example: today's prices
Altius market cap     $394m 0 debt.
Alderon shares32m   $130m
cash equivalents      $200m
The company is trading for $64m...That looks like more of a financial company than a resource company does it not? That is what the market is pricing but what about the other assets?


Royalties of interest
Voisey Bay
We have asked management what it would cost them to buy another 10% stake in the Labrador Nickel Royalty limited partnership that they already own. That way we will find out
what it costs in the market. It covers the entire Voisey bay area so if Vale were to discover further resources, the Royalty rises with output...without any exploration cost. Voisey Bay is the low cost producer in the world with a massive resource base that Vale figures will operate for 30 years with out additional resource finds. After looking at what these royalties cost in the market place..we are convinced that this asset is being ignored. altius is an expert when it comes to royalties as shown by their astute purchase of IRC (International Royalty Corp in 2009) They made $31m on it in 6 months. How did they know it was undervalued? Because IRC was a major holder of the same partnership above. So what's the value?
http://www.altiusminerals.com/lab_nickel.php

Alderon
So what would the 3% Alderon royalty be worth if The Consolidated Thompson model is followed through. That would likely make the royalty that is being valued at less than 0 worth more than the entire market cap of Altius.


Central mineral belt
2% gross sales and 2% smelter..now owned by Paladin..
http://www.altiusminerals.com/aurora.php
                           
Cliffs Natural Resources
They purchased of Consoldidated Thompson for $5 billion...Altius signed an exploration agreement with them in December..Do you think they know Alderon is next door to Consolidated Thompson? They are a big global player. Altius does not usually do projects with large companies but this relationship can't hurt.
http://www.altiusminerals.com/cliffs_natural_resources.php

Having said that...
Rio Tinto partnership-Labrador Iron Ore
http://www.altiusminerals.com/labrador_iron_ore.php

Rio Tinto is a 58% owner of the The Iron Ore company of Canada, 26% Mitsibushi, 15% Labrador iron ore royalty(2.65b market cap) other the other owners. They have produced a billion tonnes of iron ore in the district which has been around since the 1950's..they have 2.5 billion tonnes in reserves...So they are in partnership with the big boys of the area and in contact. We assume that these players are very aware of what these properties are worth and these are the deepest pockets in the world. As discussed earlier New Millenium was taken out by Tata steel for big bucks in the same region.

Energy opportunities
at $105 oil this could be very interesting
http://www.altiusminerals.com/albert_oil_shale.php

NLRC has until October 2011 to sell or finace the refinery project..If they are able to pull off something of value here it would be huge for the stock price as the market still sees this as disasterous for Altius..they forgot to look at the other assets!
http://www.altiusminerals.com/nlrc.php

There are numerous other projects that I did not mention including many gold assets including Rambler that will start producing gold this quarter..but i do not know what they are worth..more than 0! We see the above projects as potentially huge for the company. Now that 43-101 is out for Alderon and it was extremely positive (we are not geologists!!) we have greater conviction that the $64 million the market is valuing this company at is crazy! As was said earlier it jumps off the page at us!
disclosure:We are very biased! and own a large chunk of Altius...

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on April 05, 2011, 07:59:18 PM
"Alderon
So what would the 3% Alderon royalty be worth if The Consolidated Thompson model is followed through. That would likely make the royalty that is being valued at less than 0 worth more than the entire market cap of Altius."

I was just trying to come up with a number for the value of this royalty.  Using pretty conservative assumptions of: 1) 8MT annual production, 2) long-term $100/ton 66% iron price in Canada, 3) production starts in 2015, 4) 25 year mine life and 4) a 12% discount rate, I get a present value of around $120m today (and $190m in 2015), unless my math is wrong.  I guess for the Royalty it doesn't really matter if they follow the "CLM" model for the financing, all that matters is that the mine actually goes into production.  So, at this point, considering the location, management, low capex etc...what would you estimate the probability is that the mine doesn't go into production?  Aside from a sudden collapse in iron-ore prices and/or the economy what other event(s) would prevent development?  I am having a hard time coming up with scenarios that would stop continuing development...

Also, Dazel, do you have any idea what type of financing Alderon will wind up getting?  I feel like in this environment they should be getting a deal similar to or better than what CLM got with WISCO, but I really have no idea...either way, it seems like Altius will sell the shares at some point, and just keep the royalty??

and, yeah, if iron ore prices stay where they are now, and the mine goes into production, then in 2014 or so, the Royalty could be worth more than the entire market cap...

Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on April 05, 2011, 08:28:19 PM
Dazel, do you have a sense of the likelihood of Altius getting acquired within a few years vs that they remain independent and keep growing with the model that they've used so far?

Their model is so brilliant and well executed so far, I would actually be sad to see them swallowed up, even at a nice premium.

Do you think that only their spin-off companies would potentially be acquired, with Altius itself staying independent? Do you have any insight on what the management thinks about these possibilities? Are they eyeing an exit the way that most startups are, or are they aiming at growing Altius indefinitely (in the same way that Watsa wouldn't sell FFH)?
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on April 05, 2011, 09:06:09 PM
"Neighbour Consolidated Thompson got $4.9 billion for about 990 million tonnes.  That's about $4.95 a tonne.  $4.95 x 500 million = $2.475 billion"

I have been looking through the Consolidated Thompson filings, and I think they have at least 826 million tonnes at the Bloom Lake properties and 934 million tonnes at the Lamelee & Peppler properties, for a total of 1,760...
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 06, 2011, 05:07:32 AM

We have not talked to management.

We have very recently sent a detailed long email to Brian Dalton outlining our thoughts and strategic directions we see Altius taking.

Everyone is for sale at a price. We think it is possible for a large partner like Leucadia-Sprott to buy a big stake in the company but we do not see
an outright sale. Pure speculation on our part.

They need to be very smart now...because dilution is their friend and enemy at Alderon...the 5% they have diluted already has cost them about $5 million. However, raising funds are essential to moving Alderon to production. They want production for their 3% royalty to kick in. If CNR were to buy Alderon for the reserves they could
sit on them for years...needs to be the right buyer. But as we know anyone will sell at a price. Now that 43-101 is out they will be negotiating with the whole iron ore world. We are extremely confident in management in this capacity. They are the expert in Labrador. 

We would like more resources (people-project managers) put towards their other projects as outlined previously they all have the potential of being the next Alderon. This asset was worth $1.5m on the balance sheet this time last year!!!! The market cap yesterday was $271m ($138m-3% royalty-their portion)!!!! Not a bad return already! You can see our excitement with the other projects.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: jegenolf on April 06, 2011, 06:32:37 AM

You guys have beat me to the punch on Alderon...you can see the excitement Altius management sees...It is early in the Alderon project but what is being missed is the 3% royalty (more on royalties later) that Altius owns in addition to it's 40% ownership of Alderon....just like Leucadia's royalty at Fortesque it was nothing and then...pure cashflow...We think that these income streams from future royalty streams are being completely ignored.

example: today's prices
Altius market cap     $394m 0 debt.
Alderon shares32m   $130m
cash equivalents      $200m
The company is trading for $64m...That looks like more of a financial company than a resource company does it not? That is what the market is pricing but what about the other assets?


Royalties of interest
Voisey Bay
We have asked management what it would cost them to buy another 10% stake in the Labrador Nickel Royalty limited partnership that they already own. That way we will find out
what it costs in the market. It covers the entire Voisey bay area so if Vale were to discover further resources, the Royalty rises with output...without any exploration cost. Voisey Bay is the low cost producer in the world with a massive resource base that Vale figures will operate for 30 years with out additional resource finds. After looking at what these royalties cost in the market place..we are convinced that this asset is being ignored. altius is an expert when it comes to royalties as shown by their astute purchase of IRC (International Royalty Corp in 2009) They made $31m on it in 6 months. How did they know it was undervalued? Because IRC was a major holder of the same partnership above. So what's the value?
http://www.altiusminerals.com/lab_nickel.php

Alderon
So what would the 3% Alderon royalty be worth if The Consolidated Thompson model is followed through. That would likely make the royalty that is being valued at less than 0 worth more than the entire market cap of Altius.


Central mineral belt
2% gross sales and 2% smelter..now owned by Paladin..
http://www.altiusminerals.com/aurora.php
                           
Cliffs Natural Resources
They purchased of Consoldidated Thompson for $5 billion...Altius signed an exploration agreement with them in December..Do you think they know Alderon is next door to Consolidated Thompson? They are a big global player. Altius does not usually do projects with large companies but this relationship can't hurt.
http://www.altiusminerals.com/cliffs_natural_resources.php

Having said that...
Rio Tinto partnership-Labrador Iron Ore
http://www.altiusminerals.com/labrador_iron_ore.php

Rio Tinto is a 58% owner of the The Iron Ore company of Canada, 26% Mitsibushi, 15% Labrador iron ore royalty(2.65b market cap) other the other owners. They have produced a billion tonnes of iron ore in the district which has been around since the 1950's..they have 2.5 billion tonnes in reserves...So they are in partnership with the big boys of the area and in contact. We assume that these players are very aware of what these properties are worth and these are the deepest pockets in the world. As discussed earlier New Millenium was taken out by Tata steel for big bucks in the same region.

Energy opportunities
at $105 oil this could be very interesting
http://www.altiusminerals.com/albert_oil_shale.php

NLRC has until October 2011 to sell or finace the refinery project..If they are able to pull off something of value here it would be huge for the stock price as the market still sees this as disasterous for Altius..they forgot to look at the other assets!
http://www.altiusminerals.com/nlrc.php

There are numerous other projects that I did not mention including many gold assets including Rambler that will start producing gold this quarter..but i do not know what they are worth..more than 0! We see the above projects as potentially huge for the company. Now that 43-101 is out for Alderon and it was extremely positive (we are not geologists!!) we have greater conviction that the $64 million the market is valuing this company at is crazy! As was said earlier it jumps off the page at us!
disclosure:We are very biased! and own a large chunk of Altius...

Dazel.

According to the Q3 report, the Rambler stake is gone and the oil shale project is abandoned. Is there something more to either of those investments than what is apparent from the report?
Title: Re: ALS.TO - Altius Minerals
Post by: value-is-what-you-get on April 06, 2011, 06:37:19 AM
"Neighbour Consolidated Thompson got $4.9 billion for about 990 million tonnes.  That's about $4.95 a tonne.  $4.95 x 500 million = $2.475 billion"

I have been looking through the Consolidated Thompson filings, and I think they have at least 826 million tonnes at the Bloom Lake properties and 934 million tonnes at the Lamelee & Peppler properties, for a total of 1,760...

I stand corrected - many thanks jjsto.  That's why I like to divide things in half! 

From that scenario (i.e. reality) it looks like a reasonable price at $4 - resource being discounted about 40% as it's not a producing mine yet.  As a going concern with a 500 million tonne resource it would be around $6 a share assuming a $1 billion build cost and Consolidated Thompson sale valuation per tonne would be equalled (remember that last $1 billion in value was only realized when the company was sold!! $4/share or so premium over market).  We get to add about $2.75 a tonne (once produicing) for additional resource increases from here on.   It certainly erodes the old MOS considerably and introduces the dreaded "if"s into the equation ("if" they increase the resource by 200, 300, 400 million, "if" they find a buyer etc etc) 

I completely agree with Dazel as well that the 3% royalty is the big value here.  Doesn't matter how ADV dilutes or gets bought out or taken over or anything else - when the ore ships, ALS gets paid by whoever's selling it. 

It seemed in my initial flawed calculation that in the short term, pre-production, there was more bang to be had from ADV stock than ALS.  That is not the case.  There will be some pops followed by months of slow dwindle, dilutions, financings etc - so try to buy when the dwindle stops and before the pop - I generally don't do well on those! 

The greatest potential for large surprises to the upside clearly lies with ALS.to.

Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 06, 2011, 07:32:33 AM


"According to the Q3 report, the Rambler stake is gone and the oil shale project is abandoned. Is there something more to either of those investments than what is apparent from the report?"

thanks you are correct......costs most be too high for the oil shale...i missed that...

I left out the Potash play as well.

 Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: doc75 on April 06, 2011, 08:12:57 AM
Dazel,

I've been following this company on and off for ages, and agree completely with the competence of management.  (Paul van Eeden was always a very strong supporter.  I remember during the crazy uranium run that he was selling everything but keeping a core position in Altius.)

My greatest concern here is the fact that base materials like iron ore appear to be in a hell of a bubble -- or, at least, the prices are heavily (entirely?) dependent on continued construction in China, which appears to be a bubble.   I know the cash on the books provides a buffer, but clearly the value of Altius will be significantly lowered if/when commodities correct.

Management has made some astute moves in the past. Do you have any insight as to their view on base commodities?

For instance, do you think Dalton is itching to book a return on this "hot potato", or has management implied that they are believers in the "commodity super-cycle"?   

Thanks!
J

Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on April 06, 2011, 08:52:58 AM
My greatest concern here is the fact that base materials like iron ore appear to be in a hell of a bubble -- or, at least, the prices are heavily (entirely?) dependent on continued construction in China, which appears to be a bubble.   I know the cash on the books provides a buffer, but clearly the value of Altius will be significantly lowered if/when commodities correct.

Their model seems to deal well with that, though, no?

When things go down significantly, it allows them to pick up new projects on the cheap and if the stock also tanks, they have enough cash to do lots of buybacks.
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on April 06, 2011, 09:06:34 AM
Quote
For instance, do you think Dalton is itching to book a return on this "hot potato", or has management implied that they are believers in the "commodity super-cycle"?

In the past, Dalton has sold equity stakes conservatively and favored ownership of royalty streams and cash. I would guess he is going to sell stakes of Alderon relatively early.
I also remember that he said in an interview or shareholder letter that when the commodity cycle finally turns Altius will be ready with loads of cash and productive assets.

Yes, if there is a deep correction in the next few months to years, they will definitely be able to deploy cash into royalty streams and share buybacks. But how much higher will be the stock price when that happens also?
Title: Re: ALS.TO - Altius Minerals
Post by: doc75 on April 06, 2011, 09:15:34 AM
Their model seems to deal well with that, though, no?

When things go down significantly, it allows them to pick up new projects on the cheap and if the stock also tanks, they have enough cash to do lots of buybacks.

Their model certainly allows them to take advantage of swings in the commodities market, yes.  I'm just curious as to the view of management regarding the current situation.  

I think Altius is a great way to play the commodities market and I have a smallish stake that I bought around $10.   I'm just finding it difficult to buy more at a time when commodities are richly valued; ie. good value now would likely become great value if iron prices fall out of the stratosphere, which I think is more likely than not.  So I wonder if Dalton feels the same way and is itching to liquidate the Alderon equity.



Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 06, 2011, 10:36:21 AM


Leucadia seems to be a company of choice here on this board and we admire them a great deal..they have much more to lose as they
did in the last downturn...They own massive stakes in FMG and Inmet...more than half their assets...yet no one questions the cycle
with them!

That is my problem with the market's view of Altius....it is not a gold stock that is speculation....they have $330 million in cash and marketable securities
and 0 debt!!! Their resource projects trade for nothing! Is iron ore going to fall off a cliff tomorrow? no...might it go down for a while...yes. Will China, India and
Japan stop building? No.

This is not a gold stock...and we see far less risk here than Leucadia...we get that the marketb does not realize it yet and that is why we continue to buy.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: shalab on April 07, 2011, 06:09:18 AM
Canada is not a big producer of iron ore

http://en.wikipedia.org/wiki/Iron_ore

India, the third largest exporter, has lifted a ban on exporting the ore but FT still thinks it won't impact the price by much:

http://www.ft.com/cms/s/0/fd1b30f6-5f74-11e0-bd1b-00144feab49a.html#axzz1IqI2ct8H
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 07, 2011, 07:25:20 AM


India is fourth but who is counting....

What is important is what is going in Australia...who is the second biggest producer behind China. They have a pending 30% mining tax (summer I believe) about to go into effect. If you would like to know about the implications of this on the iron ore price take a look at FMG...Fortesque website...they are looking at stopping new production at a new mine because of the tax...
Rio Tinto and Vale are in Labrador....if the tax goes through it makes sense to go to the low cost producer.

I cut my teeth studying Fortseque to see what Leucadia saw...they were too expensive for me...their stock is being held back by the tax as is the production outlook after the tax is implemented. It makes sense to produce as much possible before it happens and then you cut back. I am not an expert in pricing but that certainly cannot hurt the iron ore price going forward.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 08, 2011, 07:51:59 PM

Brian Dalton-Response to our email...I will just give you the facts.

I asked what it would cost to buy the 10% royalty stake they have in Voisey Bay...and if it was as cheap as the market was valuing it in Altius' hands why had they not bought more?
Answers.
No one will sell to them they would buy if they could. When they did the details and metrics for  the sale of their IRC stake the Royalty price of Altius stake would be worth $200million...

The Alderon stake will be sold eventually they will stick to their plan...he explained they will not risk capital on production.
The Alderon roylaty is worth a NPV of $100million if the iron ore price were to drop in half..

He is in China so it was short..but we got the answers we wanted. We had similar numbers in our head and I think we have posted them before...using these two assets alone you almost have a double in the stock price.. we will do a detailed analysis of the values and post it soon.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on April 08, 2011, 08:01:38 PM
Very interesting, thanks Dazel.

I wonder what he's doing in China... Scouting for new Altius business? Hmm...
Title: Re: ALS.TO - Altius Minerals
Post by: Myth465 on April 09, 2011, 11:21:50 AM

Brian Dalton-Response to our email...I will just give you the facts.

I asked what it would cost to buy the 10% royalty stake they have in Voisey Bay...and if it was as cheap as the market was valuing it in Altius' hands why had they not bought more?
Answers.
No one will sell to them they would buy if they could. When they did the details and metrics for  the sale of their IRC stake the Royalty price of Altius stake would be worth $200million...

The Alderon stake will be sold eventually they will stick to their plan...he explained they will not risk capital on production.
The Alderon roylaty is worth a NPV of $100million if the iron ore price were to drop in half..

He is in China so it was short..but we got the answers we wanted. We had similar numbers in our head and I think we have posted them before...using these two assets alone you almost have a double in the stock price.. we will do a detailed analysis of the values and post it soon.

Dazel.

Thanks again Dazel. I am very jittery about resources and the state of the markets / economy in general, but I think this is an amazing find which will compound overtime. I plan to hold, learn, and Buy the Dip.

Thanks again.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on April 14, 2011, 09:34:32 PM
Some additional detail. I'm midway through my own valuation.

Fully Diluted Shares Outstanding

29,816,395 at September 13, 2010

Cash and Liquid investments

$170,000,000 (from Feb 2011 presentation by Alderon) - $5.70/share

etc...etc...

Hi Rolf,

I know it's an older comment, but I was wondering if you ever finished your evaluation and if you could share it with us? Thanks.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 21, 2011, 08:42:20 AM


It appears after some further homework that I have have made a mistake in looking at Brian Dalton's email comments on the  of the Voisey bay Nickel Royalty. I had said previosly that he had indicated that the Voisey bay Royalty was worth $200m under the IRC sale. After looking at it...It looks like he was talking about the entire royalty. That would make Altius' stake substantially lower ($20m) under that evaluation. He did indicate no one would sell more to them and that they had treid to buy merge with IRC for that royalty because of the royatly. Their was a strike at Voisey Bay when this was evalauted and the world was ending.
IRC's royalty rev's from Voisey bay for the 2007 were $47m!!!! So the evaluation looks ridiculous. This has us looking Royal Gold which Altius owns. Looks like they bought at the right time!

After doing some homework $200m is extremely low. Altius bought their stake for $13m at $3.25 nickel. They have recieved almost $20 million from this since 2003..with a two year strike in their. The price for nickel as of today is $12.10. We think the future value of this royalty will be between $120 and $210m.
future average cashflow of between $4m and $7m over 30 years gives us those amounts.
Altius royalty revs before strike.
2007-$4.3m
2008-$5.16m


We will post our full evaluation soon....sorry for the error...

For disclosure we have not sold since this post we have been buying.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on April 21, 2011, 09:32:33 AM
Thanks for the update, Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 27, 2011, 06:30:11 AM
http://finance.yahoo.com/news/Alderon-Appoints-Former-Iron-iw-2428213151.html?x=0&.v=1

Alderon is loading up. interesting that his options were priced at $3.40 (300000). Happy to see that.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on May 02, 2011, 02:39:02 PM
ALS has been falling quite a bit on the market lately. Anybody loading up?
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 02, 2011, 04:40:24 PM

We were most of the volume Friday so we will step back and hopefully get some cheaper.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Eric50 on May 02, 2011, 10:21:49 PM
Dazel -

It seems that you keep buying more and more since you've raised this idea. To assess the strength of your conviction, would you mind sharing how much of your total AUM do you have in ALS?

Feel free to ignore my question if you do not want to share that - I'd completely understand.

thanks
Eric
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 03, 2011, 07:21:28 AM


Eric,

I have a good portion of my net worth in it. This is what we like... unfortunately it is tough on some
investors. It is in our best interest to be quiet...we have played out our case. If you simply add the numbers together you can see what we see. I know it is tough on investors to see investment drops...however, historically averaging down has produced our greatest winners. Remember Fairfax. The difference here is that your down side is protected by cash and 0 debt...we see little risk...we see an investment company not a commodity company...you might want to ask yourself why Leucadia has not had the same pull back.
we still think that the market sees uranium and that is their  mistake.
good luck.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on May 03, 2011, 09:45:01 AM
Quote
we still think that the market sees uranium and that is their  mistake.

It could also be the correction in Alderon shares which was kind of expected.
And I have noticed that a lot of resource (metals) related stocks have corrected in the last week (maybe end of QE2 approaching or something...).
Title: Re: ALS.TO - Altius Minerals
Post by: Eric50 on May 03, 2011, 10:42:28 AM
Dazel -

Thanks for the kind answer. I agree with you that this is incredibly cheap - I just wanted to see how strong your conviction was. I've also increased significantly my position recently. I see many green lights:
- quality of management: Dalton has an incredible track record for his age;
- the business model is - as you've said - almost perfect: the company is exposed to mining without any capex;
- it's a way to benefit from the secular bull market in commodities with some diversification;
- from a US perspective, it's way to invest in a stronger currency:
- it is very cheap, worth at least twice the current market within a year or two.

Re the uranium perception that's weighting on the price, the price of uranium has started to increase. Hopefully that will change the perception!

Eric
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on May 03, 2011, 12:21:57 PM
It could also be the correction in Alderon shares which was kind of expected.

Anyone care to elaborate on that? Why was it expected, and what's going on there? I haven't been following Alderon too closely lately..
Title: Re: ALS.TO - Altius Minerals
Post by: Myth465 on May 03, 2011, 01:22:48 PM
Q: Do you think businesses like See’s candy, or hard assets such as railroads are superior in a inflationary world?

The first group is superior. You have the price power. The worst business is one that has a lot of receivables. Normally we were not enthusiastic with utilities and railroad. The ideal business, See’s candy, was doing $25 million when we bought it. We are doing $300 million now. We only had to plough back $30 million in the business. We don’t have receivables and much fixed assets. See’s Candy is far better.

The ideal asset is the royalty on someone else’s sale. That kind of asset is inflation protected. We deployed in utilities and railroads because we cannot find enough business like See’s.

----

This company will be a beast if they can get the assets into the right hands. LUK is minting money with that royalty. Its tough you need a buyer, but one with big pockets who can push through regardless of the commodity cycle.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 03, 2011, 03:39:43 PM
today we were the bid at $12.20..no takers...we got small amounts at $12.21...I don"t know how much more disclosure I can give! Ya pay up I know!

a couple of things...
we are alone... there is 0 coverage of Altius...plenty of coverage of Alderon...5 to 6 houses with targets all the way to $6. If it were at $5 or $6 we would
not be talking about it...It is the "new find" in Canda iron ore with that comes volatility...

Myth is right...They have two agendas....with regards to Alderon...continue forward with the successful drill program expanding the resourse and with that putting together a world class development team...this will bring up the value of Alderon.

The second and more important to us the Altius shareholders, is to find the right partner. When they sold out of the Uranium project in 2007 they used forward stock agreements to essentially give them a hedged sale price of a $200m gain in the market. The 2% NSR there maybe worth a great deal in the future but the property has changed hands now to Paladin (a stronger player) this takes time....I am sure they are now thinking why did we not go to Paladin and Cameco in the first place...The NSR may have been paid out much quicker.

We think this time they are looking to sell directly to the right partner rather than in the market. Preferably the same partner from China who made a killing for their 19% stake in Thompson Consolidated. This does two things: ensures them that the project moves ahead quickly and brings up the value of the 3% NSR on the properties. Remember that Brian Dalton has told us the NPV of the their NSR is worth $100m at half the iron ore price of today. We assume that the value then is $200m today...that is double what the value of their Alderon stake is...see what we mean. The negotiation that Dalton is undertaking in China right now would likely have priced that NSR in....why else would they know it?  We have no access to their negotiation nor have we spoken to Altius...other than the email we disclosed. Common sense tells us this is what is going on. Why not copy Thompson Consolidated completely? The other options are sell the NSR with the stake and take the money now.

Speculating...You have one announcement that changes the perception of Altius' value. That would be the successful negotiation of good terms in an Alderon deal. The market will not count the $300 million in value until it is done..the market is not counting the value the Alderon shares alone! We are willing to wait for for this type of scenario..and after it happens we will likely wait for the next one or two after that!

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 03, 2011, 04:34:25 PM

http://www.consolidatedthompson.com/i/pdf/news/july_20_09.pdf

Wisco's  19.9% stake for $240m and their guarantee of purchase of 4m tonnes of iron ore concentrate made them about $750m profit in a little over a year! plus they have secured supply.

www.wisco.com.cn/wisco_en/brief/aboutus.shtml -

They are the number 3 producer of steel in China....Dalton has lot's of options.

China producer's have been smart..they are monetizing assets while securing supply. By investing in projects they are driving up the value of those projects making a profit for themselves. But  the increase in value they bring to projects by ensuring demand is being financed by other investor's. Thompson rasied debt after they took their stake and put in future secured sales. smart all the way around

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on May 03, 2011, 05:15:31 PM
Quote
Anyone care to elaborate on that? Why was it expected, and what's going on there? I haven't been following Alderon too closely lately..

You know Alderon just went up a lot on resource announcements but now it has to find financing to go to production. If you look at similar
past cases like Thomson, the stock tends to bob up and down for a while until this is finalized.
Dazel gave very good points on finding chinese partners and selling to them instead of on the market. I had silent similar thoughts in the last few weeks.

Cheers!
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on May 03, 2011, 07:37:44 PM
Thanks Goldfinger, and thanks Dazel, your updates are always very insightful.

Cheers!

update: Wow, really going down today. -6.13% right now
Title: Re: ALS.TO - Altius Minerals
Post by: newbee on May 04, 2011, 07:50:10 AM
New comer to this Great board. Is there a reason why there is a 5% price difference between between atusf.pk and als.to 12.42 Vs 11.92. Thanks
Title: Re: ALS.TO - Altius Minerals
Post by: bathtime on May 04, 2011, 08:13:22 AM
New comer to this Great board. Is there a reason why there is a 5% price difference between between atusf.pk and als.to 12.42 Vs 11.92. Thanks

It's the USD/CAD exchange rate.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 04, 2011, 09:15:05 AM

No sugar coating boys Altius has been hit very hard. tough to watch. we feel your pain!
picking some up here.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Myth465 on May 04, 2011, 03:19:23 PM

No sugar coating boys Altius has been hit very hard. tough to watch. we feel your pain!
picking some up here.  Dazel.


I plan on holding. This seems like a set and forget kinda deal. A little pain is healthy, keeps everyone honest and filters out the rift raft. Though it still hurts. Thanks again for the updates.
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on May 04, 2011, 03:43:41 PM
The recent volatility doesnt bother me too much for two reasons:  1) I havent seen anything that would lead me to believe any of their projects are fundamentally different today than they were 3 weeks ago.  So, as long as there is no bad news from their projects (alderon in particular) this might be an opportunity for the people that bought recently to average down.  2) This is still an exploration/development type commodities company (with low cash flow relative to market cap), and a certain amount of volatility should be expected in spite of their strong balance sheet.

I plan on holding till Alderon starts producing, gets taken out, or development is for some reason delayed/halted. 
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on May 04, 2011, 04:13:24 PM
Quote
No sugar coating boys Altius has been hit very hard. tough to watch. we feel your pain!

I must be masochistic I picked up some more!
Title: Re: ALS.TO - Altius Minerals
Post by: Mark Jr. on May 04, 2011, 06:16:53 PM

Thanks again Dazel. I am very jittery about resources and the state of the markets / economy in general, but I think this is an amazing find which will compound overtime. I plan to hold, learn, and Buy the Dip.

Thanks again.

Me too. This was exacerbated by somebody sending me a communications (somebody from this board, in fact) which included this (the "we are here" was added by me)

(http://img88.imageshack.us/img88/9339/picture114u.png)

I have picked some up, I am considering adding more if this gets much cheaper. Right now I'm also holding SCP (Sprott Resource Corp) for a couple years now and these two are a sizable chunk of my exposure to resources (not counting my gold and silver).
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on May 04, 2011, 06:57:27 PM
Quote
I have picked some up, I am considering adding more if this gets much cheaper. Right now I'm also holding SCP (Sprott Resource Corp) for a couple years now and these two are a sizable chunk of my exposure to resources (not counting my gold and silver).

As an anecdote: Paul Van Eeden has been very bearish for more than 3 years now and has sold most of his investments. However he has kept his position in Altius. Now I am not saying it won't get much cheaper in a commodity crash. It will. But from where? What I mean by that is: what happens if the Alderon stake gets sold soon for a good price: the amount of cash on the balance sheet will exceed current market cap by far. In a crash they can buy royalties like nobody else...
Title: Re: ALS.TO - Altius Minerals
Post by: Mark Jr. on May 04, 2011, 07:13:43 PM
Quote
I have picked some up, I am considering adding more if this gets much cheaper. Right now I'm also holding SCP (Sprott Resource Corp) for a couple years now and these two are a sizable chunk of my exposure to resources (not counting my gold and silver).

As an anecdote: Paul Van Eeden has been very bearish for more than 3 years now and has sold most of his investments. However he has kept his position in Altius. Now I am not saying it won't get much cheaper in a commodity crash. It will. But from where? What I mean by that is: what happens if the Alderon stake gets sold soon for a good price: the amount of cash on the balance sheet will exceed current market cap by far. In a crash they can buy royalties like nobody else...


Indeed, in fact that's kind of what SCP did, they had just sold PBS Coals for a 240M profit right before the meltdown hit and they were sitting on it in cash. Their stock took a massive hit too, but they just took advantage and started putting it work.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on May 04, 2011, 07:37:27 PM
That's partly why I like Altius and bought a good amount; if things go well, they have lots of projects that get more valuable. If things go to hell, they can buy lots of undervalued assets and/or repurchase stock. Heads they win, tail they win...
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 04, 2011, 07:42:19 PM

SCP has an interesting longer term look with their farming assets and oil company but they
like ALS did not get a big return on the cash...

ALS has a greater upside because of the assets they hold...Alderon is the one they will cash in on first but you have to believe they are negotiating on the other assets as well...Their cost on the balance sheet for all projects is $4m...and Voisey NSR is $10m! That is all they have allocated to the cost of these projects....they have a huge upside..beyond Alderon.

It would be a tremendous take out target for someone to walk in take a controlling position in Alderon get the all the royalties for free..and pay yourself back with their cash...
Really if we were Leucadia and we had the cash we would be buying out the whole company...it's free...if you control it.

an aside.

Those that have not read Jeremy Grantham's new piece I suggest you do...explaining peak everything...myth posted it.

CNBC may deal in bubbles and 3 days is a long term trade! But places like China are thinking 10 and 20 years ahead. Gold, silver...peaked??I do not know. I do know that demand for iron ore will continue and at half the iron ore price today the alderon NSR is $100m...they would call that a crash if the price was half! I would take the $100m happily!
just a matter of time for Altius...The cash that has been a drag on earnings looked real good today!

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on May 04, 2011, 09:04:05 PM
Quote
Those that have not read Jeremy Grantham's new piece I suggest you do...explaining peak everything...myth posted it.

In addition you do not have a China (1.5 B inhabitants) + a Brazil + a Russia + an India + etc... building/rebuilding themselves every 30 years (even though this can be (temporarily) interrupted by severe crisis at some point in time).
Title: Re: ALS.TO - Altius Minerals
Post by: MrB on May 05, 2011, 11:47:50 AM
Wisco's  19.9% stake for $240m and their guarantee of purchase of 4m tonnes of iron ore concentrate made them about $750m profit in a little over a year! plus they have secured supply.

Dazel,
Can you break this down a bit? Is this just talk (from the co) or has cash actually been exchanged?

Thanks in advance.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 05, 2011, 12:01:53 PM


If you read the posted link you will see that the 19.9% was bought for $240m...that would give you a market cap of $1.25b...on their purchase price. They were sold for $4.9 billion (below)...it is is the final stage of closing. I have never seen a company from china reveal how much they make in these types of deals in north America. They are too smart...they obviously trust the principals that have gone to Alderon..why would they not do it again when they know they have the demand in china? Alderon is literally next door but closer to  rail and other services.

dazel.
http://www.bloomberg.com/news/2011-01-11/consolidated-thompson-potash-corp-canada-equity-preview.html
Title: Re: ALS.TO - Altius Minerals
Post by: MrB on May 05, 2011, 12:15:55 PM
Read it, but it makes no mention of the $240m. What am I missing?
Title: Re: ALS.TO - Altius Minerals
Post by: JAllen on May 05, 2011, 01:46:09 PM
Read it, but it makes no mention of the $240m. What am I missing?

http://www.consolidatedthompson.com/s/NewsReleases.asp?ReportID=382300&_Type=News-Releases&_Title=Consolidated-Thompson-and-WISCO-Announce-Closing-of-240-Million-Strategic-I...
Title: Re: ALS.TO - Altius Minerals
Post by: MrB on May 05, 2011, 02:17:47 PM
Ok, thanks. So to circle back to my original question and let's just focus on the $240m. How much cash has exchanged hands? This was a July 2009 deal, so presumably all of it, if one is to count it as profit...No?
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on May 06, 2011, 07:07:56 AM
I just increased my ALS position by 50%. This drop is a nice opportunity.

I probably timed it terribly because that's what I do, and it might drop by 20% soon, but oh well, still a bargain.
Title: Re: ALS.TO - Altius Minerals
Post by: cwericb on May 06, 2011, 07:35:20 AM
Yup, bought some more today as well with mixed feelings.

Paid $14.79 a couple of weeks ago.Paid $11.93 today. That`s a 20% drop. Since there seems to be an unwritten rule that whatever I buy takes an immediate drop, I hereby apologize to the other shareholders on this board for whatever damage my purchase does to them today.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on May 06, 2011, 11:40:41 AM
cwericb, since what I buy drops and what you buy drops, maybe those two put together will mean that it'll skyrocket? Who knows how that stuff works   ;)
Title: Re: ALS.TO - Altius Minerals
Post by: cwericb on May 06, 2011, 12:26:02 PM
Haha, its like some kind of friggin rule isn't it? Buy and the price takes a dive.
Well at least we're up a bit today so far. But it does get sort of discouraging at times. Alderon has been having a decent day as well. I don't know if commodities are leveling off or just taking a breather before they continue to drop. The only thing that gives me confidence is that the population of Asia is not going to disappear and now that they have had a taste of the good life, they are only going to want more of everything. Also I think I read today that this drop in commodities has not had much of an impact on iron ore.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on May 06, 2011, 12:34:00 PM
I just learned something about iron ore pricing, via Wikipedia:

Quote
Iron ore market
Over the last 40 years, iron ore prices have been decided in closed-door negotiations between the small handful of miners and steelmakers which dominate both spot and contract markets. Traditionally, the first deal reached between these two groups sets a benchmark to be followed by the rest of the industry.[2]
This benchmark system has however in recent years begun to break down, with participants along both demand and supply chains calling for a shift to short term pricing. Given that most other commodities already have a mature market-based pricing system, it is natural for iron ore to follow suit. Although exchange-cleared iron ore swap contracts have developed over the past few years, to-date no exchange has established a proper futures market for the largely seaborne $88 billion a year iron ore trade.[6] To answer increasing market demands for more transparent pricing, the pan-Asian multi-product commodity and currency derivatives exchange for global trade Singapore Mercantile Exchange (SMX) is planning to launch soon an iron ore futures contract, subject to regulatory approval from the Monetary Authority of Singapore, based on the Metal Bulletin Iron Ore Index (MBIOI) which utilizes daily price data from a broad spectrum of industry participants and independent Chinese steel consultancy and data provider Shanghai Steelhome's widespread contact base of steel producers and iron ore traders across China.[7]
This move follows a switch to index-based quarterly pricing by the world's three largest iron ore miners - Vale, Rio Tinto and BHP Billiton - in early 2010, breaking a 40-year tradition of benchmark annual pricing.[8]
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on May 06, 2011, 06:38:19 PM
My impression is that commodity sell off mostly involved the more speculatively priced metals (mostly silver) and energy with financial buyers reassessing their appetite for risk.

In general I am in the Jeremy Granthem + Jimmy Rogers camp in regards to commodities.

By the was ALS.TO will not drop until I increase my holding (then it should drop another 20%). I was tempted today but did not pull the trigger.
Title: Re: ALS.TO - Altius Minerals
Post by: cwericb on May 06, 2011, 07:45:54 PM
Glad to know I am not the only one who precipitates a drop in everything I buy. I also took a plunge in RIM the other day - just to keep my streak going.
 
As for silver, this is somewhat of a replay of the Hunt brothers trying to control the market back in the 70's where there was just no justification for such a quick run up in price. But in the long run I can't see any reason why commodities are not going to be increasingly in demand in the future. When a major portion of the world's population has not been allowed to participat in the modern age and then over a relatively short period of time gain the ability to acquire all of those perks the western world takes for granted it, has to generate an incredible demand. All of those products that they want require vast amounts of natural resources - and we are talking about billions of new consumers. Once that movement has started, once those populations have have had a taste of modern luxuries it is like broaching a dam. That desire will not be stifled and, while prices may get a bit ahead of themselves at times, I am not convinced that we have a bubble that is about to burst. A correction for sure, and that is healthy and it is corrections help keep bubbles from forming. My 2 cents worth anyway.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on May 08, 2011, 09:34:59 PM
Dazel, if I might ask, what is your average cost for ALS and since when have you been buying?

I'm just curious.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 09, 2011, 07:37:31 AM


Mr. B

http://www.consolidatedthompson.com/i/pdf/news/july_20_09.pdf

At the top of the page it's headline is $240m investment...the assumptions are mine as I stated earlier. Very tough to find info on Companies from china.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 09, 2011, 07:44:09 AM

Mr.B,

Sorry I did not the other post there!
http://www.cleveland.com/business/index.ssf/2011/01/cliffs_natural_resources_to_bu.html

The deal is to close in "early spring"...I do not know if they waited for the closing to get their cash or sold their shares out in the open market. So if they waited they will get paid soon.


Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 09, 2011, 07:46:53 AM
Average price.

I will tell you when I am done buying...

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 09, 2011, 04:46:54 PM

Liberty,

I will tell you that we have been buyers just about everyday. Looks like we all may have been bidding!

This stock is pretty illiquid. We have contemplated talking to management about their buyback program. They are in negotiations all the time...Alderon, NLRC, and the other ( active projects)..so it would make sense to do automatic buybacks that are regular in nature and are not done on new information. However, that woluld have hurt all of last week as they would have taken out most of the bids out.They are only allowed 9k in shares a day I believe though. In 2008, they took out 10% of their outstanding shares which was a great use of capital. We would like to see them do something similar in the future. We think it is a great use of their cash hoard...at these levels we think it may be their best use of capital.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 09, 2011, 05:02:40 PM
Altius share buy backs.

http://www.altiusminerals.com/files/PR0211-NCIB.pdf
9200 shares is their daily limit (above)...

http://www.altiusminerals.com/files/PR0812.pdf

This was their load up on shares below $6...great purchases!
http://www.altiusminerals.com/files/PR0817-NCIB.pdf

interesting that in 2007 that averge purchase price was above $13 (below)
http://www.altiusminerals.com/files/PR0717.pdf

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 09, 2011, 06:14:49 PM


Mr.B,

Here is your answer...closing (cash) May 12th. The final clearance was given by China today.

http://finance.yahoo.com/news/Cliffs-Natural-Resources-Inc-prnews-3359078098.html?x=0&.v=1

...I would think Alderon would be in play on May 13th...from both parties...the market liked Cliffs purchase as it was great for the stock...why not pick up more reserves next door? As for input or interest from the other parties we shall see.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 11, 2011, 05:39:15 AM

http://finance.yahoo.com/news/Alderon-Intersects-29-Iron-iw-657365906.html?x=0&.v=1

Alderon continues to have positive drill results.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on May 11, 2011, 06:42:12 AM

http://finance.yahoo.com/news/Alderon-Intersects-29-Iron-iw-657365906.html?x=0&.v=1

Alderon continues to have positive drill results.

Dazel.

That sounds like potentially great news. When they say:

"The goal for the updated resource is to delineate 800 million to 1 billion tonnes at a grade between 28-32% iron ore."

Those tonnages are huge. Can you explain a bit what they mean here? Is that just what they're looking for, or do they have some confidence that this is what they can find based on those early results, but it's not yet a sure thing?
Title: Re: ALS.TO - Altius Minerals
Post by: BRK7 on May 11, 2011, 11:54:19 AM
Altius and Alderon are both down about 4% today.

I recognize that both the TSX and TSXV are also down today, though not nearly 4%.

I'm new to the story here, but, given that ALS and ADV are both selling off relative to the broader market, I would conclude that the information contained in Alderon's press release today may have been viewed as disappointing by the market.

Maybe I'm oversimplifying.  Can anyone offer a context in which to interpret the Alderon press release?  What are the market expectations in terms of output from Alderon’s mining activities?
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 11, 2011, 02:02:47 PM


Liberty,

Alderon's site is excellent...it compares grades and resource size to TCL and to Cliffs who are next door...their iron type are virtually the same at Bloom Lake compared to Alderon...big difference however, TLC should close tomorrow and is producing 8mty or (million tones year). The 1 billion ton target is being drilled now and today was another big step towards that goal.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 11, 2011, 02:09:20 PM
"Altius and Alderon are both down about 4% today.

I recognize that both the TSX and TSXV are also down today, though not nearly 4%.

I'm new to the story here, but, given that ALS and ADV are both selling off relative to the broader market, I would conclude that the information contained in Alderon's press release today may have been viewed as disappointing by the market.

Maybe I'm oversimplifying.  Can anyone offer a context in which to interpret the Alderon press release?  What are the market expectations in terms of output from Alderon’s mining activities?"

I can never explain the market behaviour as we know people sell on emotion. Alderon actually opened up until the commodity complex fell apart. Oil was down 4%. Altius is very illiquid and moves quickly in both directions. As I said in the other post I would look at Alderon"s website they have done a good job explaining what they are looking for, where they are in Labrador (Thompson consolidated and Cliffs are next door...look at the map they have posted it is very detailed... and they do good comparison's of themselves vs Thompson consolidated. In a perfect world that is who they want to become.

Dazel.
 
 
 
 
Title: Re: ALS.TO - Altius Minerals
Post by: MrB on May 13, 2011, 08:30:04 AM
Dazel,
I think we're missing each other here. I'm referring to the what appears to be the 19.9% stake purchased by WISCO in 2009 for $240m, as mentioned in your earlier post.

That deal was done and dusted in 2009 correct?
If so then how much cash, presumably $240m, has changed hands?
If not, why not?

Count me a skeptic when it comes to most of the high flying deals by Chinese companies. I've like to double check for REAL transfer of value. From your description, it sounds like it was a simple cash for shares deal. So, that is why I asked the question about the cash. 

Anyway, not important. It sounds if you did your homework.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 15, 2011, 10:21:37 AM

Mr.B,

I get what you are saying now. I really have no way to know whether the 19% stake was a straight cash infusion in 2009 or whether it was a combination of future orders and then equity. However it was structured..Wisco got paid out in cash for their 19% stake on May 12th 2011. Cliffs now owns it all.

http://finance.yahoo.com/news/Cliffs-Natural-Resources-Inc-cnw-3687103961.html?x=0&.v=1

We can only hope that Alderon has half the success of Consolidated Thompson. It really was a job well done by that team especially going through the 2008 ad 2009 financial meltdown. Congrats to them!

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on May 17, 2011, 09:47:08 AM
Doubled my position today. At the current price it's a net-net.

BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on May 17, 2011, 10:07:38 AM
I have also increased my position. Mr. Market is going crazy.
Title: Re: ALS.TO - Altius Minerals
Post by: finetrader on May 17, 2011, 10:45:37 AM
have also increased my position. Mr. Market is going crazy.

I'll meet you when it is below 10$
Title: Re: ALS.TO - Altius Minerals
Post by: naboo on May 17, 2011, 10:48:26 AM
I have also increased my position. Mr. Market is going crazy.


Lucky guys.

I kept buying in the past couple of months, just felt like buying FFH in 2006 and 2007.

Now really no cash left.
Title: Re: ALS.TO - Altius Minerals
Post by: naboo on May 17, 2011, 10:51:54 AM
have also increased my position. Mr. Market is going crazy.

I'll meet you when it is below 10$


Just wondering, who is selling ???
Title: Re: ALS.TO - Altius Minerals
Post by: finetrader on May 17, 2011, 11:07:22 AM
have also increased my position. Mr. Market is going crazy.

I'll meet you when it is below 10$


Just wondering, who is selling ???

IMHO   Speculators that bought when commodities were hot a few weeks ago are selling indiscriminately now.   
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 17, 2011, 11:12:07 AM

I continue to pick away.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: enoch01 on May 17, 2011, 11:30:54 AM
have also increased my position. Mr. Market is going crazy.

I'll meet you when it is below 10$


Just wondering, who is selling ???

People who think Alderon is over-valued?
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 17, 2011, 11:40:14 AM


Prices today were as low as when the tsunami hit Japan. To put that in perspective...the dow was 800 points lower...on the mass nuclear and radiation scare.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: alertmeipp on May 17, 2011, 11:45:15 AM
Dazel, what % of your fund is in ALS.TO- seems like u are adding forever.?
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 17, 2011, 03:58:02 PM

thanks for noticing us getting our ass handed to us!!! We sold almost everything after the tsumani rebound so Altius is our only real position...as always added too early!!

We do not run a fund..it is our money...across several accounts so not sure what the percentage is...

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on May 17, 2011, 04:04:07 PM
better to be too early than too late

I averaged in some as well
Title: Re: ALS.TO - Altius Minerals
Post by: alertmeipp on May 17, 2011, 04:26:38 PM
 ;D
Thanks for sharing your idea, I haven't done enough research so it's a relatively small position for me but I feel you. Don't count chips until you leave the table.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on May 20, 2011, 11:02:35 AM
Not directly about Altius, but about another producer near Labrador:

http://www.cbc.ca/news/business/story/2011/05/20/arcelotmittal-steel-quebec.html

Quote
International steel conglomerate ArcelorMittal will invest $2.1 billion to expand its iron ore facilities in Mont-Wright, Quebec.

The facility, near the town of Fermont, will be upgraded to be able to produce 24 million tonnes of iron ore concentrate by 2013 — a major upgrade over the 14 million tonnes currently produced.

The company is also considering upgrades at a facility in Port Cartier. The expansion will create 8,000 construction jobs during the process, and 900 permanent ones once the upgrade is completed, the Luxembourg based steel titan said Friday.

Soaring global demand for the raw materials that allow economic expansion has caused a rush of investment in the commodities sector in recent months and years. ArcelorMittal, which has operations in more than 60 countries, has committed to hike its iron ore production to 100 million tonnes by 2015 to keep up with demand.

The world's largest steel producer, ArcelorMittal acquired most of its Canadian assets during the last round of consolidation in the steel industry in 2006. Among other holdings, they also own the former Dofasco steel-making facilities in Hamilton, Ont.

Earlier this year, the company took over Baffinland Iron Mines Corp. and its massive iron ore development in Mary River, about 160 kilometres south of Pond Inlet, Nunavut.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on June 01, 2011, 07:36:05 AM
Dazel, is that you buying today?  ;)
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on June 02, 2011, 07:04:14 AM
Potential good news:

http://www.millrockresources.com/news/millrock_provides_update_on_estelle_gold_project_alaska_and_early_exer/
Title: Re: ALS.TO - Altius Minerals
Post by: naboo on June 02, 2011, 07:27:01 AM
Potential good news:

http://www.millrockresources.com/news/millrock_provides_update_on_estelle_gold_project_alaska_and_early_exer/


Are there any Millrock shareholders on this board besides me?
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 03, 2011, 07:17:16 AM

For those shareholders of Altius....
sleep tight....you own Candian resources in New Foundland and Labrador. Where the government is friendly and your CEO and resident entrepreneur is from there...
They are the largest holder of mining permits in the province and work closely with the government. We have not gotten any respect from the market for our political safety and "Canadian assets and cash equivalents" but we will.

www.nr.gov.nl.ca/nr/mineralstrategy/submissions/Altius.pdf

We made money a small amount of money on TRE on their $11 equity raise...but passed on all the high flyers with respect to China. We hope there is no fraud there of course for all involved.

But we chose the slow turtle like road of Altius. With an embedded margin of safety. We sleep well with our cash hoard and we expect a "Canadian premium" at some point in the future.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 07, 2011, 03:02:33 PM
http://www.businessspectator.com.au/bs.nsf/Article/High-iron-ore-prices-to-stay-for-now-HGBMP?opendocument&src=rss

This is very positive for Alderon an Altius' other iron ore holdings.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 07, 2011, 03:12:28 PM


http://www.indexmundi.com/commodities/?commodity=iron-ore&months=60

interesting chart.....and people thought gold was doing well!!!


Dazel.   
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 07, 2011, 03:23:33 PM

http://www.dailymarkets.com/stock/2011/06/06/cliffs-provides-outlook/


Here are the economics of the Consolidated Thompson mine from Cliffs Natural resource for 2011 and 2012. You can see why they bought it!

Sorry for the overload of info but it shows what Alderon could become...if it grows up like it's neighbour.

Dazel. 
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on June 07, 2011, 07:16:16 PM
Thanks Dazel, you always find interesting stuff.

I'm curious to know if you're still buying. Seems like you've been buying forever, still have dry powder?
Title: Re: ALS.TO - Altius Minerals
Post by: naboo on June 08, 2011, 10:28:47 AM

http://www.dailymarkets.com/stock/2011/06/06/cliffs-provides-outlook/


Here are the economics of the Consolidated Thompson mine from Cliffs Natural resource for 2011 and 2012. You can see why they bought it!

Sorry for the overload of info but it shows what Alderon could become...if it grows up like it's neighbour.

Dazel. 



So it seems like ALDERON RESOURCE (ALDFF, ADV.V) at current price is a better choice than Altius.



Title: Re: ALS.TO - Altius Minerals
Post by: JAllen on June 08, 2011, 10:41:50 AM

http://www.dailymarkets.com/stock/2011/06/06/cliffs-provides-outlook/


Here are the economics of the Consolidated Thompson mine from Cliffs Natural resource for 2011 and 2012. You can see why they bought it!

Sorry for the overload of info but it shows what Alderon could become...if it grows up like it's neighbour.

Dazel.  



So it seems like ALDERON RESOURCE (ALDFF, ADV.V) at current price is a better choice than Altius.





But it's way riskier because it doesn't have a huge cash balance and its success is dependent on one currently undeveloped body of ore.  Altius has Alderon upside (including the royalty) and many other assets that support its value.  If Alderon doesn't work out for some reason a current investor would lose way less if they only owned Altius.

I should add that Dazel did a way better job explaining this earlier in this thread (about why he's buying Altius, not Alderon).
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 12, 2011, 01:25:35 PM

We own a small position in Alderon...and yes still picking away at Altius....

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on June 12, 2011, 06:32:22 PM

We own a small position in Alderon...and yes still picking away at Altius....

Dazel.

Dazel,

October is approaching. Any idea what the possible outcomes with NLRC are?
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 13, 2011, 07:19:30 AM


I am pretty sure that it expires in Oct 2012...as per latest financial report...of course I would love to
see something happen sooner rather than later there. I will check it.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 13, 2011, 07:34:35 AM


NLRC does expire Oct 2011....sorry for the brain cramp...as I have said I value it at 0...it does act as a out of the money call option because if there is any new positive development it would be extremely positive frot he company. As we all know Brian Dalton has worked very hard here hopeflly he can pull something off...we know from the finacial reports that they are negotiating with "china and state interests" these parties would not be alone in my opinion...likley they would partner with a major refiner...and they could do one off trades on refined oil in other parts of the world that are closer to China.
This is speculation on our part.

Dazel.




Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on June 13, 2011, 04:42:16 PM


NLRC does expire Oct 2011....sorry for the brain cramp...as I have said I value it at 0...it does act as a out of the money call option because if there is any new positive development it would be extremely positive frot he company. As we all know Brian Dalton has worked very hard here hopeflly he can pull something off...we know from the finacial reports that they are negotiating with "china and state interests" these parties would not be alone in my opinion...likley they would partner with a major refiner...and they could do one off trades on refined oil in other parts of the world that are closer to China.
This is speculation on our part.

Dazel.






Everybody makes mistakes but the fact that Altius invested so much money in this one doesn't make you raise some questions on how they approach certain types of investments?
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 13, 2011, 05:14:20 PM

Goldfinger.....at the time the market was pricing in a huge equity component (for nlrc) to their valuations on NLRC alone. They were
partnered with the who's who of the european investment community in the biggest private equity financings of alltime. Yes, I would say they got caught up and then caught by the financial crisis. The truth is if that did not happen we would have never got involved in Altius.. as we would not have invested in that valuation or anything close to it.
That is why 0.
If anything the process scared the crap out of them...they could have deployed way more capital as they were loaded with cash in 2009. They were aggressive in IRC and the buy back but conservative by holding lots of cash. They have no debt which to us may be "too conservative"...we would not be upset to see them issues long term debt at these rates and buy back another 10% of the float. Why? it's the best investment they could make right now. so the long answer is no I am not worried...if anything they are too conservative here. I would assume they would be in a quiet period before earnigs in the next couple of weeks. But I would expect buy backs if we are trading at these levels at that point.

Altius is the only secured creditor of NLRC so they were not that stupid...they get paid first...I do not know if there is any cash left at NLRC...but I am assuming their is some...Altius should get it...if nothing happens...the entire invesment has been written off to 0...so any money recovered would be a bonus.



If Brian Dalton can put something together even with SNC Lavalin..it would be extremely positive and the market values the whole company at less than it's cash and liquid investments right now  so it really would be something if he could pull it off.
like we said an "out of the money" call option.
Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on June 13, 2011, 07:17:34 PM

Goldfinger.....at the time the market was pricing in a huge equity component (for nlrc) to their valuations on NLRC alone. They were
partnered with the who's who of the european investment community in the biggest private equity financings of alltime. Yes, I would say they got caught up and then caught by the financial crisis. The truth is if that did not happen we would have never got involved in Altius.. as we would not have invested in that valuation or anything close to it.
That is why 0.
If anything the process scared the crap out of them...they could have deployed way more capital as they were loaded with cash in 2009. They were aggressive in IRC and the buy back but conservative by holding lots of cash. They have no debt which to us may be "too conservative"...we would not be upset to see them issues long term debt at these rates and buy back another 10% of the float. Why? it's the best investment they could make right now. so the long answer is no I am not worried...if anything they are too conservative here. I would assume they would be in a quiet period before earnigs in the next couple of weeks. But I would expect buy backs if we are trading at these levels at that point.

Altius is the only secured creditor of NLRC so they were not that stupid...they get paid first...I do not know if there is any cash left at NLRC...but I am assuming their is some...Altius should get it...if nothing happens...the entire invesment has been written off to 0...so any money recovered would be a bonus.



If Brian Dalton can put something together even with SNC Lavalin..it would be extremely positive and the market values the whole company at less than it's cash and liquid investments right now  so it really would be something if he could pull it off.
like we said an "out of the money" call option.
Dazel

Thanks Dazel. Thinking in the same lines as you but always informative to be the devil's advocate!
I believe they will be much bigger soon too!
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 14, 2011, 03:41:14 AM
http://finance.yahoo.com/news/Alderon-Appoints-Key-iw-2638363637.html?x=0&.v=1

Alderon continues to ramp up.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 14, 2011, 06:15:23 AM

I know there are some Millrock holders here:insider buying

http://canadianinsider.com/coReport/allTransactions.php?ticker=MRO
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on June 17, 2011, 01:45:02 AM
Australian central bank, Glencore, Rio-Tinto and others seem to believe that even though China is and will slow down, certain commodities like iron ore will still see very strong demand from there for the foreseeable future.
http://www.dailytimes.com.pk/default.asp?page=2011\06\16\story_16-6-2011_pg5_28

Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on June 17, 2011, 01:53:19 AM
China has planned lots of civil works (high speed rail system, affordable housing etc...) and this should keep on adding demand in the iron ore market:
http://www.pr-inside.com/china-investments-in-real-estate-and-r2659339.htm
Title: Re: ALS.TO - Altius Minerals
Post by: Myth465 on June 17, 2011, 02:57:32 AM
I dont know that slightly reaks of talking your book.  Though the fact that Dazel's calculation is based on prices falling by 50% is quite interesting.
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on June 17, 2011, 12:12:45 PM
I dont know that slightly reaks of talking your book.  Though the fact that Dazel's calculation is based on prices falling by 50% is quite interesting.

Those projects are not from private enterprise, those are government planning projects. I have a feeling that the more they try to slow down the economy the more they will try to compensate with projects of that kind so as to support poorer parts of the population (real estate projects), continue the development of the infrastructure for the future and provide construction/engineering jobs.
It is always better for Alderon to be in a context of very high iron ore demand so that chinese steel makes or miners feel the need to get supply from everywhere in the world: it acts as catalyst for quicker/bigger/better financing deals.
Believe it or not I saw other reports stating the fact that copper inventories have been cut in half recently and there is under-supply of copper at the moment also, like this one http://www.bloomberg.com/news/2011-06-15/copper-users-in-china-plunder-stockpiles-as-goldman-forecasts-record-rally.html
Title: Re: ALS.TO - Altius Minerals
Post by: Myth465 on June 18, 2011, 03:13:01 AM
Commodities are interesting. They seem to follow economic threads to a degree but also appear to be slightly decoupled...

Either way I like them and plan on holding them for a while.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on June 18, 2011, 07:16:16 AM
http://www.gurufocus.com/news/136687/monish-pabrai-postmortem-on-his-best-ever-investment--teck-cominco-tck

This will add to our/my confirmational bias re commodities.

"One of the things I believe will happen is that we'll probably see the rise of at least 100 brand new cities if not more, over the next 20 or 30 years which will each have at least 5 million people. When you are going to build out 100 New Yorks in a 30-year period, you can't do that without steel. ...

There are some specific chemistry nuances with met coal. Metallurgical coal and iron ore are both chokepoints. Most of the iron ore going to China comes from two countries, Brazil and Australia, and little bit from India. They're the chokepoint in terms of China's ability to get iron ore. Metallurgical coal is the same way. "
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on June 18, 2011, 12:54:12 PM
Commodities are interesting. They seem to follow economic threads to a degree but also appear to be slightly decoupled...

Either way I like them and plan on holding them for a while.

You do not have a BRIC every generation! Other than that, there are true cycles of undersupply-oversupply in commodities that last for a decade or two. The crisis of 2007-2009 caused lots of projects to be dropped (NRLC is an example) at the wrong time.
I am only trying to capture a more detailed view of what is really happening in China for example than just listening to Chanos and followers or Rogers and followers: both talk their book. Chanos while smart and accurate in many ways sounds very arrogant and biased to me when it comes to that particular area. Buffett confirmed in a recent interview that he thought China will have many more successes. Who knows how deep this current crisis will be, but take the money and run seem a bit simplistic to me. What the central bank of Australia described or biaggio just mentioned look much more accurate and reasonable.
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on June 18, 2011, 01:48:25 PM
He is an example of an article that underlines the fact that these outsiders like Chanos and Roubini say things about a country they are not really familiar with: http://www.forbes.com/2011/06/15/nouriel-roubini-is-all-wrong-about-china.html. And again that doesn't mean being in denial about the true issues this country faces.
Title: Re: ALS.TO - Altius Minerals
Post by: Myth465 on June 19, 2011, 04:19:44 AM
Thanks all. Learning more and more each day.
Title: Re: ALS.TO - Altius Minerals
Post by: naboo on June 20, 2011, 08:04:56 AM
Should Altius release financial report this week?

last year dates:  6/29/2010(annual), 9/10/2010,  12/09/2010, 3/14/2011
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 22, 2011, 12:52:19 PM

This Grantham piece has been passed around....for those interested in Altius and Alderon you should play close attention to the iron ore discussion...page 6 in particular.

Through GMO research they have come up with probability that prices would return to their downward 100 year trend...after the spikes over the last number of years...

iron ore has the highest probability of not returning to its down trend at a "1 and 2.2 million chance!!!"

He explains that he would not believe even a "1 and 1 million chance" but he has to believe it because he did it!

iron ore was $150 back in 1900...now it is back to $175 in 2011.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 22, 2011, 12:55:31 PM

sorry guys forgot to put in the link..it is worth the read

http://www.gmo.com/websitecontent/JGLetterALL_1Q11.pdf

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 23, 2011, 07:00:44 AM
http://canadianinsider.com/coReport/allTransactions.php?ticker=ALS

Altius is buying back shares.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on June 23, 2011, 07:27:25 AM
http://canadianinsider.com/coReport/allTransactions.php?ticker=ALS

Altius is buying back shares.

Dazel.

Nice, they got them pretty close to the recent bottom too.
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on June 23, 2011, 02:54:02 PM
http://canadianinsider.com/coReport/allTransactions.php?ticker=ALS

Altius is buying back shares.

Dazel.

Nice, they got them pretty close to the recent bottom too.

Pretty unsignificant buyback tough. 200k$ compared with 330M Market cap.

BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on June 23, 2011, 03:12:56 PM
http://canadianinsider.com/coReport/allTransactions.php?ticker=ALS

Altius is buying back shares.

Dazel.

Nice, they got them pretty close to the recent bottom too.

The daily volume is low with this stock.
Pretty unsignificant buyback tough. 200k$ compared with 330M Market cap.

BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on June 23, 2011, 04:09:36 PM

Pretty unsignificant buyback tough. 200k$ compared with 330M Market cap.

BeerBaron

Indeed, but daily volume is very low and Altius is limited to buying only 9.2K shares per day as per their buyback program.

I wish it was more, but as long as they opportunistically deploy capital well, even small sums, I'm happy.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on June 29, 2011, 01:22:52 PM
Anyone knows when the annual report is coming out this year? It was around this time last year, but I couldn't find any info about it..
Title: Re: ALS.TO - Altius Minerals
Post by: moore_capital54 on July 01, 2011, 02:00:29 PM
I think July 14, 2011.

Big fan of Mr. Dalton and Altius.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on July 01, 2011, 07:30:12 PM
Thanks, I'll add that to my calendar!
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 04, 2011, 02:21:00 AM

http://www.bloomberg.com/news/2011-07-03/china-metal-acquisition-binge-led-by-australian-rhodes-scholar.html

interesting article...As Alderon ramps up things could get interesting...I like that he is looking at North America as well.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: moore_capital54 on July 04, 2011, 01:11:15 PM
Dazel, Canada is becoming an important supplier of iron ore for the emerging nations. This bodes well for the Canadian Iron Ore co's such as Alderon, Champion, Advanced Explorations, Adriana, and New Millenium.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on July 04, 2011, 01:41:25 PM
What I'm more curious about in the mid-term is to see if Altius will be as successful outside of Newfoundland-Labrador. If they can transition their expertise to other hunting grounds, I'll be very happy.
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on July 04, 2011, 02:26:44 PM
What I'm more curious about in the mid-term is to see if Altius will be as successful outside of Newfoundland-Labrador. If they can transition their expertise to other hunting grounds, I'll be very happy.

I concur ;)
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 04, 2011, 06:13:00 PM

I do not think  you will see them outside their sweet spot for awhile...I would be very disapointed to see them waste much time outside their current projects unless they were able to buy royalties at a good price. We would rather see a large scale buyback.
They have the largest area of staked mineral rights in all of Newfoundland Labrador...they know the government and they have proven success time and again. it looks like they could pull out $400m plus from Alderon over the medium term...ownership stake and Royalty...if the drilling continues to be successful. This is on a $2m investment!
They have another iron ore project down the road!!!! What will it be worth by the time they are done? We think mr.market has lost his marbles here!

disclosure we continue to buy....we just do not see anything as cheap.
Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: moore_capital54 on July 04, 2011, 07:12:00 PM
The one thing that worries me about Alderon is the rail capacity, other than that I agree with you on Altius.
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on July 04, 2011, 07:19:26 PM
The one thing that worries me about Alderon is the rail capacity, other than that I agree with you on Altius.

http://finance.yahoo.com/news/Alderon-Confirms-Rail-and-iw-2097525415.html?x=0&.v=1
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on July 04, 2011, 07:23:01 PM

I do not think  you will see them outside their sweet spot for awhile...I would be very disapointed to see them waste much time outside their current projects unless they were able to buy royalties at a good price. We would rather see a large scale buyback.
They have the largest area of staked mineral rights in all of Newfoundland Labrador...they know the government and they have proven success time and again. it looks like they could pull out $400m plus from Alderon over the medium term...ownership stake and Royalty...if the drilling continues to be successful. This is on a $2m investment!
They have another iron ore project down the road!!!! What will it be worth by the time they are done? We think mr.market has lost his marbles here!

disclosure we continue to buy....we just do not see anything as cheap.
Dazel.

- Cranberry invests opportunistically wherever it makes sense.
- Millrock is an example of a partnership operating outside of Newfoundland.
- Dalton mentioned recently that he wants to buy royalties and also explore for new stakes in other geographic areas.
I agree they have lots of projects they already can develop, but why not increasing the portfolio when it makes sense?
Title: Re: ALS.TO - Altius Minerals
Post by: moore_capital54 on July 04, 2011, 07:27:11 PM
That press release doesn't confirm anything. Trust me when I say that the biggest issue with this project is going to be rail capacity. Think about it for a second, if the fundamentals of iron ore remain strong enough to support the type of CAPEX that the Alderon project will require, there will be even less capacity on that line. And IOC is going to prefer to ramp up production themselves. I was at a conference recently where Morabito was pressed on this and he discussed some other options as did Adriana Resources which recently received an investment from Wisco. With iron ore its all about infrastructure, hence the CLM deal.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 05, 2011, 01:22:21 AM

I do not think that it is out of the question to look outside of their geographic area, I am just stating the obvious...they have a tremendous portfolio with a book value of practically 0. I would monetize those assets first...using the proceeds to invest in the their "circle of competence" abroad. We vision this more in the fashion of what Leucadia has done at fortescue...and what Altius did at IRC and Millrock...

The most unappreciated asset at Altius is their royalty stream which will attract very high valuations in the future...this is where we would like to see them be proactive. We would like them to show the market place what they think these royalties are worth...which would bring the share price to where it should be giving them more options to purchase more royalties. They have shown tremendous skill yet their valuation as a company in the market has both their royalty stream and management valued at the less than 0. We will be around when these are revalued...they will be happy days..but the revaluation will bring the opportunity you guys are discussing. That is where things will get interesting.

If the stock price remains depressed it is possible that they will get taken out. With all that cash, the Alderon stake and the royalties valued at 0..smart money has to be looking at it.
If that is the case we will likely follow Brian Dalton to his  next venture or stay with him if a buy outkeeps him at Altius with greater financial flexability.
He is a rare breed of business man and the makret is missing that.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 06, 2011, 07:11:55 AM

http://alderonmining.com/_resources/news/2011-07-06-NewsRelease.pdf

It looks like Alderon has made up an all star team from the Labrador iron ore district...I  like that his million in
options are priced at $3.20.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on July 06, 2011, 12:12:43 PM
Very nice. Seems like a heavy-hitter who can get things done!
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on July 07, 2011, 03:09:51 PM
http://finance.yahoo.com/news/Altius-Minerals-Corporation-ccn-662971279.html?x=0&.v=1


Altius Minerals Corporation (TSX:ALS) Reports Annual Net Earnings of $70,239,000
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 07, 2011, 08:35:51 PM


We were $200k off on our prediction!! We expected it as did the market.

What we did notice from the  presentation of the annual report and press release is that they are marketing themselves as the "dominant" owner of staked mineral properties in the iron ore district of Labrador. I have been hoping they would do this.... Alderon has been a huge success but they own a lot more in the surrounding areas. As Shaleb said in the previous email iron ore prices are high and they do not look to come down for awhile...things could get very interesting if Altius were to sign a deal or two more in the same area and they were to get a bigger name in the market place for their position in the Labrador iron ore trough. Iron ore companies trade at a significant premium than Altius' depressed price.

For those counting...the NPV of the Alderon royalty was $100m at half of then iron ore price of 180...it is at 169.70 today....however, if you double the resource to a billion tons and the price remains steady....you can do the math...could be worth a lot.
If you were then to add the other properties they own in the area....you can see what we are talking about.

We have done our homework on iron ore and have followed a lot of what Leucadia has said on the subject. But we also get the margin of safety from the large cash, marketable securities, Royalties and other projects.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 08, 2011, 06:07:14 AM

iron ore prices have risen over the week to $171...this obviously does not mean  much over the long term but these prices are actual contracts for iron ore between buyers and sellers. here is a site to track it for anyone interested.

http://www.mbironoreindex.com/

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: naboo on July 08, 2011, 06:26:53 AM
I didn't see any conference call reminder in their AR.   Will there be a conference call?

Tried to call them in the morning, nobody answered the phone.
Title: Re: ALS.TO - Altius Minerals
Post by: gurjot on July 08, 2011, 09:49:23 AM
hi,
probably no converence call.  email them and they respond promptly.


thanks
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on July 09, 2011, 12:25:41 PM
Indian iron ore consumption projected to be steel strong over the next few years on infrastructure spending:
http://www.financialsense.com/contributors/frank-holmes/2011/07/09/india-demand-for-iron-ore-made-of-steel

 :)
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 13, 2011, 04:14:57 AM

http://www.mbironoreindex.com/

Iron ore real contracts have been up now for 9 days in row....China had record demand in june at a 25% increase over May. They are building !0 million social housing untis for 2011!!! Yes 10 million.

With gold hitting record highs and iron ore looking like it will hold for the forseeable future...Altius may be in the right place right time when the market figures out what they own.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 13, 2011, 06:20:39 AM

Altius Gold holdings

They own 529,229 Royal Gold shares...these are hitting new 52 week highs daily. We also know that the Voisey bay royalty will greatly improve Royal golds cashflows with the recent strike ending. It was the primary reason for the their purchase. They also own a piece Las Cruses in spain (leucadia developed) that has recently come on stream...and of course the gold roylalties are going up daily with gold at a new record highs. This investment is part of their highly liquid assets but it is far outperfroming the cash equivalent that the market gives it credit for.

Milrock, viking and the rest of the potential royalties may get great interest in the coming year as gold hits new highs...if anyone on the board has greater detail on these individual royalties in would be great if you could post it.

Cranberry Capital
Their $25 million investment with Paul Van Eeden could also prove very profitable if the junior mining sector was to awaken in the next year. We are seeing a lot of action in junior gold miners as of late.

I rarely discuss this side of their asset base as we value it as a call option like the NLRC...but it shows a another forgotten asset at Altius that could have large potential.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on July 13, 2011, 07:03:55 AM
Thanks for posting, Dazel. I quite like this side of their business because I figure they are much better at investing in metals & commodities than I am. I love what they own directly, but I also like that they're opportunistic about going elsewhere and investing in good people and good projects.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 14, 2011, 05:28:06 AM


Liberty good point.

We made very good money on Leucadia stock when hit it $50 range back in 2007...we did not understand fortescue or inmet well enough to make direct investments but we cashed in by trusting the intelligent investing of Leucadia. We also felt Leucadia's other investments created a large enough margin of safety to buy the stock. A we know fortescue and inmet became home runs and they took Leucadia stock thorugh the roof. The situation with Altius is similar...

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 18, 2011, 07:27:59 AM

Royal Gold hit another 52 week high today..at $66.62

It looks like Altius has a gain of about $13m since they took delivery of the Royal gold shares in the IRC deal.
I would interested to see their Cranberry capital partnership small caps they own with what in going on in junior gold miners right now.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on July 24, 2011, 08:56:00 PM
So, I have a hypothetical question:  Suppose you were given the choice between receiving one of the two following gifts today: 1) A stock option to purchase 32.3 million shares of Alderon @ 3.50 that can't be exercised until production begins; or 2) the 3% gross sales royalty altius owns.  Which one would you choose?  Anyone have any thoughts?
Title: Re: ALS.TO - Altius Minerals
Post by: value-is-what-you-get on July 25, 2011, 06:02:19 AM
So, I have a hypothetical question:  Suppose you were given the choice between receiving one of the two following gifts today: 1) A stock option to purchase 32.3 million shares of Alderon @ 3.50 that can't be exercised until production begins; or 2) the 3% gross sales royalty altius owns.  Which one would you choose?  Anyone have any thoughts?

The 3% Gross Sales Royalty.  I think that judging by Consolidated Thompson's path to production that we're certainly in for some dilution which would undermine the value of the option.  They'd both ultimately pay off, the question for me is how much grief along the way.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 25, 2011, 08:48:46 AM

I have written about this in the past. So if you check the thread you will get more detail.

Here is how we look at it. We also know that Altius has publically stated they have been in China over the last 10 months looking at deals. They are in a lock up postion with regards to their ownership of Alderon until September.

We think that the NPV of the royalty is worth more than the value of the shares they own. The market has given them a value of less than 0 for the NPV of the royalty.

However, where it gets very interesting is the fact that they can control their destiny with regards to the Royalty.  This could perhaps give them both a premium in their postion in Alderon since they are the majority owners. This could become "strategic" to a buyer who wants control of Alderon.

Do you want to sell to Rio Tinto who may take longer to develop the mine and delay the royalty payments? Or do you go to Rio Tinto and say we will sell you control of Alderon but you will have to throw in another $200m for the royalty now rather than later.

Or do you sell to a company from China now and collect on the royalty sooner as they will fast track develpment?

Either way we see Altius in a great postion and we do not think the market has figured this out...

As far as dilution...Altius is "full" of cash so they have the option to do many things that would avoid dilution...this also gives them negotiating power with any potential suitors. They do not "have" to do anything.

Dazel.

Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on July 25, 2011, 09:18:43 AM
I agree with Dazel.

The beauty here is that the Alderon shares and the royalty complement each other. The royalty is worth more because they can push for a more advantageous sale because of their stock.

I added to my position this morning :)
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on July 29, 2011, 01:54:19 PM
Thanks for the reply.  My feeling was that if they define 1B+, finish the scoping study, and secure off-take agreements on favorable terms the stock could be worth more than the royalty.  But, I guess it doesnt really matter since the market is valuing the royalty at 0 anyway.  The fact that they own both definitely puts them in a favorable position.  I think this is the stock I feel most comfortable with in my portfolio in terms of risk/reward.  I added these last couple of days as well. 
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 02, 2011, 08:33:27 AM


RGLD- hit another 52 week high today...It is nice to see that even in this environment Altius' cash and marketable securities is not only holding tough but growing...it would be a very nice suprise to see some of the other gold holdings they have get some notice...including the potential royalty holdings.


Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 02, 2011, 08:43:30 AM


http://www.mbironoreindex.com/


iron ore prices continue to rise....you would never know it if you read any news in north america!

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: cwericb on August 03, 2011, 05:38:39 AM
Interesting interview in MacLean's Magazine with Peter Munk (Barrick Gold) on mining and Canada. Says that Canada can be the world centre for the mining industry and also some interesting comments about Chinese future demand.

http://www2.macleans.ca/2011/07/27/on-immigrant-dreams-the-importance-of-failure-and-why-the-future-belongs-to-canada/
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 03, 2011, 06:54:02 AM

cwericb,

Thank you for the article it was a great read. I would recommend Peter Munk's autobiography. I t is a tough read because his business history is something else. Interesting that he said he was anti gold bug and that is how he built his business! If you look at his deals in the 80's, they were historic. He sold futures right at the top and avoided the fall out of the 20 year decline in the gold price. I will be looking for a similar pattern this time around...when smart money starts hedging the gold price  into the future that is. Barrick bought out their hedges a couple of years ago for about $3 billion. So he is betting long on gold for now.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 03, 2011, 07:01:30 AM
http://finance.yahoo.com/news/Alderon-Metallurgical-iw-2155562494.html?x=0&.v=1

Alderon moving forward.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on August 03, 2011, 08:53:11 AM
http://finance.yahoo.com/news/Alderon-Metallurgical-iw-2155562494.html?x=0&.v=1

Alderon moving forward.

Dazel.

I don't understand all the technical stuff, but it seems like good news just based on this:

Quote
"The positive metallurgical results are another significant step in bringing the Kami Project into operation," says Brian Penney, Chief Operating Officer of Alderon. "The concentrate particle size distribution indicated by the testwork demonstrates that magnetic separation will provide a concentrate acceptable for market demands. The concentrate is expected to have very low deleterious elements with phosphorous being less than 0.01% and alumina at only 0.20%. Manganese is within acceptable range at 0.75%, which will allow for the broadest possible market for the Kami product as it is well below the critical 1% cut-off."
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on August 03, 2011, 09:41:11 AM
Strange that Alderon would be down 8% on the same day as the news release...
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on August 03, 2011, 10:02:31 AM
Strange that Alderon would be down 8% on the same day as the news release...

My guess is people are selling stocks that are seen as 'risky' pretty indiscriminately these days..
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on August 04, 2011, 06:16:08 AM
Here are two recent forward sale contracts of 62% iron-ore.  The article also gives some cost break-downs for their mine. Not that it is all-that relevant to Altius... 

http://finance.yahoo.com/news/Palladon-Ventures-CML-Update-iw-466721180.html?x=0&.v=1
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on August 07, 2011, 03:36:24 PM
Morabito interview:

http://www.cbc.ca/labradormorning/episodes/2011/08/04/alderon-resources---second-summer-of-exploration-in-labrador-west/
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on August 07, 2011, 07:03:10 PM
Thanks for posting jjsto!
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on August 08, 2011, 06:39:37 AM
Altius Minerals Corporation (TSX:ALS) Reports an Expanded Exploration Alliance With Cliffs Natural Resources

http://finance.yahoo.com/news/Altius-Minerals-Corporation-ccn-3399152944.html?x=0&.v=1
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 09, 2011, 04:43:08 AM

Great news...they have said in the past that they thought the Voisey Bay nickel belt extended further...and they talk about some of this with regards to their royalty in the area which covers a lot more than the current reserve estimates for the mine.

Interesting that they are expanding iron ore activities with Cliffs as well...many analysts have speculated that Cliffs is a potential buyer of Alderon as it is next door to their newly acquired Thomson Consolidated. It would make more sense to buy Altius outright and therefore gain control of Alderon for basically free. I do not know if they are that smart at Cliffs...but that is what I would do...keeping Dalton as a big part of the Cliffs organization. They would be stealing it even at a 50% to 60% premium today.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on August 09, 2011, 05:21:46 AM
Dazel thanks for the update.

Listen, you gotta stay quiet, you re going to give CLiff or other s ideas, I am just getting into ALS-I was hoping for more than 50% gain over the long term.

Closed at $10. ($284 million mkt cap= no debt + $200 m in cash/securities + Alderon/all royalties)
Title: Re: ALS.TO - Altius Minerals
Post by: naboo on August 09, 2011, 05:43:05 AM
Dazel thanks for the update.

Listen, you gotta stay quiet, you re going to give CLiff or other s ideas, I am just getting into ALS-I was hoping for more than 50% gain over the long term.

Closed at $10. ($284 million mkt cap= no debt + $200 m in cash/securities + Alderon/all royalties)


Only 50% gain over the long term?  If so, I will sell ALS right away.
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on August 09, 2011, 10:34:07 AM
Dazel thanks for the update.

Listen, you gotta stay quiet, you re going to give CLiff or other s ideas, I am just getting into ALS-I was hoping for more than 50% gain over the long term.

Closed at $10. ($284 million mkt cap= no debt + $200 m in cash/securities + Alderon/all royalties)


Only 50% gain over the long term?  If so, I will sell ALS right away.

He said stealing  ;D
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 09, 2011, 12:08:09 PM
 the fed is saying buy "real assets".....for 2 years or you will 0 return...

good spot to hide here at Altius.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: naboo on August 11, 2011, 02:02:59 PM
Altius says with $190m in cash to spend


http://www.mineweb.com/mineweb/view/mineweb/en/page66?oid=133091&sn=Detail&pid=102055


Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on August 11, 2011, 04:36:42 PM
I was just about to post that. Nice confirmation of my thesis that Altius can have great opportunities both in the up and down cycle.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on August 12, 2011, 08:48:56 AM
I was wondering if Dazel or any of the other Altius fans had taken a look at Cliffs (CLF)? After a quick glance, they seem fairly cheap, though they are much bigger than Altius (and thus probably more efficiently priced) and have more capex exposure because of their model.

Just trying to learn more about them, not necessarily thinking of buying some.. Curious to know what others who've had a look think. Thanks.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 16, 2011, 05:33:29 AM

We love Cliff's....enough to swap our Altius shares for theirs at a good enough premium! Cliffs was Peter Cundill's greatest investment...he bought and 1980's sold out and bought again after the 1987 crash.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 16, 2011, 05:36:41 AM

Altius continues the buy back nice to be sitting on a mountain of cash!

http://canadianinsider.com/coReport/allTransactions.php?ticker=ALS

The restrictions on the number of shares they can buy is hurting the amount they can buy back daily. However, slowly but surely.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: naboo on August 18, 2011, 11:00:02 AM
Alderon's Presentation, they even have a Chinese version

http://alderonmining.com/investors/presentations/


They are working hard to attract Chinese investors.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 22, 2011, 07:19:35 AM

http://www.mbironoreindex.com/

metal prices have stayed very high...Alderon will have high prices to use for its scoping study which should be out soon.

Dazel.

Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 22, 2011, 07:26:54 AM
Royal Gold hit another 52 week high today....$72...making Altius' stake in the company now worth $38.1 million...the $38 million is all  profit from the IRC deal.

hopefully the management is doing what they do best in this latest downturn...

they are trading for less than cash. crazy times.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on August 22, 2011, 07:52:03 AM
Crazy times indeed:

Altius Market cap: $300m

Cash: $190m
Alderon shares : $100m
Royal Gold shares: $38m

Total: $328m

Everything else: $-28m

It seems like the market is pricing Altius as if its stake in Alderon was going to zero.  Meanwhile it prices Alderon as if development will continue.  Something has to give...
Title: Re: ALS.TO - Altius Minerals
Post by: bathtime on August 24, 2011, 08:11:55 AM
Can you confirm whether my numbers are correct and if the Altius share count is fully diluted? Does the $190m in cash include the Cranberry Capital joint investment? Thanks!

Altius shares outstanding: 28,815,895.

In addition to cash Altius owns:

32,285,006 Alderon shares.

529,297 Royal Gold shares.





Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on August 24, 2011, 09:40:57 AM
Crazy times indeed:

Altius Market cap: $300m

Cash: $190m
Alderon shares : $100m
Royal Gold shares: $38m

Total: $328m

Everything else: $-28m

It seems like the market is pricing Altius as if its stake in Alderon was going to zero.  Meanwhile it prices Alderon as if development will continue.  Something has to give...

What I like is we get Voisey Bay royalty for free. This somewhere between 75-100M worth.

I'm curoius to see what they can recuperate from the refinery project... 5-10M?

Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on August 28, 2011, 11:05:13 AM
It seems like I've been waiting for the ALS 2011 Annual report forever..

http://www.altiusminerals.com/annual.php

Anyone has any idea when it is supposed to come out?
Title: Re: ALS.TO - Altius Minerals
Post by: JAllen on August 28, 2011, 11:43:29 AM
I emailed someone there and he said that it would be mailed the last week of September. 
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on August 28, 2011, 02:32:31 PM
I emailed someone there and he said that it would be mailed the last week of September.

Thanks. I wrote them a while ago but never heard back.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on August 28, 2011, 02:49:46 PM
there is a write up on Value Investor Club

http://valueinvestorsclub.com/value2/Idea/ViewIdea/54912

Values ALS at $14-15
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on August 31, 2011, 01:05:37 PM
Over 100k shares traded today. Wonder if there was a news item that hasn't hit the wires I monitor yet.. Anyone has seen anything? Could be just a random fluctuation in the spatio-temporal-continuum, though  ;)
Title: Re: ALS.TO - Altius Minerals
Post by: Williams406 on August 31, 2011, 02:05:27 PM
No news that I see, though Alderon up about 10%. Not that the two securities trade in sync all that much...
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on August 31, 2011, 02:10:06 PM
Well, that was dumb. I didn't think to check Alderon. Up a lot on 4x volume, so some of that probably spilled over to altius, though I'm still not sure if there's a specific reason for the jump.

This piece has a lot of nice things to say about Alderon, though nothing really new:

http://www.businessinsider.com/rodney-cooper-bullish-on-iron-ore-and-copper-2011-8
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 01, 2011, 05:46:30 AM
"Over 100k shares traded today. Wonder if there was a news item that hasn't hit the wires I monitor yet.. Anyone has seen anything? Could be just a random fluctuation in the spatio-temporal-continuum, though  ;)"

we were part of the buying......there was a large seller in Altius over the last 2 weeks....yesterday they were dumping at $10.30....odd for us to have liquidity in buying so we assumed it was forced or tax loss selling. This was before the pop in Alderon.

this seller or sellers along with the fact Altius is in a "quiet period" before earnings and therefore cannot buy shares have driven the shares to stupid levels.



Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 01, 2011, 06:01:19 AM
http://www.mbironoreindex.com/

iron ore is now at a 3 month  high! just in time for the Alderon scoping study that is out this month. We expect the numbers to look very good for production at Alderon at which time the world will take notice of the value of Alderon's potential.

The really wonderful part for both Alderon and Altius is that the potential suitors are awash in cash and have the ability to take on massive amounts of leverage for capital build outs at record low interest rates. Things could get very interesting.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on September 01, 2011, 07:09:47 AM

this seller or sellers along with the fact Altius is in a "quiet period" before earnings and therefore cannot buy shares have driven the shares to stupid levels.


That's a good point. What's the rule on the quiet period & buybacks? How long? Is it the same in the US as in Canada?

As for the prices being stupid, indeed. I bought some at 10.15 on Monday :)
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 01, 2011, 08:03:12 AM

I am pretty sure they are different for each company....not positive though.

Altius usually releases results around September 10th ...so I am assuming they are in a black out period.

Title: Re: ALS.TO - Altius Minerals
Post by: finetrader on September 04, 2011, 05:51:47 AM
Quote
Crazy times indeed:

Altius Market cap: $300m

Cash: $190m
Alderon shares : $100m
Royal Gold shares: $38m

Total: $328m

Everything else: $-28m

It seems like the market is pricing Altius as if its stake in Alderon was going to zero.  Meanwhile it prices Alderon as if development will continue.  Something has to give...

What I like is we get Voisey Bay royalty for free. This somewhere between 75-100M worth.

I'm curoius to see what they can recuperate from the refinery project... 5-10M?


I have not seen anybody discounting the ~5M$/year expense in General and administrative.
Would it not more or less cancelled the Voisey Bay royalty ?
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on September 04, 2011, 08:05:32 AM
I have not seen anybody discounting the ~5M$/year expense in General and administrative.
Would it not more or less cancelled the Voisey Bay royalty ?

Don't forget about interest on cash.  I think that currently pays for about half the General and administrative.  Conceptually, to be conservative, I think about the company as essentially being funded by the royalty and the interest on cash.  Even if you cancel the voisey bay royalty out with the G&A it is still cheap.  In my own spreadsheet I also haircut cash and subtract all the liabilities.  But, that is just to look at the numbers in an extra conservative way.  In reality, if you are investing in the company for the long run, you are implicitly assuming that management will be bringing significantly more than $5 million in added value per year...
Title: Re: ALS.TO - Altius Minerals
Post by: goldfinger on September 04, 2011, 11:53:53 AM
I remember having read in a letter or article explaining the Voisey Bay royalty Dalton claiming that the company was essentially funded with it for the next 25 years or so...
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 06, 2011, 01:28:02 PM
Voisey Bay... is Royal gold's largest royalty and is trading there at aPE of above 60 right now...$37 million for less than 6 months will make it the largest contributor to Royal Gold's portfolio in this calender year...
Now if you assumed Royal Gold wanted the rest of it from Altius, how much would they pay for it? If I were getting a multiple like like that I would think about paying a good amount of money to get it...half of their multiple is 30 times...which makes it worth well over $100 million....and immediately at a value in range $ 300 million to Royal Gold. Actually things get better for the value....As Vale is spending about $2.6 billion in capital at Voisey Bay....

http://www.vbnc.com/NickelProcessingPlantCareerInfo.asp

As for admin expenses they were $2.5m, $4.8m in the previuos years...obviously in good years there are bonuses paid.
Income 2 years ago was $4.5 m and this year the Royal Gold share appreciation will add $20m plus. We are not worried about the admin costs as you can see there is a ton of value in this company if you have a look. We think it is ridiculous what you could get for this company in an auction of their assets....
Royal Gold could buy the whole company for less than cash and get the entire purchase price out of their new multiple on Voisey Bay alone!

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Thrifty3000 on September 08, 2011, 05:47:17 AM
Alderon PEA released with a NPV of $3.07 billion:

http://www.alderonmining.com/_resources/news/2011-09-08-NewsRelease.pdf
Title: Re: ALS.TO - Altius Minerals
Post by: bathtime on September 08, 2011, 06:46:13 AM
Alderon PEA released with a NPV of $3.07 billion:

http://www.alderonmining.com/_resources/news/2011-09-08-NewsRelease.pdf

Would that make the NPV of the 3% royalty approx. 90 million?
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on September 08, 2011, 06:48:50 AM
Quote
“We are very excited to see such a high NPV, especially since this PEA is only based on the Rose
Central zone  of the Kami Property.  There is  significant upside once we include North Rose and
Mills Lake,” says Tayfun Eldem, President and CEO of Alderon.  “These positive results allow us to
move directly to the Feasibility Study phase and we expect that report by the third quarter of 2012.”

The PEA demonstrates very attractive project economics.  Based on a production rate of 8 million
tonnes per year of iron ore concentrate at a grade of 65.5% iron and an iron recovery of 82.8%, the
PEA shows a Net Present Value (“NPV”) of US$3.07 billion at a cash flow discount rate of 8%.  The
internal rate of return (“IRR”) for the project is 40.2%.

Wonder what kind of NPV North Rose and Mills Lake have. Anywhere close to Rose Central, or just a small faction? I don't remember seeing anything preliminary on those, but maybe I missed it.
Title: Re: ALS.TO - Altius Minerals
Post by: naboo on September 08, 2011, 07:03:09 AM
Quote
“We are very excited to see such a high NPV, especially since this PEA is only based on the Rose
Central zone  of the Kami Property.  There is  significant upside once we include North Rose and
Mills Lake,” says Tayfun Eldem, President and CEO of Alderon.  “These positive results allow us to
move directly to the Feasibility Study phase and we expect that report by the third quarter of 2012.”

The PEA demonstrates very attractive project economics.  Based on a production rate of 8 million
tonnes per year of iron ore concentrate at a grade of 65.5% iron and an iron recovery of 82.8%, the
PEA shows a Net Present Value (“NPV”) of US$3.07 billion at a cash flow discount rate of 8%.  The
internal rate of return (“IRR”) for the project is 40.2%.

Wonder what kind of NPV North Rose and Mills Lake have. Anywhere close to Rose Central, or just a small faction? I don't remember seeing anything preliminary on those, but maybe I missed it.


"Alderon is presently exploring the Rose North deposit which is not developed sufficiently to be included in the PEA. As the Mills Lake deposit is anticipated to account for a much smaller portion of the overall resource, it has not been included in the PEA."


As mentioned in the release,  Mills Lake is ignored, but I want to know how small that is? (1M, 10M or 100M, or even 1B to be ignored).  I am waiting for the number from North Rose too. Hope it could surprise us.

Market has no reaction to this release.



Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on September 08, 2011, 07:09:04 AM
Market has no reaction to this release.

Mr. Market is so strange sometimes. Alderon is barely up and Altius is actually down. I kind of expected it for ALS, but thought ADV would move more on this kind of news.
Title: Re: ALS.TO - Altius Minerals
Post by: naboo on September 08, 2011, 07:18:24 AM
Quote
"Alderon is presently exploring the Rose North deposit which is not developed sufficiently to be included in the PEA. As the Mills Lake deposit is anticipated to account for a much smaller portion of the overall resource, it has not been included in the PEA."


As mentioned in the release,  Mills Lake is ignored, but I want to know how small that is? (1M, 10M or 100M, or even 1B to be ignored).  I am waiting for the number from North Rose too. Hope it could surprise us.

Market has no reaction to this release.

It seems like Mills Lake is not that small

From their NI 43-101:

Categorized Mineral Resource Estimate for Kami Iron Ore Project
(Cutoff of 20% Tfe)

Category         Zone                   Tonnes (Million)          TFe%  magFe%   hmFe%   Mn%  SiO2%

Indicated         Rose Central       376.1                          29.8   18.6          8.3          1.56    44.9
                        Mills Lake            114.1                          30.5    22.1         5.7          1.02    45.6

Inferred           Rose Central       46.0                            29.8    19.2         8.0          1.61    44.9
                        Mills Lake            71.9                            30.7    22.2         6.0          1.05    4
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 08, 2011, 08:03:33 AM

"Would that make the NPV of the 3% royalty to Altius approx. $90 million?"

no.

You are seeing a cash flow model....Altius royalty is gross sales....

This is also half of the asset assuming they release the 43-101 OF $ 800M TO $1 BILLION....that would take the NPV of the project likely to $6 billion!!! Altius will not make $2.5 billion on it with their 39% stake...so lets not get carried away..but Alderon could be "huge".

The price used is $115 per ton....present price is $180.

So using these numbers...and assuming  a closer price to reality....I will let you do the math on how huge Alderon "could" be. Worth a lot more than the value of Altius right now as we have been saying for sometime. The PEA was better than we thought. We would suspect these returns will bring the big boys to the table...China, Vale, BHP, Rio Tinto...more so after the new resource estimate.

disclosure: we own Altius

Dazel.

Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 08, 2011, 08:09:11 AM
http://www.mbironoreindex.com/

This the iron ore price today...at $181.

Someone will figure out what Altius has found sooner or later...The producers that rely on supply of iron ore will be first and the market next.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on September 08, 2011, 08:25:46 AM
Guys, thanks for the update + commentary.

Have been scaling in. Becoming one of my larger holdings. Probably close to my limit for this type of investment (a company that I don t have a direct familiarity i.e I can t see,touch product,operations etc)

I can t help thinking that it is too good to be true. Does anyone else feel that?

I want to ask, without insulting or hurting anyones feeling as I know that a lot of effort has been put into this one especially by Dazel....What are the chances of fraud or bogus reporting?

I am trying to be unemotional.

Market obviously worried re recession, macro turmoil etc + I am comforted by the fact that it is indifferent to Canadian smaller resource based companies.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 08, 2011, 08:56:31 AM
"I want to ask, without insulting or hurting anyones feeling as I know that a lot of effort has been put into this one especially by Dazel....What are the chances of fraud or bogus reporting?"
Biaggio...of course you will do your own due diligence...

great question...

Their cash hoard is a number of investment successes since 1997...but the largest of these are Aurora...you can see the press releases of stock sales in 2006 on the website. Obviously the public shares of aurora would have seen the values of these share sales. IRC and Royal Gold were also public transactions. We suggest you look at their other deals as well.

Harry Dobson is a legend in the industry and they have worked with him extensively...

They have dealt with cream of the crop since inception.. Rick Rule, Brent Cook to name a few...these guys would and could not have their reputations around anything but the best.

Brent Cook is an adviser to the company...

It helped us to check all of these people and their backgrounds. You will find many more that i have not identified that are linked to Brian Dalton...who himself has an impeccable record in his home province which we also like.

Alderon- we suggest that you look at the people associated with Alderon and their reputations and past experience.

junior resource company's have a bad reputation and about 90% of the profit is produced by 5 % of the people...Leucadia perked our interest when they entered the resource sector. So we looked for the best of the best and we think we found it. But you should take a look at the people involved.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on September 08, 2011, 03:12:32 PM
Thanks Dazel for your reply,

Of course we all should do our due diligence.

Obviously I am a believer in the story.

I generally love balance sheets with a lot of cash on them. I usually assume that the cash is real + trust the auditors in this case Deloite & Touche. Am I naive to have this belief in light of some of the items in regards to fraud/short selling on the other threads- EBIX, Sino Forest.

I am also reassured by the insider ownership, and other highly respected share holders (R Rule, H Dobson).

I am going to review their annual reports + other filings on Sedar.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on September 08, 2011, 07:42:52 PM

Am I naive to have this belief in light of some of the items in regards to fraud/short selling on the other threads- EBIX, Sino Forest.

No fraud at EBIX as far as anyone knows, so don't lump together with Sino Forest please :)
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on September 09, 2011, 05:31:46 AM
Sorry Liberty did not mean it that way,meant the debate on the EBIX thread
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on September 09, 2011, 07:15:11 AM
Sorry Liberty did not mean it that way,meant the debate on the EBIX thread

No worries, I just wanted to make sure that people who follow this thread but not the one at EBIX wouldn't read that and conclude: "Ah, so they did find something bad at EBIX..." ;)
Title: Re: ALS.TO - Altius Minerals
Post by: orion on September 09, 2011, 08:17:04 AM
Hi, after reading the discussion I think this is a very compelling idea. But, unfortunately for me, this topic (Mining, Exploration) is way out of my "circle of competence". Beside reading Altius´s reports, do you have any recommendations to get a better understanding, how things work in this sector? Websites, books, etc.

Thanks
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on September 09, 2011, 08:40:11 AM
Hi, after reading the discussion I think this is a very compelling idea. But, unfortunately for me, this topic (Mining, Exploration) is way out of my "circle of competence". Beside reading Altius´s reports, do you have any recommendations to get a better understanding, how things work in this sector? Websites, books, etc.

Thanks

This might help:

http://www.cornerofberkshireandfairfax.ca/forum/index.php?topic=5141.msg54591#msg54591
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on September 09, 2011, 11:31:05 AM
Looks like someone finally noticed today. ALS up 6.17%. Probably because Altius sent a press release about Alderon..

Meanwhile, Alderon's down 4.4%.. Oh Mr Market...
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 13, 2011, 06:07:16 AM
http://finance.yahoo.com/news/Alderon-Announces-Initial-iw-3746666263.html?x=0


Alderon beat their own estimates...over 1 billion tonnes!!! take a look at the evaluation numbers and plug in some numbers and  this is a home run. It really look looks like Thompson Consolidated 2...I am sure that Altius will be extremely busy in the next while as there will great interest from the mining giants that missed the Thompson story.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on September 13, 2011, 06:35:01 AM
That's great news!
Title: Re: ALS.TO - Altius Minerals
Post by: Williams406 on September 13, 2011, 09:42:01 AM
If I'm reading things right, today's resource estimate basically adds 480 million tonnes of inferred resource from North Rose to the already existing 118 million tonnes of inferred from combined Rose Central and Mills Lake. The 490 million tonnes of indicated resource from April's report remains the same. I'm guessing a few hundred more holes moves a lot of that inferred # to the indicated class. Please correct me if I'm wrong.

Has anyone looked at Thompson's reserve numbers at a similar stage? The first reserve estimate I see on sedar is dated 3/29/2007 for Thompson. Looks like inferred of 35 million tonnes and measured/indicated of 638 million tonnes. I'm not at all sure how useful that info is given different drilling paces. I did not compare # of drill holes or anything to see if comparing certain resource estimates between the two companies represents a useful analog. Just curious if anyone with more mining knowledge than me (ahhh...I see a great many hands raised) has torn that angle apart.

Anyway, the reserve estimate looks good.

406
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 13, 2011, 06:46:51 PM

yes you are correct...they want to have the 1 billion tonnes upgraded to "measured and indicated" as the Thompson release had (630m measured and indicated)...the latest inferred tonnage had 25 holes in its estimate...the first resource estimate had 68 holes...

http://www.alderonmining.com/_resources/news/2011-06-09-NewsRelease.pdf ...this explains there goal of the summer and fall drilling program.

The press releases over time took up the shares of Thompson as will likely be the case with Alderon as they drill more holes...It should be exciting times for Alderon over the next while.



Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on September 13, 2011, 07:33:12 PM
Dazel, do you own any Alderon directly or do you get all your exposure through Altius?
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 14, 2011, 08:51:00 AM

We have sold Alderon to add more to Altius.

Alderon will likely do better but we like the margin of safety  and the other catalysts at Altius. At some point the sum of the parts and the managment at Altius will be valued.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on September 16, 2011, 05:47:47 AM
Alderon mention.  Pulled this off the stockhouse forum:

http://watch.bnn.ca/market-call-tonight/september-2011/market-call-tonight-september-15-2011/ShowAllClips/#clip533104
Title: Re: ALS.TO - Altius Minerals
Post by: MrB on September 16, 2011, 06:30:51 AM
BC mention reminds me of the following, which might have been posted here before...

Paul V Eden: "...That is why Altius is still the single largest position in my portfolio. . .by a wide margin...."

http://www.gold-speculator.com/gold-report/40031-brent-cook-tete-tete-paul-van-eeden.html
Title: Re: ALS.TO - Altius Minerals
Post by: GrayFan on September 20, 2011, 06:16:46 AM
Century Iron Mines and Altius Minerals Sign Principal and Royalty Agreements on Four Labrador Iron Ore Properties

http://www.pr-inside.com/century-iron-mines-and-altius-minerals-r2819258.htm
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on September 20, 2011, 07:08:35 AM
Anyone has info on century iron mines? Couldn't find much, but if Altius likes them they must have potential. The Chinese partners certainly are a good sign.

http://www.centuryiron.com/
Title: Re: ALS.TO - Altius Minerals
Post by: MrB on September 20, 2011, 01:44:38 PM
http://www.championminerals.com/docs/CHM_%20Presentation%20September_2011_FINAL.pdf

Page 7 of the above shows a comparable companies analysis. Comparison is based on EV/Contained Fe (US$/t) and (EV+Capex) / Contained Fe (US$/t)

I'm interested to know how Kami/Alderon compares, but I'm missing some data. Would be great if anyone can fill the gaps. 


Alderon EV C$210m
The only capital cost number for Kami I have is for Rose Central US$989m (*p18)
Anyone knows what the Contained Fe is for the Kami projects?


* http://alderonmining.com/_resources/presentations/presentation.pdf
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 20, 2011, 02:32:00 PM
http://www.alderonmining.com/_resources/news/2011-09-08-NewsRelease.pdf

Mr. B,

Have a look at this (above) it should give you what you need...I think...

While Champion minerals has a very nice resource you have to look where it is....the PEA they released was from 2010 and cost have likely sky rocketed since then.  They also have several members of the old Thompson Consolidated group. You have to look where they are though...they need "62 KM OF RAIL" to be built to hook up to the Bloom lake rail connection. I do not pretend to be an expert but this is a lot...their resources are spread out all over the place (look on the map where they are-Alderon is to the right of Bloom Lake and not far from Wabush...It is not labelled on their map...they are very south of Bloom Lake in Quebec) as well ...so it is not as economical as Alderon because the infrastructure is north where Alderon is...

Alderon is closer to the rail connection then Thompson consolidated was....I believe it is 12km's to reach the rail line...their cost for the rail construction is around $45m in their PEA. Location is the key to bringing down costs as we know and Alderon has a more concentrated resource that is closer to all that is needed. It will be interesting to see if they include that chart in their new presentation with Alderon in it. As you know Alderon was not around when they did their last PEA.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: moore_capital54 on September 20, 2011, 02:34:36 PM
Gents, be careful with these iron plays you are throwing around here. Remember the most important element of an iron ore mine is INFRASTRUCTURE. The earth's crust is made up of 6% Fe. Its not rare at all.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 20, 2011, 02:48:57 PM
"Gents, be careful with these iron plays you are throwing around here. Remember the most important element of an iron ore mine is INFRASTRUCTURE. The earth's crust is made up of 6% Fe. Its not rare at all."

agreed... this is my point.

As Brian Dalton said about Alderon " It is our address that is important".

I would suggest that all who are looking at this look at the map of "where" Alderon actually is....and where the infrastructure is in the Labrador iron ore district. Alderon think they are better positioned then where Thompson Consolidated was in terms of infrastructure and rail. Obviously costs have risen but the price of iron ore has risen too.


Title: Re: ALS.TO - Altius Minerals
Post by: moore_capital54 on September 20, 2011, 02:51:03 PM
I disagree that Alderon is better positioned than Consolidated Thomson.

I do agree that Alderon is better positioned than the other names recently thrown out here.

Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 20, 2011, 03:01:51 PM


Just to compare apples to apples...The former CEO of Alderon was referring to the rail and infrastructure for starting the mine in comparison to when Thompson started...they are geographically closer to the rail system.

who is better situated then Alderon in your opinion anyone?
Title: Re: ALS.TO - Altius Minerals
Post by: moore_capital54 on September 20, 2011, 03:03:49 PM
IOC which has plenty of iron and can ramp up production :) Plust it owns the railway.

I personally feel Alderon is fairly valued.

I don't tend to buy Juniors at such high valuations. Remember they still need to build the mine (and maybe rail in their case).



Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 20, 2011, 03:15:48 PM
http://alderonmining.com/_resources/kami/Location_and_Infrastructure1.jpg

Not arguing with you as you know I own Altius....but IOC..a mine of 50 years (aahh the royalties Altius would have over 50 years!)?

The map above will show the other posters what we are talking about...by the way Alderon is closer to IOC than Thompson....for fun! Good company for neighbors and surrounding infrastructure..we will leave it at that.

Dazel.

Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 20, 2011, 08:10:20 PM
http://www.caseyresearch.com/nexTen.php?id=2


A good piece on Brian Dalton...for those who do not know Doug Casey there is a link below.

http://en.wikipedia.org/wiki/Doug_Casey

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: MrB on September 21, 2011, 03:18:58 AM
http://www.ft.com/intl/cms/s/0/5defb86a-e3a6-11e0-bd3d-00144feabdc0.html#axzz1YWNE7jtV

Rio Tinto warns of slowdown in demand
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/5defb86a-e3a6-11e0-bd3d-00144feabdc0.html#ixzz1Ya56Q77u

Rio Tinto, one of the world’s largest natural resources companies, has warned that some of its customers were asking to delay shipments of metals, in a clear sign that the financial turmoil is starting to affect the commodities sector.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 21, 2011, 06:19:14 AM

http://www.mbironoreindex.com/

India is pushing for export tariffs which very positive for Canada.....and the spot price for iron ore has held despite a quiet market....steel production for August was up 9% year over year...that is about the only thing I have seen that is up year over year!

Title: Re: ALS.TO - Altius Minerals
Post by: MrB on September 22, 2011, 01:04:00 AM
http://www.bloomberg.com/news/2011-09-21/iron-ore-s-four-year-slide-hitting-mining-earnings-commodities.html
Iron Ore’s Longest Slide Since ’82 Threatens Mining Earnings: Commodities
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on September 22, 2011, 11:20:42 AM
Days like this remind me of the recent interview with one of the altius guy, where he said "bring on the bloodbath", because they wanted to spend some of their cash. Looks like they're getting their wish.
Title: Re: ALS.TO - Altius Minerals
Post by: value-is-what-you-get on September 22, 2011, 12:29:51 PM
http://www.bloomberg.com/news/2011-09-21/iron-ore-s-four-year-slide-hitting-mining-earnings-commodities.html
Iron Ore’s Longest Slide Since ’82 Threatens Mining Earnings: Commodities

I've seen some shoddy journalism and this ranks right up there.  "Reporting" on a predicted price drop four years out on projected numbers as if it's happened already - wow!  Is this a contrarian indicator?
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 23, 2011, 09:06:35 AM
http://www.franco-nevada.com/files/Franco-Nevada_Lumina_Press_Release_0.pdf

this deal was announced yesterday....if these early stage royalties are worth $66m what are Altius royalties worth? Take out Voisey  as it is currently a producer and you have a lot of value that is free...and as we see above there are company buyers for these assets even in this crazy environment.

What would it be worth if they spun out the royalties into a separate company? remember that Royal Gold and Franco Nevada are getting 50 to 60 pe's on this stuff.

Franco-Nevada was part of the bidding process for IRC royalty and put a bid in for the assets that Royal Gold trumped.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 29, 2011, 10:02:43 AM
http://www.mbironoreindex.com/


The price of iron ore is down...5.5% over the last couple of months and is still at $170 per ton.....
let s put that in perspective because these are real prices that are negotiated by buyers and sellers who mine and use the iron ore. These prices are not determined by futures traders "YET"...yes they should likely come down some more

Alderon's long term pricing for the their mine plan is $118 per ton...there is a good margin for error....and the costs of construction have just come down as well..(this month anyway!)

copper is down 28% in the same time period...

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on September 29, 2011, 10:27:59 AM
Thanks Dazel, good to see that iron ore seems to be holding up relatively well.

My ideal scenario is for the market to stay soft a while longer, allowing ALS to deploy cash in undervalued equities and royalties, but not so down that Alderon is put on hold. And then by the time Alderon is getting closer to shipping ore, things start to pick up again.. Best of both worlds :)

We'll see how it plays out.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on September 29, 2011, 12:08:41 PM
Looks like they've repurchased almost 36k shares last month:

http://canadianinsider.com/coReport/allTransactions.php?ticker=als
Title: Re: ALS.TO - Altius Minerals
Post by: naboo on September 29, 2011, 01:15:39 PM
Alderon Sees Massive Kami Production

http://resourceclips.com/2011/09/28/the-iron-hub/
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on September 29, 2011, 01:35:08 PM
Alderon Sees Massive Kami Production

http://resourceclips.com/2011/09/28/the-iron-hub/

That was great, thanks!
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on September 29, 2011, 01:38:10 PM
http://www.marketwatch.com/story/altius-minerals-corporation-tsx-als-reports-first-quarter-net-loss-of-1588000-2011-09-29
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 29, 2011, 02:38:23 PM
http://www.altiusminerals.com/files/fs_1317325332.pdf

Here is the link from Altius...

$8m tax payment was a drag on cash and their share of alderon's loss was $1.3 million that flowed through...was the loss.

-Voisey Bay royalty stream was $1m for the quarter (double last year)...they said annualized will be $4 to $4.5 million

-they detail several projects...they have been busy...and are heavily marketing their iron ore holdings that are substantial...Rio Tinto has been drilling through their partnership agreement

-they have been searching for gold in the north west territories this summer...interesting

-should be a very interesting fall when all of the results of their work are released

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 30, 2011, 05:17:35 AM


Rick Rule went on record this week that he was buying and was extremely excited about mining stocks. Altius is part of his and the other great investors (eric sprott is now partners with Rule) in the resource network. Rick Rule was part of the IRC deal that Altius did very well in. We expect to see Altius and Paul Van Eden to deploy some capital during this malaise. All of the above are the best in the business at these types of investments. Altius has the cash ready to take advantage of these prices. Their patience will pay off.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: gurjot on September 30, 2011, 05:09:41 PM
hello dazel,
 do you have a link to where rick rule spoke?
thanks
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on September 30, 2011, 09:48:40 PM
New bulletin:

http://www.altiusminerals.com/files/Altius2011_TabloidBrochure_book.pdf
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on October 01, 2011, 07:50:08 AM
I'm happy to have 12% of my portfolio in Altius, I don't know much about resources so I'm glad to delegate to them. It's a nice way to put some resources exposure below book value. Love the citation below.


When we enter into a direct project-level agreement or create an indirect equity interest around a generated project we put
heavy emphasis on the structuring of royalty interests that will reward us should the project reach development and
production. We variably refer to this as our “royalty creation” or “organic royalty” portfolio. Interestingly, this route works best
in strong resource development markets so acts as a natural hedge to the royalty acquisition strategy


BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on October 02, 2011, 03:53:33 PM

http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/9/19_Rick_Rule.html
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on October 05, 2011, 08:59:51 AM
After looking closer at Altius' financials it it appears they have at least trimmed Royal Gold prior to July 31st...if this is the case than they more than likely would have sold out of their position when it hit the $80's  in August. It looks like they would have left some money on the table at royal gold  but it also would have added to liquidity during the panic selling over the last couple of months...I am hopeful they (as well as Van Eden) did a lot of buying over the last month!! $200m and no debt puts them in about the best position of any company we see on a per share basis in this environment. We will likely see their merchant banking skills at work.

October will also bring color on NLRC as they had until now to look at other options for company before going back to bankruptcy court.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on October 05, 2011, 09:12:18 AM
Dazel, do you have an idea of their average cost on Royal Gold?
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on October 05, 2011, 02:24:33 PM


Their real average cost 0...they have received their original cost base in cash and the gain was received in shares. Bu they had to mark to market it each quarter so the share exchange was around $40...at 80 they would have doubled their winnings so to speak as I discussed earlier but it is tough to tell what other securities they own so I ma not sure what was sold...

they will have to pay tax on the gains when they sell their Royal shares as if their cost base is 0 to answer your question.

That is why we are so excited about his downturn as we hope to have a couple of more of these big wins!

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on October 05, 2011, 03:07:36 PM
Cool. Except for the taxes, that's better than I expected :)
Title: Re: ALS.TO - Altius Minerals
Post by: RolfGunderson on October 05, 2011, 03:24:29 PM
Dazel, do you have an idea of their average cost on Royal Gold?

A bit more colour:

From 2010 AR (June, 2010):

"The IRC Shareholder vote was held on February 16, 2010 and the results of the shareholder vote were positive. Upon court approval
and closing the Corporation received $37,520,000 in cash and 529,297 shares in RG Exchange Co Inc representing estimated total
proceeds of approximately $63,132,000 and recorded an estimated gain of approximately $28,413,000. The RG Exchangeable shares
have all the rights of Royal Gold common shares and are convertible into Royal Gold common shares at the option of the holder."

DP
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on October 06, 2011, 07:25:46 AM
http://finance.yahoo.com/news/Alderon-Reports-Results-From-iw-2522420490.html?x=0

more good news...from Alderon corp..the stock has recovered with good reason.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on October 06, 2011, 07:31:25 AM
http://finance.yahoo.com/news/Alderon-Reports-Results-From-iw-2522420490.html?x=0

more good news...from Alderon corp..the stock has recovered with good reason.

Dazel

With my limited understanding of how these things work, I'm parsing this as: They're hitting about 30% grade on all their drill holes.

That seems like great news in itself, but is there something I'm missing, or is that the main takeaway here?

As usual, thanks Dazel for posting this :)
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on October 06, 2011, 07:32:06 AM
http://www.mbironoreindex.com/

iron prices rose for the first time in a month! they are one of the best performing asset classes on the planet behind the $U.S dollar (which makes the iron price actually up in world currency), and U.S Treasuries.

iron ore is currently Altius' largest asset....we hope to see them cash in this year...as the world takes notice.

Dazel.

Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on October 06, 2011, 07:39:25 AM

Liberty,

you are correct...they need to drill more holes to cover more area to take the resource from inferred to indicated...and then measured...more drill holes have to happen to make this happen...this is another step...feasibility and measured usually come around the same time...every step takes them closer to production and obviously gets the attention of the market and iron ore players...the closer they get to production the more valuable the asset.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: shalab on October 08, 2011, 09:24:43 PM
Reading the proxy statement, seems like a bunch of options ~350K are vesting for Dalton in 2013 through 2015. Ditto for senior managers. Also, Dalton pay went up.

Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on October 11, 2011, 02:15:46 PM
http://finance.yahoo.com/news/Alderon-Commence-Trading-iw-1952305287.html?x=0

Alderon will begin trading on the tsx tomorrow. This will give them greater exposure to international and other investors that
do not buy stocks on the venture exchange.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on October 13, 2011, 08:18:48 AM
Anyone else having trouble finding the new TSX Alderon? I can see it in TD Waterhouse, but not in Google Finance or Yahoo Finance. I'm guessing it takes a bit of time for them to start tracking it in its new location, but maybe I'm missing something..?
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on October 13, 2011, 10:24:31 AM
Quote
Canadian-focused Rambler Metals and Mining has announced the resignation of non-executive directors Brian Dalton and John Baker from its board.

This resignation follows the sale by Altius Investments, a subsidiary of Canadian miner Altius Minerals, of its 12% interest in Rambler in January this year. Dalton is chief executive of Altius and Baker is a director.

Harry Dobson, chairman of Rambler, said: 'On behalf of the senior management and the Board I would like to thank Brian and John for their efforts over the past five years and wish them every success in future endeavours.

'Their guidance and expertise in the minerals sector, particularly in Newfoundland and Labrador, has played an indispensable role in advancing the Ming Mine through the various stages of exploration and into production for the fourth quarter of 2011.

'As Rambler continues to transition into a mid-tier mining company it will continue to look to strengthen the board with members of international pedigree and with quality networks, capable of assisting with the next phase of growth.'

http://www.stockmarketwire.com/article/4239257/Altius-directors-leave-Rambler-board.html
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on October 20, 2011, 12:29:18 PM
http://www.altiusminerals.com/files/PR1011-%20AGM.pdf


Quote
St. John’s – Altius Minerals Corporation (‘Altius”) advises that it has postponed its Annual and Special Meeting from Wednesday, October 26, 2011 to Wednesday November 30, 2011.    

Due to an undetected printing error, a significant number of copies of the Altius proxy circular that were
mailed to shareholders for Altius’ upcoming October 26, 2011 annual and special meeting of shareholders
inadvertently omitted certain pages that contained, among other things, disclosure relating to the election of
Altius’ directors, as well as the approval of its stock option plan and ratification of existing options.

As a matter of good corporate governance practice, and to ensure that all shareholders are able to make an
informed decision as to the matters to be considered at the meeting, the meeting has been postponed and a
new circular is being mailed to all shareholders
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on October 21, 2011, 05:46:10 PM
Iron ore the latest commodity to slide

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/iron-ore-the-latest-commodity-to-slide/article2208495/

vs

listening to talking head who said that i. China has $5 trillion worth of infrastructure projects coming (time period unknown-sorry...still sounds like a huge number + I am sure we will have some downs + ups along the way)
                                                         ii. they are putting 1 million cars on the road every month (I though I heard this, could this  possibly be right)
     
Title: Re: ALS.TO - Altius Minerals
Post by: Thrifty3000 on October 25, 2011, 10:46:23 PM
Planned production of 16 million tonnes per year:

http://www.alderonironore.com/_resources/news/2011-10-25-NewsRelease.pdf
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on October 27, 2011, 06:32:20 AM
Quote
Alderon Iron Ore Corp. (TSX:ADV) (OTCQX: ALDFF) ("Alderon") is pleased to announce the intended appointment of Bernard Potvin as Executive Vice President, Project Execution, effective as of November 14, 2011 and Keith Santorelli as Chief Financial Officer, effective as of November 28, 2011. Upon the effective date of appointment of Mr. Santorelli as Chief Financial Officer, Ms. Sonya Atwal will resign as Chief Financial Officer.

Mr. Potvin has over 37 years of experience in mining and processing operations and brings with him substantial expertise in engineering, maintenance, project development and construction. Throughout his career Mr. Potvin has held senior roles at Quebec Cartier Mining, Reynolds Metals, Alcoa and the Iron Ore Company of Canada ("IOC"), a Rio Tinto subsidiary. During his tenure at IOC, Mr. Potvin held the role of General Manager of Expansion Projects, successfully managing green and brown field expansion projects in Labrador City and Sept Îles. Mr. Potvin has extensive project management experience in iron ore and aluminum, and has executed a number of successful projects in excess of $1 billion. Mr. Potvin holds a Mechanical Engineering Degree from Laval University.

Mr. Santorelli is a Certified Public Accountant with over 16 years of experience, including working for a publicly traded biopharmaceutical company for the past three years as Vice President, Finance. He has a wide range of expertise in various areas of complex US GAAP and IFRS accounting in both publicly traded and private companies in the United States, Canada and internationally. Keith also has experience in group structuring and financing, IFRS conversion and training, financial management, external reporting and employee professional development. Mr. Santorelli holds a Bachelor's degree in Accountancy from the University of Massachusetts, as well as an MA from McGill University, and speaks four languages.

Tayfun Eldem, President and Chief Executive Officer of Alderon states, "I am thrilled with the additions of Keith and Bernard to the Alderon team. They will be based in Alderon's growing Montreal office and their expertise and contributions will be invaluable in the continued development of the Kami Project."

Alderon further announces the resignation of Brian Penney as Chief Operating Officer in order to accept a Chief Executive Officer role with another iron ore development company in the Forbes & Manhattan group. Mr. Penney will continue his involvement with Alderon on a consulting basis.
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on October 27, 2011, 08:43:13 AM
So, iron ore prices have finally collapsed, and continue to fall.  http://www.mbironoreindex.com/ Price yesterday was $122 for 62%. 

I had the idea that since there really isnt much of a speculative element in the iron-ore market (relative to other metals/commodities) that would lead to less volatility compared to say gold or oil.  I also thought that since marginal production costs in china are estimated over $130 per ton, that would provide something of a medium-term floor.  Seems like both of those ideas (at least in the short term) are wrong. 

The silver lining is the altius/alderon share price isnt really following iron ore prices.  And, a short-term collapse in iron prices might actually be good for alderon's development from the point of view that the lower iron prices might wipe out some of their competition trying to get access to the same rail.  It would however be nice to see a stronger share price in the short term for alderon if that would lead to a better off-take agreement. 

Anyone have any commentary to add?

Also, still no news regarding NLRC or the annual report.  And delaying the annual meeting one month due to "printing errors" on the proxy circular?  Not sure how common that is.....
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on October 28, 2011, 06:35:08 AM
Anyone have any thoughts on this article:

http://ftalphaville.ft.com/blog/2011/10/28/715136/oh-the-iron-y/
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on November 02, 2011, 07:15:43 PM
Interview with alderon ceo, Eldem, pulled off the stockhouse bullboards:

http://www.cbc.ca/labradormorning/episodes/2011/10/31/alderon-iron-ore-corporation---a-step-closer-to-a-new-mine-in-western-labrador/
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on November 02, 2011, 08:29:23 PM
Thanks for posting!
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on November 04, 2011, 11:32:38 AM
http://www.proactiveinvestors.com/companies/news/20588/millrock-resources-oodles-of-potential-within-its-project-generator-business-model-20588.html
Title: Re: ALS.TO - Altius Minerals
Post by: MrB on November 07, 2011, 07:41:12 AM
27 Oct -- Commodore Research..."Chinese spot iron ore demand has remained under pressure as we have anticipated.  During the first four days of this week, only 8 vessels have been chartered to haul iron ore to China.  The weekly total is likely to come in close to the minuscule 11 vessels that were chartered to haul iron ore to China last week.  In comparison, an average of 23 vessels were chartered to haul iron ore to China during each week in September.  Chinese steel production has come under more pressure as we have predicted.  The decline in steel production and iron ore demand has not come as a surprise, as last week marked the sixth straight week that Chinese steel prices decreased and the eighth straight week that Chinese steel stockpiles increased.  For prices to find support and for stockpiles to be able to be drawn down, Chinese steel production had to come under pressure."
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on November 14, 2011, 04:41:04 PM
http://www.benzinga.com/pressreleases/11/11/m2118105/century-iron-mines-announces-update-on-its-acquisition-from-altius-mine


This is quite a deal! I did not realize the potential here.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on November 14, 2011, 05:01:33 PM
http://www.mbironoreindex.com/


iron ore has rallied back from $116 to $137...It had a dramatic drop on China holding back purchases....taking Alderon and Altius down with it..we should see some realization that the price has stabilized and china has not disappeared quite yet!

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on November 14, 2011, 05:52:02 PM
Dazel, thanks for the update.

What's the opposite of a "black swan" i.e. an unexpected good outcome?
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on November 14, 2011, 09:37:11 PM
Still waiting for the annual report.. wasn't it supposed to come out around August-September?
Title: Re: ALS.TO - Altius Minerals
Post by: MrB on November 15, 2011, 12:48:46 AM
40m shares, $28m spent on exploration and royalties on top of that? Looks to me like FER is in heat! ;D
Title: Re: ALS.TO - Altius Minerals
Post by: netnet on November 16, 2011, 10:22:40 AM
Dazel, thanks for the update.

What's the opposite of a "black swan" i.e. an unexpected good outcome?

It's still a black swan, just one on the upside!
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on November 17, 2011, 08:22:19 AM
http://www.mbironoreindex.com/com/



Iron ore prices are coming back as quickly as they fell.....this bodes very well for altius. Now almost 150 from 115....remember that alderon's number is 118 for their projections.




Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on November 17, 2011, 08:45:35 AM
Good to hear. I'm expecting more volatility for a while, but good to see that it can go back up that quickly.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on November 18, 2011, 07:56:53 AM

We are enjoying watching the share count go down daily....the longer we are down at these levels the better for the long term investor. It's very nice to have altius sitting on a boat load of cash in this environment...as they have many accretive options.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on November 18, 2011, 08:29:12 AM
Good point. I hadn't checked canadianinsider.com in a while, but I see that they've been buying between 3k-8k shares/day lately. Very nice.

Now if only they could release the annual report, I'd have zero complaints.
Title: Re: ALS.TO - Altius Minerals
Post by: MrB on November 22, 2011, 06:01:25 AM
Century Iron Mines Corporation And Altius Minerals Corporation Announces Completion Of Acquisition By Century Of Altius Labrador Iron Ore Properties

Century Iron Mines Corporation and Altius Minerals Corporation announced that their previously announced transaction to acquire four regional iron ore projects in the Labrador Trough has been completed. Century and Altius have entered into a principal agreement pursuant to which Century has agreed to acquire the right, title and 100% interest in and to four groups of early-stage iron ore properties located in the Labrador Trough region of western Labrador held by Altius. These are the Astray, Grenville, Menihek and Schefferville properties (Projects). The consideration for the acquisition of the Projects was more fully disclosed in the Century News Release dated November 10, 2011. As part of the Closing of the transaction, Century and Altius have entered into a royalty agreement pursuant to which Century has granted and will pay to Altius a 1% to 4% sliding scale gross sales royalty in respect of iron ore produced from the Projects on terms and conditions as set out in the Royalty Agreement. The Company has also agreed to incur aggregate exploration expenditures on the Projects in a minimum amount of $28,000,000 and make certain share payments to Altius over a five-year period following the Closing Date contingent on the achievement of NI-43-101 resource definition milestones as previously disclosed.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on November 22, 2011, 06:57:41 AM
http://www.alderonironore.com/_resources/news/2011-11-22-NewsRelease.pdf


    
Quote
Alderon Resource Upgrade Program Continues On Course

Alderon Iron Ore Corp. (TSX:ADV) (OTCQX: ALDFF) ("Alderon") is pleased to announce additional assay results from the ongoing drill program on the 100% owned Kamistiatusset ("Kami") Iron Ore Project in western Labrador. These results are from the Rose Central Zone and are all within the currently defined National Instrument ("NI") 43-101 resource estimate. They will be used to upgrade the resource from the indicated and inferred to the measured and indicated categories in preparation for the Feasibility Study.
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on November 22, 2011, 09:53:44 AM
Is that me or the concentration on the new drilling holes is lower then their inferred resourced estimates?

BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on November 22, 2011, 09:59:04 AM
Is that me or the concentration on the new drilling holes is lower then their inferred resourced estimates?

BeerBaron

It is, but it was my impression that maybe these were not drilled in the most promising areas (which are those that were drilled first and used for the official estimates), but rather that they are 'bonus'. I could be wrong about that, though.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on November 30, 2011, 08:13:50 AM
http://www.marketwatch.com/story/altius-tsx-als-provides-update-of-labrador-west-iron-ore-option-agreement-with-rio-tinto-exploration-canada-2011-11-30?reflink=MW_news_stmp

Quote
ST. JOHN'S, NEWFOUNDLAND AND LABRADOR, Nov 30, 2011 (MARKETWIRE via COMTEX) -- Altius Minerals Corporation ("Altius") is pleased to report on exploration activities for its earn-in Option Agreement with Rio Tinto Exploration Canada ("Rio Tinto") in western Labrador, Canada. Under this agreement Rio Tinto may earn up to a 70% interest in 15 map-staked mineral licenses comprising 586 claims covering 14,650 hectares in western Labrador. The optioned licenses have been divided into six different prospects as follows: Bruce Lake, Goethite Bay, Carol Lake, Campground, Huguette Lake and Green Water Lake.

During the 2011 field season, Rio Tinto completed a total of 2633 metres of drilling on the Goethite Bay prospect. The Geothite Bay prospect is located approximately 17 km north east of Iron Ore Company of Canada's Carol Lake operation and 6 km north of the Julienne Lake deposit. Rio Tinto has reported to Altius that drill hole 11LB0027 intersected 279 m @ 29.8% Fe, including 157 m @ 31.9% Fe and 90 m @ 31.9% Fe. Additional drill results are pending.

Altius has received formal notice from Rio Tinto that it has met its first option earn-in obligations on Altius' Labrador West project north of Labrador City by incurring $3 million in exploration expenditures and has therefore earned a 51% interest in the properties. Rio Tinto has a second option to earn an additional 19% property interest by spending an additional $4M by December 2013. In addition to its project interest, Altius retains a 3% gross overriding royalty, 1% of which may be purchased by Rio Tinto for $10 million within the 10th anniversary of the agreement.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on November 30, 2011, 12:39:42 PM
Via SH board, Alderon Helicopter crash:

http://www.cbc.ca/labradormorning/episodes/2011/11/29/labrador-west-helicopter-crash---update-from-alderon/

Thankfully, only minor injuries for the people on board, apparently.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 02, 2011, 06:01:15 AM


For Those waiting for an annual report....there is not one coming....fine details are on sedar which is where I do my due diligence...the annual bulletin serves as their annual...the new "information age" they say...I like that saves money!

I have been quiet here for awhile...we love what management is doing...and we are happy to just sit here and watch their shares get cancelled day by day...the market will figure this one out..but hopefully after they retire a ton of shares!

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on December 02, 2011, 06:57:35 AM


For Those waiting for an annual report....there is not one coming....fine details are on sedar which is where I do my due diligence...the annual bulletin serves as their annual...the new "information age" they say...I like that saves money!

SEDAR is such a crappy site, I had to do print to PDF to save it..

Too bad about the report -- I like how it saves money, but I also thought they had some of the nicest-looking reports around..

Quote
I have been quiet here for awhile...we love what management is doing...and we are happy to just sit here and watch their shares get cancelled day by day...the market will figure this one out..but hopefully after they retire a ton of shares!

If I might ask, are you still accumulating or do you have all that you want? If not, you once said you might reveal your average cost once you were doing buying :) I'm still curious.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 04, 2011, 06:51:24 PM


I will take the 5th.....
The longer we are here or lower the better for us....and altius longer term.
Sshhhhhh.

Dazel.

Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on December 05, 2011, 07:26:27 AM
Fair enough, no pressure :)
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on December 14, 2011, 07:04:22 AM
http://www.altiusminerals.com/files/PR%2011-13-Financials.pdf

Quote
St. John's - Altius Minerals Corporation ("Altius") reported a net loss attributable to common shareholders of $2,868,000 or $0.10 per share for the three months ended October 31, 2011 compared to net earnings of $2,138,000 for the same period last year.  The current year's loss includes the Corporation's share of losses in Alderon Iron Ore Corporation ("Alderon") of $1,790,000 and mineral property write-downs totaling $1,055,000.  Offsetting these amounts was an increase in royalty revenue to $723,000 compared to $648,000 in the previous year.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 14, 2011, 08:16:39 AM

The report offers no surprises.....we took a couple of very positive pieces from the report...

Most importantly they are seeing "opportunity" in royalty financing and other deals in the market place....this is the first time we have seen them say this since 2008....
While we feel good holding a huge cash position and buying back shares....however, we see the opportunity for greatness in altius in their management...we would like to see them take advantage of the carnage in the sector and use their expertise and their position to get great deals in the companies that need to raise capital or in strategic acquisitions for sales of parts are all of assets. We think that they are capable of making Leucadia like invesments during times of distress (which we are in now)...so we are looking forward to hearing about this over the next little while. The international royalty deal was an excellent example of what they are  likely to do.

They also sound very excited about their other iron ore projects...as it sounds like we should see some more deals coming.

A quiet but major event will happen on December 19th....the vote on whether to lift the moratorium on uranium mining in the central belt of Labrador....this would be extremely positive for altius as paladin could move ahead with their project and the altius 2% royalty...would kick in.

For those watching...cameco  and rio tinto had a Bidding war for hathor uranium...altius has other projects and potential projects in the region.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on December 14, 2011, 08:24:01 AM
Thanks for sharing your thoughts, Dazel.

Most importantly they are seeing "opportunity" in royalty financing and other deals in the market place....this is the first time we have seen them say this since 2008....

I'm curious where you saw them say this. I probably missed it..

I know that a few months ago someone from Altius said something like that about having the chance to deploy capital if there was a "bloodbath", but I'm curious to know if they've said it again recently.

Edit: nevermind, I'll answer my own question:

Quote
The value of the Corporation’s shares in junior exploration and early stage companies declined
during the quarter in tandem with broader market declines for early stage resource companies. 
However,  the  weaker market conditions have resulted in the Corporation  seeing  increased
opportunity to provide royalty financing as  an  alternative to equity and debt financing for
development stage projects. The Corporation is currently  evaluating  several  royalty
financing/investment opportunities  in hopes of identifying royalty investments that meet its
objectives in terms of value and underlying asset quality. Considering the Corporation’s strong
balance sheet, with over $175 million in cash available, it is well positioned to take advantage of
such opportunities
Title: Re: ALS.TO - Altius Minerals
Post by: MrB on December 14, 2011, 11:23:49 AM
I don't think I've seen this before. Page 20 of the interims.

"A subsidiary of the Corporation, 2260761 Ontario Incorporated, holds a 22.8% interest in Sparkfly Inc., a private Georgia corporation that operates an innovative promotions & rewards platform integrated with retail point of sale systems."

Either the auditors mixed up information from another company with Altius' or this is exciting news! Management is now going to use its considerable expertise in mining and exploration and apply it to the coupon business!!.......In Georgia!!!?

Furthermore, Note 8 has $3.1m for additions to investments in associates, which I assume is for Sparkfly.

Note 11. 19% jump in G&A for 6months YoY and 26% 3months YoY.
Note 16. 26% jump in key management and directors compensation for 6months YoY and 18% 3months YoY.
Note 17. Royalty and investment income $723k for 3 months, so roughly $2.8 annualized. Does this include Voisey Bay?
Further on in note 17. Corporate costs 41% higher compared to 1 year ago.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on December 14, 2011, 01:05:27 PM
A quiet but major event will happen on December 19th....the vote on whether to lift the moratorium on uranium mining in the central belt of Labrador....this would be extremely positive for altius as paladin could move ahead with their project and the altius 2% royalty...would kick in.

http://www.cbc.ca/news/canada/newfoundland-labrador/story/2011/12/14/nl-uranium-ban-lifted-1214.html

Looks like we might not have to wait until the 19th...
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 14, 2011, 01:08:16 PM
Mr.B,

The Ontario Inc. Is run by Paul Van Eden's Cranberry capital....i will check on the $3m add...I would rather they did deals themselves...as well!

I will look at the large % increase in admin costs....I wonder whether it is effected by the partnership activity that has taken place as of late. As you know, they get reimbursed by their partners for work they complete.

Dazel.

Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 14, 2011, 01:34:38 PM
Mr.B,

The royalty income from voisey bay is lumpy....so he $4m number is an averaged out number over the year....

I will share some work we are doing on other royalty companies and what they trade for...if nothing else the exercise has helped us realize how "valuable" these royalties are especially in the low interest rate and high risk environment we are in. The fact that Royal gold gets a 50 pe on their royalties including their largest royalty "Voisey Bay" has intrigued us. Yield with the lowest risk will be king over the next number of years.

The royalties are a perfect income stream because they balance both inflation and deflation. The inflation hedge is obvious but the deflation hedge is missed. The costs associated with operations drop in a deflationary environment...so their is a balance in costs of production vs realized price....the royalty company does well in both...the opportunity that altius took advantage of in irc was that when deflation hit in 2009....voisey bay was on strike...so irc looked terrible in a terrible environment. Altius did well in selling irc to royal gold but in hind sight they should have kept the asset and bought more of it. They would be getting the multiple that royalties trade at instead of the 0 multiple they are getting from their share of the voisey bay and the fact they are a good investor.

They are losing on both fronts now as far as multiples on assets. We plan on being around when they get the proper multiple....but we really want the cash they have being used in purchasing these types of assets. We need an environment like this to get decent prices...cash is king now but it won't be for long as we
know. We expect management to be hunting hard to use this cash...we are hoping for the transition to a pure royalty company over the next 3 to 4 years to expand multiples by a factor of 20 to 50 and make us all rich!



Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: MrB on December 14, 2011, 01:40:57 PM
Thanks Dazel.
So just to confirm; Note 17 Royalty and investment income includes V Bay?
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 14, 2011, 01:59:48 PM


Mr.B,


Correct $723k is Voisey Bay royalty in note 17
It is also in the income statement under royalty income.
For the 6 months it is $1.812m and the quarter before that it was $1.1m...so about $3m over the last 3 quarters.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: MrB on December 14, 2011, 02:09:28 PM
Much obliged. I like the story, but as always I am looking for holes.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 14, 2011, 02:12:53 PM
Mr.B,

note 17
Royalty and investment and interest income combined $1.488m for the quarter and $3.605m for the 6 months.

As you can see if you take $150m of the cash and return 10% a year from a long term royalty stream on top of the future major long term royalty streams coming on...it would get very interesting.

We think that the other players and the investment community will take a run at altius before this happens but altius would be better off to not to take a buy out. As was the case with International Royalty Corp....we will see but we think that all stocks are going to see a lot buy out offers at these levels with the cost of debt so low to those that can access it and the fact hat corps like altius are getting zero yield on their access cash.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on December 15, 2011, 10:46:14 AM
http://www.miningweekly.com/article/paladin-gets-access-to-aurora-deposits-2011-12-15

Quote
JOHANNESBURG (miningweekly.com) - ASX- and TSX-listed uranium miner Paladin Energy on Thursday rejoiced at news that the Nunatsiavut government had decided to lift the three-year moratorium on uranium mining, development and production on Labrador Inuit Lands.

Paladin holds significant uranium assets through its wholly owned subsidiary Aurora Energy within the Central Mineral Belt of Labrador, in Eastern Canada, which includes a measured 15.1-million pound uranium oxide (U3O8) resource, 68.7-million pounds indicated resource, of U3O8, and a 53-million pounds inferred resource over six deposits.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 16, 2011, 07:02:30 AM
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTE4NzI5fENoaWxkSUQ9LTF8VHlwZT0z&t=1


Paladin energy acquired aurora at $1.90 a pound of uranium. This is exceptional for them but also for Altius because their cost to production becomes so low that the project becomes viable to Paladin immediately. It looks like they made an excellent purchase of these assets during the moratorium.

We also now expect altius to to be doing more work on the uranium front with this ban lift. The price of uranium to us is a spring that has been coiled down and is ready to pop. We are playing it through altius...but we are tempted to buy U on the toronto stock exchange.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: link01 on December 18, 2011, 08:05:37 AM
http://www.caseyresearch.com/nexTen.php?id=2


A good piece on Brian Dalton...for those who do not know Doug Casey there is a link below.

http://en.wikipedia.org/wiki/Doug_Casey

Dazel.

i've just gotten around to reading this thread. i've ignored it previously because, well, natural resource co's never really clicked for me or caught my fancy. but there's some good stuff here, thx especially to dazel.

just curious if any of the other '10 to watch' ceo's & their co's are on your watchlist. for instance, sandstorm metals & energy is trading at a very low multiple to book right now, even lower than altius. the one negative i see with them is financing & dilution risk. they are very agressive dealmakers & issuers of stock. by contrast, altius seems much more patient & discerning with their capital. or do you think the sandstorm team just has better deal sourcing capacity?
Title: Re: ALS.TO - Altius Minerals
Post by: link01 on December 18, 2011, 10:50:06 AM
the big debate: deflation vs inflation....

i'm in the camp that believes deflationary pressures will outweigh inflationary ones in the nearer term, but i'm mindful of the fact that this stance could turn out to be wrong sooner than i'm prepared to see or admit it. pippa malmgren has a few provacative insights:

"The US is Defaulting on its Debt As Well

I have argued for some time that the US would default through haircuts at the local level (municipal defaults) and through inflation at the national level. In addition, austerity is making its way into the US debt picture but through local, not national, initiatives...

The Federal Reserve remains on the increased inflation trajectory, in spite of their denials. ..And this is exactly why we see Chairman Bernanke making it crystal clear that the “Fed has latitude to set inflation goal”. You can be sure that the inflation goal will be higher than expected and that it will be raised over time.

The greatest policy mistake now building in the system is this: policymakers will confuse the temporary fall in commodity prices with a permanent reduction of inflation pressures: China, India, Australia come to mind. I think the opposite will turn out to be true. The recent crisis caused commodity prices to fall somewhat but the production constraints are now worse than ever due to lack of bank lending and working capital. So, commodity prices jump back up again very fast. This means central banks especially in emerging markets may start easing way too soon. I bet inflation pressures worldwide are barely beginning. "




Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on December 19, 2011, 09:28:14 AM
(http://i.imgur.com/dUc1K.png)

English and Chinese. guess it shows who they've been talking to lately!
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on December 30, 2011, 10:07:35 AM
http://www.vocm.com/newsarticle.asp?mn=2&id=19715&latest=1

Quote
One of the province's best known mining executives predicts more business deals with China in the coming years. Brian Dalton, President of Altius Minerals in St. John's, has spent four of the past fourteen months in China looking at opportunities for iron ore developments. Dalton says in China you would never know there are world economic problems as you don't see it or feel it when you are there. He believes China's and Newfoundland and Labrador's futures are intertwined and he sees numerous opportunities in the coming years. Dalton says the biggest growth of new mining companies in the world are from China and they are looking to invest internationally, especially in places like Newfoundland and Labrador, which has  an abundance of mineral wealth. Altius, and its joint venture partners, will be spending close to $40-million next year on exploration, almost double what they spent this year. Altius has $185-million in the bank for investment opportunities.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 30, 2011, 10:24:37 AM

Dalton has spent 4 months out of the last year in china. Their deal flow from this year has been significant despite the fact the market has ignored it. Their recent deal with century iron ore is an example of his work as they are backed by chinese interests...we would like to see more of the same for 2012.
Here is our wish list for 2012:

Alder on: we would like to see their stake sold to a chinese operator who is in a hurry to develop the property. We are not concerned about altius' selling price of their controlling position we see the future royalty as "huge" to the company. The developer and their time to production is key. This would move the stock significantly. We would rather see altius sell this stake and realize the future royalty than get taken out by someone wholly...we do not think that altius would get the premium they deserve.

Cash: we want to see this money put into a strategic investment similar to the irc deal....we what a significant return on this money...there is plenty of opportunity as the sector has been killed and there are great opportunities...we would like to see them partner in a large deal...they being the aggregator and investing along side someone like Fairfax or Leucadia or Sprott (Rick rule)...we would also accept some leverage for the deal.

Central mineral belt royalty: The market will realize that this future royalty is substantial....It would be interesting to see some discussion on what Paladin and Cameco might be doing in Labrador now that uranium moratorium has been lifted...the Hathor take over fight has made many take a look at where the uranium price is going....in 2007 when altius sold Aurora...it was $170 pound...$52 a pound now...no tsunami's!

Cliffs: we would like to see more upside on the nickel and alloy side as far as exploration

Century partnership: develop as planned and gain be interest of other major players...

NLRC: while we do not expect anything here...we would like to see them find a resolution with SNC Lavalin that might create am opportunity down the road....the other refinery in Newfoundland is owned and run by Korean state interests that bought Harvest energy in 2009...it's a long shot but deal for something would be great!

While the share price had a tough year like all commodity companies (even gold)...altius had a significant year of future development into a significant royalty company.

Disclosure: we continue to buy...including today!

Good luck in the new year!

Dazel




Title: Re: ALS.TO - Altius Minerals
Post by: link01 on December 30, 2011, 11:45:04 AM

NLRC: while we do not expect anything here...we would like to see them find a resolution with SNC Lavalin that might create am opportunity down the road....the other refinery in Newfoundland is owned and run by Korean state interests that bought Harvest energy in 2009...it's a long shot but deal for something would be great!


what happened there with NLRC? i'm still not sure i understand after reading thru some of the relevant links & documents via the ALS website. yea, NLRC was hit by the runaway freight train that was the 2008-2009 economic tsunami, but where was the supervisional influence & financial oversight by ALS considering their substantial interest? It seems NLRC basically spent & spent & spent them selves into a deep dark hole, completely oblivious to the imploding credit markets on which they were totally reliant for continued funding, & the brass at ALS were snoozing all the while this was unfolding as well.

i didnt get the sense that mngt at ALS addressed that very openly at all. which is surprising considering that some analysts at the time thought that more than 50% of ALS's value resided in their NLRC interests at the time.

and if ALS lacks the staff or financial acumen to guide or influence such major investees then it become even more incumbent on them to look to sell their stakes while retaining their royalty rights, doesnt it?
Title: Re: ALS.TO - Altius Minerals
Post by: shalab on December 31, 2011, 12:02:19 AM
With China slow-down or outright recession, not sure if ALS is doing the right thing.

I don't feel comfortable with Dalton's observation from the ground about China economy. If you are in Washington D.C or NY City, there is no recession.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 31, 2011, 06:04:39 AM
Shaleb,

China slow down...yes they have tried to slow down...why? Bubble if you read our financial times...but there is more to an economy than the stock market...
China has a shortage of power everywhere....they have to regularly shut down the grid because they do not have the resources to full-fill their power needs...read Mark mobius and his take on china...he is on the ground there while chanos et all have never been there.

Uranium-look at cameco's ceo's latest comments on china's nuclear plant plans...he says Japan was a not even a hiccup.

Our news...is crash, depression, bubble, etc...that is because north America and Europe are old and are not Building ing anything...we are stuck in finical trickery to make money where as the developing world is building infrastructure for the future...

China had record use of oil in November!!!! Do you wonder why oil is at $100? It is not us....
I have not seen that headline anywhere...only that they are "crashing".

Alder on has a plan at $118 per ton of iron ore....$139 is just fine for their project.


Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 31, 2011, 06:11:21 AM

Shaleb,

On the other hand...for our business...which is financial..if altius were to go to auction tomorrow and sell off the company piece by piece we would double our money. So I can see how some investors would Want to see this rather than see how much china slows down. Fair enough.

Maybe That is what they will do...or be forced to do...if that were to happen...I think you would see a splitting of the company...projects sold...royalties kept as the new altius.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 31, 2011, 06:39:50 AM


Link01,


You are correct...their plan has always been to sell their stakes and keep the royalties...we see NLRC as a major mistake for Altius. We think  they got in over their head with Harry Dobson et all and thought they were bullet proof....their lack of clarity about the mistake is likely due to the SNC Lavalin litigation which effectively killed the project in its form of that time. The other suppliers agree to a standstill where SNC Lavalin took them to court.

I have not seen or heard anything with regards to the Oct 2011 deadline for their settlement with SNC....hopefully they are negotiating something that benefits both parties. SNC Lavalin is an obvious partner as they have global scale.....a side note...the refinery would have been up and running in 2011! And we would never have invested in Altius because their share price would be too high!

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: shalab on December 31, 2011, 07:51:51 AM
Dazel, hope you are right. A friend of mine who happens to be in China has mentioned that housing market is cooling in China and businesses are seeing a slowdown. Whether it lasts or not is a different question - hopefully not. If you look at this article, it seems China wants cheaper supplies of iron which they likely will get from ALS.

http://www.theaustralian.com.au/business/mining-energy/china-seeks-cheaper-iron-ore-supplies/story-e6frg9df-1226128456943


On the other hand, developing world is more than China. So, there should be demand from rest of Asia/Africa which has all the issues you mentioned - chronic power shortage etc. However, China has building infrastructure since the 1980s, tearing up and rebuilding the same infrastructure.


Title: Re: ALS.TO - Altius Minerals
Post by: shalab on December 31, 2011, 08:15:27 AM
According to wikipedia - China/Japan and Korea followed by U.S and Europe are the biggest consumers of iron ore. China is also the largest producer.

Iron ore can go below $100 ( pre 2009 levels ) fairly easily if China slows down. China has become the manufacturer for the world but this could shift. It is not an impossible situation as more manufacturing is moving out of China because of cost - some is even coming back to the U.S or moving to other Asian countries already. It just doesnt have to be housing which has already slowed down.


http://en.wikipedia.org/wiki/Iron_ore

For ALS in particular, I am not looking for one year double or two year double. If played carefully, this could be a multi bagger. Obviously, a lot depends on management to have the patience and to make it happen.
Title: Re: ALS.TO - Altius Minerals
Post by: rmitz on December 31, 2011, 09:47:18 AM
Dazel, hope you are right. A friend of mine who happens to be in China has mentioned that housing market is cooling in China and businesses are seeing a slowdown. Whether it lasts or not is a different question - hopefully not. If you look at this article, it seems China wants cheaper supplies of iron which they likely will get from ALS.

http://www.theaustralian.com.au/business/mining-energy/china-seeks-cheaper-iron-ore-supplies/story-e6frg9df-1226128456943


On the other hand, developing world is more than China. So, there should be demand from rest of Asia/Africa which has all the issues you mentioned - chronic power shortage etc. However, China has building infrastructure since the 1980s, tearing up and rebuilding the same infrastructure.

I found this article particularly instructive on the possible China downturn, hopefully it hasn't been posted already:

http://www.foreignaffairs.com/articles/136963/patrick-chovanec/chinas-real-estate-bubble-may-have-just-popped?cid=nlc-this_week_on_foreignaffairs_co-122211-chinas_real_estate_bubble_may_2-122211

Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on December 31, 2011, 12:17:48 PM
What makes me comfortable with ALS is that even if commodities prices go down a lot, they'll be able to take advantage of it because of their huge cash pile and proven capital allocation skills. They don't have debt so even commodity Armageddon wouldn't be an existential risk (unless it lasts for decades). The worse that could happen would be for Alderon to unravel, Voise Bay to pay a lot less, and Paladin to stop developing. That would be really bad, but the cash on their balance sheet would still be worth par putting a floor on the share price (along with buybacks, most likely), and it would allow them to buy royalties and securities at very attractive prices, setting them up for the next up cycle.

That's why I'm not too worried for the long-term. But short-term, who knows?
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on January 01, 2012, 10:26:34 AM
What I'm really wondering is what would Alderon do if China had  a slowdown right now.

Would it really make them consider delaying or giving up on Kami, or would they think "well, by the time we ship in 2015, chances are they'll be out of the hole and iron ore prices will have recovered".

Because it's doubtful that a Chinese slowdown of infrastructure buildup would last for years and years, IMO. The stock market could crash, but I doubt they'll stop building stuff that easily.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 01, 2012, 01:57:51 PM
The Chinese stock market has already "crashed" in our terms...down 12% and 22% in the last 2 years...all being discussed is not new news.
The big difference is that china is government run and they have the pocket book unlike the u.s and Europe to stimulate....they have to keep it going they cannot have social unrest in china...and their populace is getting used to the new way...
Jeremy grantham has done a lot of work on commodities and feels as many that we are in a global shortage of everything...they peg the chance reversal of the trend in iron ore as the lowest probability of all commodities...can't remember the number but I believe it is 1000000 to 1. I hope he is right as well....we are only looking at keeping these levels not the $191 a ton we hit last february....the average price was $167 a ton last year and $144 for 2010.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: shalab on January 01, 2012, 04:55:35 PM
It is true that the Chinese government has very deep pockets and can control  the market to a great extent - I look them to stimulate again or increase imports or do both to placate all.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 02, 2012, 04:55:16 AM
http://www.bloomberg.com/news/2012-01-02/manufacturing-grows-in-india-china-as-most-of-europe-struggles-economy.html


They may not need any stimulus as they continue to bump along....this all we need at altius....
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 02, 2012, 05:16:16 AM
http://Uraniuminvestingnews.com/9989/cgnpc-extract-husab-uranium-namibia-ext-kah.html

China is showing it's appetite for uranium quietly as well...altius is positioned to benefit here as well with the lift of the ban on uranium mining in the central belt. We think that this forgotten asset at altius will pay big dividends in the not too distant future. Actually if you look at it from the view of the Chinese...altius is a perfect play to get control of large resources in Newfoundland and Labrador...with the political backing that comes with altius..they have a friendly environment...as we are seeing they are having to bid against Rio Tinto et all. All over the world...Paladin paid .91 cents a pound for aurora..Rio Tinto paid $10 a pound for Hathor and the above bids show the  Chinese are quite high as well...altius already partners with Rio Tinto in Newfoundland in iron ore

projects...http://altiusminerals.com/files/PR1111-RT.pdf

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 02, 2012, 06:08:28 AM
http://canadianinsider.com/node/7?ticker=ALS


Altius continues to shrink the float...daily.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on January 02, 2012, 08:30:32 AM
http://canadianinsider.com/node/7?ticker=ALS


Altius continues to shrink the float...daily.

By my count they've bought back about 200k shares in the past 6 month. (I could be wrong about that, though, as it was just quick back of the enveloppe math)
Title: Re: ALS.TO - Altius Minerals
Post by: shalab on January 02, 2012, 08:35:10 AM
It is a good thing.

Apparently manufacturing in China didnt contract further but India is expanding. Indian economy is about a third of China's in real terms and has the same characteristics of the U.S economy where the consumer drives demand.

http://bit.ly/tIWeWz

Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 05, 2012, 08:24:49 AM
http://finance.yahoo.com/news/Alderon-Appoints-Danny-iw-3281774668.html?x=0

http://en.wikipedia.org/wiki/Danny_Williams_(politician)

This is very good news! Maybe the best news that we have had in the development of Kami!

Most people on the board do not know who Danny Willlims is...google him.. He is extremely tough and gets things done. He is the most connected man in Eastern Canada.


Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on January 05, 2012, 08:42:46 AM
It sure can't hurt to have these kind of political connections!

Meanwhile, ADV is back above $3.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 05, 2012, 11:12:01 AM



Danny Williams is a very successful lawyer and businessman as well. Smart guy. His nickname become "Danny Millions" befoe he took office.


Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: SouthernYankee on January 05, 2012, 02:03:40 PM
On that Wikipedia page, it mentions the ABC campaign, which seemed to be a rift between the Newfie conservatives and the Stephen Harper-led national conservatives. Is it good to be hiring one of the persons who led that ABC effort?
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on January 05, 2012, 03:28:12 PM
On that Wikipedia page, it mentions the ABC campaign, which seemed to be a rift between the Newfie conservatives and the Stephen Harper-led national conservatives. Is it good to be hiring one of the persons who led that ABC effort?

I might be missing something (does the federal government need to give approvals for ADV to get access to the railroad and to power?), but from what I know, it seems to me like the government that they need most on their side is the local NF/L government, not the Federal government in Ottawa, so I think that should be fine.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 05, 2012, 07:52:16 PM
http://www.theaurora.ca/News/2010-02-08/article-1563806/Brian-Tobin-weighs-in-as-Bloom-Lake-gets-ready-for-production/1


Looks a lot like what Thompson Consildated did with Brian Tobin former premier of Newfoundland...let's hope we get the same outcome!

http://www.theaurora.ca/News/2011-01-25/article-2169503/Consolidated-Thompson-takeover-a-good-sign-for-Labrador-West/1
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 10, 2012, 07:17:45 AM
http://www.bloomberg.com/news/2012-01-10/copper-climbs-most-in-a-week-on-record-high-shipments-of-metal-into-china.html


Now are we still worried about a china crash?

We want altius to be taking advantage of the non sense that is in the market place....they may hit on all cylinders this year when the "china crash worry" subsides and commodities stabilize...especially if they have loaded up with some or all of the $300m in cash equivalents (including Alderon)...quiet is good for now.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: shalab on January 10, 2012, 07:33:10 AM
Not sure about China (they have enough resources to keep going for the longest time - much longer than the U.S or Europe) but the Indian government came out and said they will reduce interest rates to increase growth. They are saying they are confident of 8-9% growth for the next ten years. You know my take on these forecasts but generally speaking India is coming off a very low base, much lower than China.

I still believe China resource consumption is not sustainable if they stop to be the factory for the world or if bunch of jobs come back to the U.S

Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 10, 2012, 07:51:13 AM
http://www.reuters.com/article/2012/01/03/india-ironore-idUSL3E8C34V920120103

This along with talk of a tax in australia will bring more attention to Labrador, Alderon and  Altius. The world will look for different alternatives...Labrador is proven and has a freindly investment climate.

Dazel.


Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on January 10, 2012, 08:15:30 AM
http://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aADV-1917096&symbol=ADV&region=C

Quote
Alderon Iron Ore Corp. has commenced the 2012 winter drilling program at its 100-per-cent-owned Kamistiatusset (Kami) iron ore project in western Labrador. The four month drill program will be focused predominately on North Rose and will include up to 18,000 metres of drilling with six drills. The program will concentrate on infill drilling with the goal of upgrading the current mineral resource into the measured and indicated categories in preparation for the Feasibility Study expected in Q3 2012.

"We are excited to get our 2012 program underway and be back drilling on North Rose," says Tayfun Eldem, President and CEO of Alderon. "Our 2011 program was extremely successful and we are looking forward to building on that success as we work to upgrade our resource in advance of completing the Feasibility Study in Q3. The final phase of drilling represents another major milestone in driving Kami through the development stage into production."

North Rose, together with Rose Central and Mills Lake, have a currently defined NI 43-101 indicated resource of 490 million tonnes at 30.0% iron and an additional inferred resource of 598 million tonnes at 30.3% iron.

The proposed drill hole location map is posted on the Alderon website at: http://www.alderonmining.com/projects/kami/

Alderon's exploration work on the Kami Property is supervised by Edward Lyons, P.Geo., the Chief Geologist for Alderon and a Qualified Person as defined by NI 43-101. Mr. Lyons has reviewed and approved the technical information contained in this news release.
Title: Re: ALS.TO - Altius Minerals
Post by: shalab on January 10, 2012, 08:17:46 AM
This along with talk of a tax in australia will bring more attention to Labrador ...

Fair enough
Title: Re: ALS.TO - Altius Minerals
Post by: finetrader on January 10, 2012, 08:18:00 AM
Le Plan Nord in Quebec should be good for Labrador as well as they are going to develop transportation and telecommunication infrastructures in that area.

http://www.plannord.gouv.qc.ca/english/potentiel/mineral.asp
Title: Re: ALS.TO - Altius Minerals
Post by: Pick52 on January 11, 2012, 07:40:39 AM
TD has initiated coverage on Alderon with a speculative buy rating and a target price of $5.00.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on January 11, 2012, 08:04:48 AM
TD has initiated coverage on Alderon with a speculative buy rating and a target price of $5.00.

$5? Isn't that less than the cash?  :o
Title: Re: ALS.TO - Altius Minerals
Post by: value-is-what-you-get on January 11, 2012, 09:01:06 AM
TD has initiated coverage on Alderon with a speculative buy rating and a target price of $5.00.

$5? Isn't that less than the cash?  :o

Yes - Altius cash but the price target is on Alderon!   ::)

Every dollar in share price for Alderon is approx. $1.12 value to an Altius share (buybacks notwithstanding)
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on January 11, 2012, 09:24:40 AM
Yes - Altius cash but the price target is on Alderon!   ::)

Every dollar in share price for Alderon is approx. $1.12 value to an Altius share (buybacks notwithstanding)

My bad, I misread. This is an Altius thread so my brain was expecting this to be about Altius. Sorry about that  :-X
Title: Re: ALS.TO - Altius Minerals
Post by: Eric50 on January 11, 2012, 09:55:42 AM
Quick summary below (in $m). It's incredibly cheap....

Cash and marketable securities              175.3    As of Oct 31, 2011
Royal Gold                                                36.5    529k @ $69. Nasdaq listed (RGLD), precious metal mines
Alderon Resource                                      108.6    32,285k @ $3.3, iron-ore jr, venture listed (ADV.V)
Millrock Resources                                           2.9    7,932k @ $0.47, venture listed exploration specialists in Alaska (MRO.V)
JV w/ Cranberry Capital                                       Early stage mineral exploration, book value $25m
Voisey Bay                                                      Royalty generating $4m+ a year, $10m in the books
NLRC                                                              Fully w/o, only refinery project in NA approved in years
Collection of Royalties                                      free call option
17 exploration projects (12 JV)                       free call option
Worst case scenario valuation                       323.3    
      
# of shares                                                 28.9    
Current Price                                                 11.2    
Current Market Cap                                       323.6    

Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on January 12, 2012, 08:35:08 AM
http://www.digitaljournal.com/pr/547026

Quote
Alderon Iron Ore Corp. (TSX:ADV)(OTCQX:ALDFF) ("Alderon") is pleased to announce that it has entered into a subscription agreement with Liberty Metals & Mining Holdings, LLC ("LMM"), a subsidiary of Liberty Mutual Group. Pursuant to the subscription agreement, LMM will purchase 14,981,273 common shares (the "Purchased Shares") of Alderon on a private placement basis for an aggregate purchase price of approximately C$40 million at a price per Purchased Share of C$2.67 (the "Placement"). The purchase price was based on the volume weighted average price of Alderon's common shares on the Toronto Stock Exchange for the twenty trading days ended January 11, 2012.
Title: Re: ALS.TO - Altius Minerals
Post by: value-is-what-you-get on January 12, 2012, 09:57:36 AM
Quick summary below (in $m). It's incredibly cheap....

Cash and marketable securities              175.3    As of Oct 31, 2011
Royal Gold                                                36.5    529k @ $69. Nasdaq listed (RGLD), precious metal mines
Alderon Resource                                      108.6    32,285k @ $3.3, iron-ore jr, venture listed (ADV.V)
Millrock Resources                                           2.9    7,932k @ $0.47, venture listed exploration specialists in Alaska (MRO.V)
JV w/ Cranberry Capital                                       Early stage mineral exploration, book value $25m
Voisey Bay                                                      Royalty generating $4m+ a year, $10m in the books
NLRC                                                              Fully w/o, only refinery project in NA approved in years
Collection of Royalties                                      free call option
17 exploration projects (12 JV)                       free call option
Worst case scenario valuation                       323.3    
      
# of shares                                                 28.9    
Current Price                                                 11.2    
Current Market Cap                                       323.6

I did a DCF calculation on the 3% gross sales royalty on Alderon's Kami project to see what it is actually worth to Altius.  Once again, it appears that there is huge value here, and it's not a lot of "what if" value dependent on financing, infrastructure costs, concentrator build out cost increases etc.  It's just a straight commission on whatever eventually gets shipped out of there by whatever corporate entity sells it.  We're 3 years away from production so you know there could be JV deals with China, share dilution at Alderon (as per todays release) etc and none of it matters - just a net cheque for the selling price per ton x 3% payable to Altius once everything is up and running by whoever gets it up and running.  My point is it's calculable future cash flow with a high degree of confidence.

Using the assumptions of:  3% royalty on an Annual production of 8 million tons, mine life of 15 years, cash flows not to begin until 2015 and a discount rate of 5% (let me know if I'm out to lunch on that one please!) and a selling price of $100 per ton (for margin of safety) I get a Net Present Value of this one royalty stream to Altius of $215.17 million.  If the iron ore price averages $150 it's 1.5 times that amount or $322.8 million (which is approximate current market cap so of course everything else is free at that iron ore price!)  If the iron ore price averages $50 it's still worth $107.5 million or approximately the same amount as their shares in Alderon are worth.

So the value is there.  I would say that at current pricing and even a 5 year horizon there is significant margin of safety in Altius.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 12, 2012, 11:04:28 AM

Value is what yo get,


Your numbers are half right....double them. The PEA report is on half of the resource as the 500m+ ton  upgrade was after the report was done...these numbers will show up in the feasibility study which should be excellent...that would bring the npv of alder on to over $6b...obviously compensating the billion it will take to build it.
So it is now 16m tons a year production.....that is what they applied for from the government...so it everything x2.
$430m and $645m.....how is your margin of safety now? As we have said the royalty is worth more than Altius trades for....as Shaleb said a multi bagger .....






Do you see why we are screaming....we are going to get rich here.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 12, 2012, 11:11:13 AM


The alder on capital seems expensive....but it is the most important capital they will raise....it will take them through to the bankable feasibility study....where they will make deals for production etc...that will finance the production build out. They are on their way.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: HJ on January 12, 2012, 11:17:40 AM
http://www.indexmundi.com/commodities/?commodity=iron-ore&months=240

Question:  If iron ore prices collapses from here, how should one think about where the downside is?
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 12, 2012, 11:44:30 AM


Hj,

http://thinkprogress.org/romm/2011/05/02/207994/grantham-must-read-time-to-wake-up-days-of-abundant-resources-and-falling-prices-are-over-forever/


Grantham comes up with a 1 in 2.2 million chance that iron ore will reverse it's trend. I like those odds..
Besides you ask what is the down side sarcastically....not much considering none of what has been discussed is in the stock price. If we were at $25 where we should be I would be worried about
 downside risks to the 1 in 2.2 millin chance we reverse course.

So actually if we crash as you say...our downside is we pick up everything for 10 cents on the dollar with our quarter of a billion in cash.

Dazel


Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 12, 2012, 11:54:56 AM


Anyone who does not want to read the Grantham piece....the 1 in 2.2 million chance in iron ore reversing it's current trend of pricing in in "exhibit 4" from the post above.

Here is where we are today
http://www.mbironoreindex.com/

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 12, 2012, 12:21:40 PM
http://www.alderonironore.com/_resources/news/2012-01-12-NewsRelease.pdf

Liberty,

If you read more into it...alder on has brought on a specific shareholder with deep pockets....likely with an eye for The future. With in the agreement Liberty llc (is this your hold co.!)...has first option on any other financing and alder on has the right to purchase or to  find a purchaser of  any shares Liberty wants to sell. They have secured a Long term partner....not speculators. I agree $2.67 is low but it looks like the right color of money.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: value-is-what-you-get on January 12, 2012, 12:33:54 PM
http://www.indexmundi.com/commodities/?commodity=iron-ore&months=240

Question:  If iron ore prices collapses from here, how should one think about where the downside is?

from the Alderon site:

•Total operating cost (excluding royalties) of US$44.87/tonne concentrate (averaged over the life of mine)

Now this doesn't include amortizing about $67 million a year for the initial Capital expense of the concentrator etc which adds about $8.38/tonne so that brings it up to $53.25/tonne - call it $60 / tonne to justify operating for Alderon.  This is all based on stated run rate of 8 million tonnes a year for 15 years.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on January 12, 2012, 12:45:04 PM
http://www.alderonironore.com/_resources/news/2012-01-12-NewsRelease.pdf

Liberty,

If you read more into it...alder on has brought on a specific shareholder with deep pockets....likely with an eye for The future. With in the agreement Liberty llc (is this your hold co.!)...has first option on any other financing and alder on has the right to purchase or to  find a purchaser of  any shares Liberty wants to sell. They have secured a Long term partner....not speculators. I agree $2.67 is low but it looks like the right color of money.

Dazel.

Ha! I wish I knew more about Liberty llc, actually. But if they are a quality partner with deep pockets (and I'm sure Alderon-Altius management would settle for nothing less), then I'm happy about it. The more people have a stake in getting Kami to production, the better.

Price is based on the average over a period of time, and it could have turned out much worse if ADV hadn't climbed back up.

Right now I'm more concerned about them maximizing the probability of getting Kami to commercial production than anything else. It would suck if they focused on minimizing dilution and missed a chance of going for production; winning a battle that costs you the war..
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on January 12, 2012, 01:13:40 PM
Some commentary about the recent developments at ADV:

http://www.grandich.com/2012/01/grandich-client-alderon-iron-ore/
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 12, 2012, 01:28:06 PM


Liberty LLC.....has a giant parent...I would say that financing looks good..off to the races...I was thinking Leucadia or Fairfax might be interesting partners to bring in bigger partners... not a fortune 100 company from the start. Daddy is number 82 on the list just ahead of DuPont....low interest rates are going to help a lot of different industries as insurance and mutual funds look for returns...I hope that Alderon becomes a nice bond like investment for them. It appears that Alderon is higher profile than I thought. That will give them greater bargaining power when they are Doing contracts etc...these guys are good.

http://money.cnn.com/magazines/fortune/fortune500/2011/full_list/

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: HJ on January 13, 2012, 07:58:13 AM


Hj,

http://thinkprogress.org/romm/2011/05/02/207994/grantham-must-read-time-to-wake-up-days-of-abundant-resources-and-falling-prices-are-over-forever/


Grantham comes up with a 1 in 2.2 million chance that iron ore will reverse it's trend. I like those odds..
Besides you ask what is the down side sarcastically....not much considering none of what has been discussed is in the stock price. If we were at $25 where we should be I would be worried about
 downside risks to the 1 in 2.2 millin chance we reverse course.

So actually if we crash as you say...our downside is we pick up everything for 10 cents on the dollar with our quarter of a billion in cash.

Dazel

Wasn't being sarcastic at all, and wasn't saying that it necessarily will crash either.  Just want to understand the circumstance under which prices would get below their production cost, since it was there not that long ago.  Wondering if there's a way to see where they are on the global production cost curve vs. demand.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 13, 2012, 01:20:22 PM


Hj,


Fair enough....there is a reason why the price is so high...unlike copper and oil....the market is not made up of speculators...the prices I quote are negotiated and they fluctuate on buying and supply. India has put an export tariff on for a reason...the need the steel at home. China and India are the steel story it is as simple as that. If the rest of the world builds (keystone pipeline etc) than there will be less supply....if read the Grantham report...china is almost 50%. Those are not houses...they are  nuclear plants, high speed rail, coal plants etc....housing uses copper not steel.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 16, 2012, 07:09:57 PM
http://finance.yahoo.com/q?s=Pdn.to&ql=1

We had considered approaching Altius managment about taking a significant stake in Paladin Energy. We thought as we expressed here that uranium stocks were very very cheap. It would not have been that expensive to take a big enough position to have some influence on the Michelin project. They have convertibles  due in 2013 and2014... So we did not pursue it...as it turns out in the short term it would have been a great investment. Uranium stocks have rebounded sharply from a terrible 2011.

Altius has been associated closely with uranium because of its incredible success at Aurora. Altius' stock was hit very hard after the tsunami last year...With moratorium lifted and uranium stocks gaining favor again it is reasonable to believe they will join in this rally as they were treated like the other uranium stocks last spring. Their uranium holdings and royalty at the Michelin plant are
substantial.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 17, 2012, 01:49:19 PM
http://finance.yahoo.com/news/Paladin-Energy-Ltd-Quarterly-ccn-3173198448.html?x=0


Paladin highlights the moratorium lifted in Labrador and calls  the michelin project  "world class"...the volume in their shares was 10 times normal today on their other production success.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 18, 2012, 04:55:02 AM
http://uk.reuters.com/article/2012/01/18/uk-bhp-idUKTRE80H06M20120118

BHP does not see China slowing down...they are predicting record production this year.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on January 20, 2012, 08:56:40 PM
http://webcasts.welcome2theshow.com/whistler2012

Audio recording of a panel with CEO of Alderon.

(I haven't listened to it yet, but it should be interesting)

Free reg. required.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on January 27, 2012, 07:11:45 AM
Plans for expansion of the Sept Iles port, mentions Alderon among others:

http://www.cyberpresse.ca/le-soleil/affaires/les-regions/201201/18/01-4487192-le-port-de-sept-iles-se-nourrit-de-fer.php

Looks like they want a new terminal done around 2014, which would be great timing for Alderon.
Title: Re: ALS.TO - Altius Minerals
Post by: naboo on January 27, 2012, 07:45:24 AM
Any news from NLRC?
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on January 27, 2012, 07:58:30 AM
Any news from NLRC?

I haven't seen anything. It's probably material enough that if anything was announced ALS would do a press release.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on January 27, 2012, 11:11:01 AM
Audio recording of an interview with the Chairman of Alderon from last November (I don't think it was posted here yet):

http://www.mining.com/2011/11/01/mining-com-podcast-canadian-iron-ore-project-advancing/
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 29, 2012, 07:43:02 PM
http://resourceclips.com/2011/09/28/the-iron-hub/

Not sure if this was posted...it is from late september.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 06, 2012, 07:24:59 AM
Iron ore prices at are at a 2 month high in china.

Things should get very interesting for Altius.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Zorrofan on February 06, 2012, 01:42:48 PM
Iron ore prices at are at a 2 month high in china.

Things should get very interesting for Altius.

Dazel


Dazel,

Any idea on global stockpile levels for Iron Ore?

thanks
Zorro
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 06, 2012, 02:37:09 PM
http://www.reuters.com/article/2012/02/06/markets-ironore-idUSL4E8D600K20120206


Like with everyone else...they are waiting to see what china does...winter and Chinese new year are a large reason for the 100m tons stockpiled at their ports...but this is in the price...from what I understand.
Here is what Goldman has to say.

http://www.northernironcorp.com/industry_news/goldman-raise-iron-ore-price-forecasts-2012

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Zorrofan on February 07, 2012, 05:13:47 AM
Thanks!  And thanks for all your hard work on this company.

cheers
Zorro
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on February 07, 2012, 10:10:37 AM
http://www.newswire.ca/en/story/916767/kami-iron-ore-project-public-comments-invited-and-federal-funding-available
Title: Re: ALS.TO - Altius Minerals
Post by: abyli on February 09, 2012, 08:34:50 PM
Brian Dalton - Entrepreneur of the Year 2011 - Progress Magazine

http://www.altiusminerals.com/files/2011-EY-BFD-progress.pdf
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on February 09, 2012, 08:54:13 PM
Brian Dalton - Entrepreneur of the Year 2011 - Progress Magazine

http://www.altiusminerals.com/files/2011-EY-BFD-progress.pdf

Nice to see him all dressed up :) thanks for posting.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on February 10, 2012, 08:49:45 AM
(http://i.imgur.com/Tx8iF.png)

Are they referring to the NLRC refinery here? Seems like it, but if anyone can provide more context, I'd appreciate it.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 11, 2012, 01:15:03 AM
Altius was worth a billion dollars at the time...they were likely doing listing requirements for the U.S exchange....

If they had done it... None of us value investors would ever have had a shot at buying them...we will be there for it this time after Alderon gains the attention of U.S based investors. In the article it refers to Voisey Bay....interestingly enough Robert Freidland made his fortune there...funny Steve Jobs Mentor made his billions in Newfoundland!
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 11, 2012, 05:46:04 AM
http://www.thebusinesspost.ca/usr/main/docs/22/Vol7issue1.pdf


This would be a pleasant surprise!

Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on February 11, 2012, 10:23:47 AM
http://www.thebusinesspost.ca/usr/main/docs/22/Vol7issue1.pdf


This would be a pleasant surprise!

It definitely would! Nice to see them be at the cutting edge and looking for things that almost no one else is looking for. Low-risk thanks to the partnership with Cliffs, but potentially high-reward. Just how I like it.

Thanks for posting!
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on February 11, 2012, 10:34:26 PM
http://www.theaureport.com/pub/na/12525

Quote
TGR: What are some Chinese investment themes that perhaps investors can piggyback on?

PG: China has a tremendous need for resources. That appetite is not going to disappear anytime soon. It's underpinning the commodities bull market, in particular steel and iron ore.

TGR: I read a report recently that said China was seeking alternative sources of iron ore for its smelters as part of an effort to limit its reliance on iron ore from Australia and Brazil. China's looking to northeastern Canada in the Labrador Trough. Do you know anything about that?

PG: A couple of my clients are there and some of my largest personal holdings are there. The Labrador Trough is probably the most interesting play in the world right now. A Chinese company recently did a big deal with Adriana Resources Inc. (ADI:TSX.V; ANARF:OTCBB; A7R:FSE) up there.

I'm very bullish on Alderon Iron Ore Corp. (ADV:TSX; ALDFF:OTCQX). I call it the son of Consolidated Thompson because it has many of the people who were successful at Consolidated Thompson and is following Consolidated's path, but in a more expedited way. I believe it's going to go the same way and be taken over within 12 months.

TGR: Alderon has the Kami iron ore project near to Consolidated Thompson's Bloom Lake deposit in the Labrador Trough. A recent preliminary economic assessment (PEA) on the project reported a pre-tax net present value (NPV) of just above $3 billion (B). How does the Kami deposit compare with its peers?

PG: Alderon should be able to develop Kami at a lower cost, which is key in that area. There's no question that there's a lot of iron ore up there, but success is a question of cost, efficiency and effectiveness. The expectation is that it will get port access in a relatively short period. The last missing ingredient will be an offtake agreement with a Chinese company, and the company seems to be suggesting that it's in advanced talks. All in all, the next big deal in that area appears to be Alderon.

A year from now, Alderon could be worth $10–12/share based on what Consolidated Thompson was worth. It's a legitimate target to have in the back of our minds.

Though the conflict of interest should be noted: http://www.grandich.com/comp/
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 13, 2012, 03:54:15 AM
http://www.reuters.com/article/2012/02/13/fortescue-teck-idUSL4E8DD0TG20120213?feedType=RSS&feedName=rbssEnergyNews&rpc=43


Finally looks like the timing is right for Altius' heavy push into iro ore....let's hope the take over activity picks up...as well as the financing.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 13, 2012, 04:04:43 AM


Liberty,


I think we will start calling Alderon

"TC2" Thompson Consolidated 2...


Not to be mistaken with T2 which grossed only $500m. TC2 will make a lot more!

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: naboo on February 13, 2012, 07:17:19 AM
Stephen Harper was in China last week. It looked like a very successful trip, signed 20+ agreements.  Could ALS/ADV get anything?


Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on February 13, 2012, 08:52:25 AM


Liberty,


I think we will start calling Alderon

"TC2" Thompson Consolidated 2...


Not to be mistaken with T2 which grossed only $500m. TC2 will make a lot more!

Dazel

Ha! It certainly takes a lot of steel to make killer robots...  ;D
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 13, 2012, 01:37:00 PM

Naboo,

We know one thing for sure the sharks are in the water!

http://www.proactiveinvestors.com/companies/news/24894/century-iron-sees-huge-taconite-potential-for-sunny-lake-prospect-pea-ahead-24894.html

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 13, 2012, 01:57:08 PM

Remember that Altius could own a real nice chunk of century iron ore!

http://altiusminerals.com/labrador_trough_iron_ore.php

Disclosure: we own Altius minerals and Alderon shares....we do not own Centruy iron ore

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on February 13, 2012, 07:14:27 PM
http://www.newswire.ca/en/story/920521/harper-government-announces-job-creating-investments-in-the-port-of-sept-iles#.TzlmZ3JIJKU.email

Sept-Iles is the port that Alderon will have to use.


Quote
The ministers announced today that the Government of Canada will invest up to $55 million and will contribute to the construction of a new multi-user deep water dock at the Port of Sept-Îles equipped with two ship loaders, as well as two conveyor lines. This investment will help the port meet global shipping standards for the iron ore industry, which is the largest commodity shipped through the port to overseas markets. It will also boost the effectiveness and capacity of port operations. The Port of Sept-Îles is an important part of Canada's Continental Gateway system.

For those who can read French (or use google translate):

http://www.radio-canada.ca/regions/est-quebec/2012/02/13/003-investissement-port-sept-iles-quai-eau-profonde.shtml

It says the expansion should be done for March 31, 2014. In time for Kami to use.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on February 13, 2012, 07:20:01 PM

Remember that Altius could own a real nice chunk of century iron ore!

http://altiusminerals.com/labrador_trough_iron_ore.php

Disclosure: we own Altius minerals and Alderon shares....we do not own Centruy iron ore

Dazel

I can't quite remember where I saw that, but the "bonus shares" that they mention altius getting if certain targets are met or exceeded, if I remember correctly thats quite a lot of shares (if anyone remember where that info was published, I'd appreciate the pointer). This could be a nice double whammy if Century hits jackpot, because Altius has a sliding royalty of 1-4%, and on top of that they could be getting more than the base 5 million shares of Century.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 14, 2012, 04:05:32 AM


Liberty,

It is on this thread...forgive me for not finding it...time better spent on the beach..I am in Aruba!

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on February 14, 2012, 05:35:22 AM
thanks for the update fellas
Title: Re: ALS.TO - Altius Minerals
Post by: abyli on February 14, 2012, 06:02:07 AM
Quote
I can't quite remember where I saw that, but the "bonus shares" that they mention altius getting if certain targets are met or exceeded, if I remember correctly thats quite a lot of shares (if anyone remember where that info was published, I'd appreciate the pointer). This could be a nice double whammy if Century hits jackpot, because Altius has a sliding royalty of 1-4%, and on top of that they could be getting more than the base 5 million shares of Century.

http://www.benzinga.com/pressreleases/11/11/m2118105/century-iron-mines-announces-update-on-its-acquisition-from-altius-mine

Based on the foregoing, pursuant to the terms of the Principal Agreement and assuming the achievement of the NI 43-101 Milestones, Altius could own up to an aggregate of 40,000,000 common shares of the Company representing approximately 43.08% of the currently issued and outstanding common shares of the Company or 30.11% of the issued and outstanding common shares of the Company on a post transaction basis assuming no other shares of the Company are issued.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on February 14, 2012, 07:02:55 AM
Thanks Abily. I knew it was something huge like that. How realistic that amount is depends on what the conditions to getting it are, though, but Altius has been known to under-promise and over-deliver, so we'll see.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on February 14, 2012, 08:10:44 AM
Wow, very high volume on Alderon. I wonder if it's the Sept-iles announcement that is making people that excited.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 15, 2012, 04:29:33 AM
http://www.marketwire.com/press-release/century-iron-mines-altius-minerals-announce-completion-acquisition-century-altius-labrador-tsx-fer-1589894.htm


More commentary from the old release....for those that have not been watching this board...Wisco is the majority owner of Century iron ore... Wisco financed TC1...and made a fortune...They have to be looking at TC2...they are already partners with Altius at Century. For a quiet year it seems the Altius team has been literally moving mountains.
TC1-Thompson consolidated iron
TC2-Alderon Iron mines

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 15, 2012, 04:40:22 AM

We will post what our updated value of Altius is soon..when I get back from Aruba...but it sure is not in the teens....they have created a lot of value in the last couple of years. Remember these properties were staked in 2003. Not unlike what happened at Fortescue. We see Altius as the Leucadia of that deal. No risk of loss of capital. Whoever can make these properties producers will become the home run hitter aka Andrew Forrest and Wisco... we will get Leucadia type returns.

But the difference is Leucadia put up $400 million...Dalton and his team have used their brain, hard work and very little capital...so their return in our opinion is a grand slam! Our kind of people.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 16, 2012, 05:33:42 AM
http://finance.yahoo.com/news/Cliffs-Natural-Resources-Inc-prnews-474293466.html?x=0

Cliffs year was highlighted by "the transformational acquisition of Thompson Consolidated"  or TC1.

Who will be transformed by TC2?

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on February 16, 2012, 06:57:35 AM
http://www.alderonironore.com/_resources/news/2012-02-16-NewsRelease.pdf

Alderon Continues to Receive Positive Drill Results in Preparation for Feasibility Study
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on February 16, 2012, 01:44:44 PM

We will post what our updated value of Altius is soon..when I get back from Aruba...but it sure is not in the teens....they have created a lot of value in the last couple of years.

Thanks, I'm definitely curious to see what kind of IV range you are seeing.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 17, 2012, 09:21:42 AM

The sun must have fried my brain...we will not be posting our evaluation...if you read through these threads and you have a grade 2 math education you can figure it out...we have build a position over 3 years and it would be ridiculous of us to create more competition for us to continue buying shares as we have...the stock is too illiquid and we have seen our hard work as well as all of yours all over the internet. Our position has become too large to express opinions..so our posts from now on will be facts.
Happy buying and good luck to all.


Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on February 17, 2012, 09:42:06 AM
It's entirely up to you. Personally, I think I prefered the sun-fried Dazel, though  ;)

My estimate of Altius's IV is fuzzy on the upside, but the downside is very clear -- extremely well protected, which makes me comfortable. If something really bad happens to Alderon and Paladin's CMB, it probably means the industry as a whole is depressed enough for Altius to deploy capital in very attractive opportunities (both in royalties and equities, and maybe repurchases), and if Alderon and Paladin go forward as planned, it should be a big homerun. In the meantime, Voisey's Bay is more than enough to fund operations/exploration...

I can't quantify the upside precisely, but the range is extremely attractive and I'm confident in management's ability to do what is best for the shareholder.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 22, 2012, 05:15:13 AM
http://www.labradorironore.com/Corporate-Information/default.aspx


You can plug numbers in using Labrador iron ore royalty to get an idea of what Altius' royalty at Alderon could look like. As large as The iron ore company of Canada is they are producing 15m tonnes of ore right now (they are raising production) less than the 16m that Alderon is planning...we are using these numbers for comparability. Labador iron ore royalty has a 7% payout compared to Altius' 3% and they own 15% equity in the Iron ore company of Canada....their market cap is $2.3b and they do not have any other assets. Keep in mind that they have paid out $100's of millions of dollars in dividends already...$134m last year!

I hated to leave you hanging Liberty.

Dazel.

Title: Re: ALS.TO - Altius Minerals
Post by: Green King on February 22, 2012, 05:54:30 AM
thank you for the pointer
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on February 22, 2012, 07:50:24 AM
http://www.labradorironore.com/Corporate-Information/default.aspx


You can plug numbers in using Labrador iron ore royalty to get an idea of what Altius' royalty at Alderon could look like. As large as The iron ore company of Canada is they are producing 15m tonnes of ore right now (they are raising production) less than the 16m that Alderon is planning...we are using these numbers for comparability. Labador iron ore royalty has a 7% payout compared to Altius' 3% and they own 15% equity in the Iron ore company of Canada....their market cap is $2.3b and they do not have any other assets. Keep in mind that they have paid out $100's of millions of dollars in dividends already...$134m last year!

So if I'm doing this right...

"IOC's 2010 sales totalled 15.1 million tonnes comprised of 3.0 million tonnes of iron ore concentrate and 12.1 million tonnes of iron ore pellets. IOC generated revenues of $2,522 million in 2010 (2009 - $1,144 million). IOC sales traditionally are approximately 35% in North America, 35% in Europe, 25% in the Asia-Pacific region and minor amounts in other areas. "

So if ADV had the same revenues of 2.5B, 3% GSR for altius would be about 75 million (I'm doing that right? GSR is calculated over revenue?). Very impressive. I guess it'll vary with the price of iron ore (f.ex. 2009 was 1.144B), but I was expecting something closer to 40-45m at recent prices. Since the 16m tons/year for Alderon won't happen for a while, the 8m tons/year should be about half that, or 37.5m.

The beauty of a gross sales royalty is that operating costs don't matter too much. Of course you don't want a royalty on a high-cost producer that will shut down if spot prices go down, but it still gives you a lot more predictability than if you had a royalty based on income.

Quote
I hated to leave you hanging Liberty.

You can still send me a private message, y'know ;) It's not like I have enough capital to move this stock one way or the other, and I'm already one of the converts, so it would be more out of intellectual curiosity than to convince me to make a move  :-X
Title: Re: ALS.TO - Altius Minerals
Post by: Green King on February 22, 2012, 08:26:44 AM

Quote
I hated to leave you hanging Liberty.

You can still send me a private message, y'know ;) It's not like I have enough capital to move this stock one way or the other, and I'm already one of the converts, so it would be more out of intellectual curiosity than to convince me to make a move  :-X

Come on share the tools and ideas please.  ;) Value investing is a character game not a information one. 
I would like to thank you both for the contribution to this thread i learned a lot.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on February 22, 2012, 08:30:35 AM
http://www.radio-canada.ca/emissions/bonjour_la_cote/2011-2012/chronique.asp?idChronique=203167

For those who understand French, here's a radio interview with Bernard Potvin of Alderon.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 22, 2012, 11:08:53 AM


Liberty,

It is a moving target as you can see....but if you pick ranges within the numbers you will come with a low end and a high end...Labrador iron ore royalty helps as a guide....they are similar...you have to use them because TC1 did not have a royalty imbedded...
Back out the royalty alone....low range high range...multiply it by the years of production...now that is one asset for Altius!!

Their share of the stock right now is about $120m add it....and then pick ranges for the rest of the assets....you will be surprised when you add them all up!

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 27, 2012, 05:59:34 AM

http://www.mbironoreindex.com/

Iron ore pricing rising up to above $141/ tonne.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 27, 2012, 06:51:45 AM
http://finance.yahoo.com/news/Altius-Continues-Advance-ccn-3438591380.html?x=0


These guys are good...

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Green King on March 03, 2012, 12:52:10 PM
Hey
 I am am going to the PDAC conference does anyone any question want me to ask the Alderon people ?
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on March 05, 2012, 06:48:17 AM
Quote
Alderon Iron Ore Corp. (TSX: ADV) (OTCQX: ALDFF) (“Alderon” or the “Company”) is pleased to announce that its common shares have been approved for listing on the NYSE Amex. Alderon anticipates trading on the NYSE Amex exchange will begin on Friday, March 9, 2012 under the symbol “AXX”. The Company will continue to trade on the Toronto Stock Exchange under the symbol “ADV”.

“This NYSE Amex listing represents another significant milestone in Alderon’s growth,” stated Mark Morabito, Alderon’s Executive Chairman. “The listing will provide greater trading accessibility for United States investors, is expected to enhance liquidity and will provide Alderon with exposure to a wider audience of investors.”
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on March 05, 2012, 09:28:56 AM
New analyst report on Alderon:

http://www.grandich.com/wp-content/uploads/2012/03/NBF_DM12C02_E.pdf

Quote
Alderon Iron Ore – In the Right Backyard: The Kami project's manageable size of eight
million tonnes per year and favourable location close to existing infrastructure, combined
with a management team with extensive iron ore experience, positions Alderon as a
developer that could potentially advance to production for relatively lower capital and
without the need of a partnership. Initiating coverage with an Outperform and $5.10 target
price.
Title: Re: ALS.TO - Altius Minerals
Post by: link01 on March 07, 2012, 07:42:55 AM
i'm curious:

would ALS.To be considered a PFIC for US investors? does this need to be bought in an IRA account to sidestep that?

i havent seen this addressed here, so maybe you're all canucks here?
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on March 07, 2012, 01:38:57 PM
http://watch.bnn.ca/market-call/march-2012/market-call-march-6-2012/#clip632694

Rick Rule"s top pick on BNN is Altius Minerals.....good interview...his admiration for Brian Dalton is pretty obvious.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on March 07, 2012, 01:41:42 PM
http://www.bnn.ca/Shows/Market-Call.aspx

If you do not want to watch the video here are his other picks....I would strongly suggest watching both parts if you can on the BNN site as Rick Rule is an extremely intelligent investor with 30 years experience.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on March 08, 2012, 02:54:51 PM
http://finance.yahoo.com/news/altius-minerals-corporation-tsx-als-210000735.html

No surprises...Voisey Bay royalty $1.2m for the quarter

Example of underpricing of assets...they have cost of a little over $10m on the royalty (they paid $13m for it). They state they have $300m in assets...$10m is the royalty

The Voisey royalty has 120 quarters ( 30 years) of royalties left....so what is that asset worth? It is also inflation protected...quite a bond considering yields these days.

It will be happy bays when the Kami and then the aurora royalties kick in...but for now what is Voisey bay worth?

So we look at buying these royalties for nothing basically...and we are extremely content that Altius is also buying them as they have spent over $2m. The longer this goes on the better...time is the friend of Altius.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on March 13, 2012, 04:42:30 AM
Quiet is good guys....we only want to be on the front page once...Look at the press Viterra is getting for a possible bidding war! In two years I think my Viterra post got maybe 3 responses here on a value investing board!!...

When you think about business you need to understand what the assets are worth to other businesses. Individual investors are driven by sentiment and the crowd..A good business is thinking about maximizing their assets everyday..not the value of their market caps...Is it cheaper to build? Is it cheaper to expand the workforce? How much will it cost to enter another country? And then they always ask the question.
" would it be cheaper to buy out another business" and when it is...they do it...that simple.

Boone Pickens famous line "it is cheaper to drill for oil on the New York stock Exchage than than anywhere else." is true right now and there is trillions of dollars on corporate balance sheets on the sideline...

Altius is in the boring Viterra situation because of the fact no one knows them...Their assets are world class (not unlike Viterra) but their cash in the bank, no debt, and future cashflows make it an incredible business over the next few years unlike Viterra.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on March 13, 2012, 07:25:09 AM
I don't mind quiet either, as long as when there are news they are good  :D
Title: Re: ALS.TO - Altius Minerals
Post by: Myth465 on March 13, 2012, 03:42:03 PM
Quiet is good guys....we only want to be on the front page once...Look at the press Viterra is getting for a possible bidding war! In two years I think my Viterra post got maybe 3 responses here on a value investing board!!...

When you think about business you need to understand what the assets are worth to other businesses. Individual investors are driven by sentiment and the crowd..A good business is thinking about maximizing their assets everyday..not the value of their market caps...Is it cheaper to build? Is it cheaper to expand the workforce? How much will it cost to enter another country? And then they always ask the question.
" would it be cheaper to buy out another business" and when it is...they do it...that simple.

Boone Pickens famous line "it is cheaper to drill for oil on the New York stock Exchage than than anywhere else." is true right now and there is trillions of dollars on corporate balance sheets on the sideline...

Altius is in the boring Viterra situation because of the fact no one knows them...Their assets are world class (not unlike Viterra) but their cash in the bank, no debt, and future cashflows make it an incredible business over the next few years unlike Viterra.

Dazel.

Dazel I will keep this in mind for my other investments. Thanks again.
Title: Re: ALS.TO - Altius Minerals
Post by: valueinvesting101 on March 15, 2012, 09:33:25 AM
I want to buy this stock in US. I see this is listed ATUSF and trades on OTC. Any online discount broker which will allow me to buy these type of securities? Also will I be liable to pay taxes in Canada if I get dividend or if I sell these shares or am I subjected taxes only in US as transaction is done on OTC exchange in US?

I do not intend to sell these for sometime and it looks like these guys will not be paying out any dividend soon but I want to understand tax implications as well.

I have recently started investing in US and hence do not have experience with different brokers.
Title: Re: ALS.TO - Altius Minerals
Post by: Myth465 on March 15, 2012, 04:05:01 PM
You can buy it for free at wells Fargo is you have enough capital. Also TDAmeritrade will let you buy it. I think most discount brokers will actually. I hold it at Wells.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on March 16, 2012, 12:49:24 PM
http://www.cbc.ca/labradormorning/episodes/2012/03/15/more-on-the-wetlands-in-labrador-west/

About ADV's recent meetings with locals. Interview with CEO during second part.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on March 18, 2012, 02:02:53 PM

Shaleb,

You are correct Altius is on the right path at $150....it makes them very very valuable with their iron ore holdings....but capital flows are also important over the next two years as their properties become closer to production...
For example the PEA for Alderon is at $118 iron ore price....The $150 we are at now makes Alderon a huge economic success and altius' royalty payout high...there will be a lot of companies-investors chasing those economics with capital if it is available because there is virtually no yield out there...if a company were to leverage the Alderon project at these interest rates they would make a killing if the economics held...this is why Alderon is saying they could do off take agreements now but they want to wait so there is a bidding war.
If we get a loosening of capital and the iron ore remains here Altius will hit a perfect storm...right place right time.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: value-is-what-you-get on March 19, 2012, 06:29:55 AM

For example the PEA for Alderon is at $118 iron ore price....Dazel

I read $115 in the PEA (page 1-15).  To be clear though, this is not some sort of hurdle price under which things are not feasible, it is a number taken from long term iron ore price averages and at that level generates a 40.2% IRR with a 2.7 year payback of initial investment!  So at $115 it's a home run.  At an ongoing extraction cost before royalty of $44.87 (call it $50) any iron ore price above that is available for payback of initial capital.  Now I don't think it's realistic to say anything above $50 is a winner because it's far less attractive with longer payback of course, but it's also very do-able with iron ore prices BELOW long-term averages, especially in our current low-cost capital environment.

Of course with prices around $150 it's a no-brainer.

"Altius will hit a perfect storm . . . right place right time"  . . . again!


Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on March 21, 2012, 06:41:32 AM
http://www.alderonironore.com/_resources/news/2012-03-21-NewsRelease.pdf
Title: Re: ALS.TO - Altius Minerals
Post by: alertmeipp on March 21, 2012, 07:14:02 AM
very interesting company.. but any near term catalysts?
Title: Re: ALS.TO - Altius Minerals
Post by: BRK7 on March 21, 2012, 10:38:59 AM
M&A activity in Labrador: Ridgemont to Acquire IronOne Inc.

http://tmx.quotemedia.com/article.php?newsid=49581494&qm_symbol=RDG

Mark Morabito is Executive Chairman of Ridgemont and also Executive Chairman of Alderon Iron Ore
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on March 21, 2012, 04:00:04 PM
Re: ALS.TO - Altius Minerals
« Reply #563 on: Today at 07:14:02 AM »
Quote
very interesting company.. but any near term catalysts?


The feasibility study for Alderon will show incredibly good economics...remember the PEA was only for half the resource....the NPV will be in the range of $6 billion...this will be out in the next 3 or 4 months we think....with that comes the bids for he offtake iron ore and bidding likely on Alderon it's self if it does not become more valuable in the market...

More importantly when investors start taking Alderon seriously it will lead them to altius..the Alderon royalty is massive, and other iron ore properties...and then of course their other assets....we think they will do something very intelligent with their cash as well...these guys are not known...they will be.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: alertmeipp on March 21, 2012, 06:54:15 PM
Don't you think they are sitting on too much cash? Do they need the cash for some sort of cap exp? or they are waiting for deals?
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on March 21, 2012, 07:01:41 PM
Don't you think they are sitting on too much cash? Do they need the cash for some sort of cap exp? or they are waiting for deals?

They spend very little and that's pretty much covered by their Voisey's Bay royalty anyway. They are sitting on the cash waiting for opportunities to deploy it when conditions are right, as they've done in the past. Note that the cash is self-generated and not raised from the equity market or debt..
Title: Re: ALS.TO - Altius Minerals
Post by: alertmeipp on March 21, 2012, 07:06:53 PM
did they deploy any during last Oct - Dec?

I don't think they did, I see some buybacks but very light, probably constrained by the volume.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on March 21, 2012, 07:43:27 PM
did they deploy any during last Oct - Dec?

I don't think they did, I see some buybacks but very light, probably constrained by the volume.

Buybacks are indeed limited by volume.

I think they probably did deploy some cash during the last period of volatility (probably some via the partnership with Paul Van Eeden), but I have no idea where yet. They haven't disclosed anything so far, but they were pretty gung ho about it:

http://www.mineweb.com/mineweb/view/mineweb/en/page66?oid=133091&sn=Detail
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on March 22, 2012, 06:13:51 AM
Don t mind the large cash position at all.

In fact it gives me confidence in the underlying value.

Someone made point with RIM-they made all this profit + cash but when you looked at the balance sheet there was not a lot of cash there. 

For me a lot of cash=safety and hedges the risk of there other assets (if economy does well, get asset reflation, price of iron stays or goes up resulting in Alderon doing real well VS downturn, asset deflation/economic turmoil will allow ALS to pick up bargains with their cash balance)
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on March 22, 2012, 04:55:56 PM
http://finance.yahoo.com/news/paladin-energy-ltd-labrador-inuit-124401378.html


Sure would be nice to get the royalty at Aurora producing as well...Paladin seems pretty excited about it.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: alertmeipp on March 23, 2012, 07:55:14 PM
I bot some more, it's one of those companies that u can just buy and forget about it.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on March 27, 2012, 04:54:20 AM
http://www.mbironoreindex.com/


For all the noise about China...iron ore prices are solid... they are back close to $150....remember the Australian mining tax coming up will help Altius and Alderon...it evens the playing field a little with the geographic location advantage that Aussie miners have with china....Alderon' bankable feasibility study will extremely good at these iron ore prices.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: valueinvesting101 on March 27, 2012, 06:05:52 AM
Latest update from the company:
http://www.altiusminerals.com/files/PR1203-%20JVs.pdf (http://www.altiusminerals.com/files/PR1203-%20JVs.pdf)
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on March 27, 2012, 03:11:25 PM
http://www.reuters.com/article/2012/03/27/mining-summit-franco-nevada-idUSL2E8ERXIF20120327?feedType=RSS&feedName=marketsNews&rpc=43


Altius getting active? Hopefully....I would like to see them do a couple of deals...another irc type deal would be nice while we wait for Alderon and aurora.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on March 28, 2012, 06:48:07 AM
http://finance.yahoo.com/news/alderon-appoints-former-newfoundland-labrador-123000982.html


Alderon continues to secure heavy hitters....you will notice that Vettese was lead counsel for Thompson Consolidated.


Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on March 28, 2012, 07:46:52 AM
http://www.altiusminerals.com/files/PR1203-%20JVs.pdf

Update from ALS.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on March 28, 2012, 05:54:53 PM
http://www.businessinsider.com/fatal-flaws-and-opportunities-in-gold-investing-brent-cook-2012-3

Enjoy.
A good interview with Brent Cook....he has some comments about Altius and Alderon...that are similar to board members...however, he is a world renowned geologist and investor...that is the credibility that I like with respect to Altius and Alderon's assets.

"You are paying nothing for the upside in Altius, which kind of reminds me of the late 90's"

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: valueinvesting101 on March 29, 2012, 12:29:08 PM
Buyback by Altius:

http://www.altiusminerals.com/files/PR0512-NCIB.pdf

I like companies doing buyback compared to dividend.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on March 29, 2012, 12:39:22 PM
Buyback by Altius:

http://www.altiusminerals.com/files/PR0512-NCIB.pdf

I like companies doing buyback compared to dividend.

That's just their authorization, afaik. They had the same thing last year. The main limiting factor on their buybacks is daily volume. They did a bunch a few months ago, but I'm sure they wish they could've gotten more at those prices (around $10).
Title: Re: ALS.TO - Altius Minerals
Post by: alertmeipp on March 29, 2012, 07:29:18 PM
It does provide a nice support.
I expect them to start buying next week, last time they buy around 11.
Title: Re: ALS.TO - Altius Minerals
Post by: link01 on March 30, 2012, 12:34:03 PM
Quote

For all the noise about China...iron ore prices are solid... they are back close to $150....remember the Australian mining tax coming up will help Altius and Alderon...it evens the playing field a little with the geographic location advantage that Aussie miners have with china....Alderon' bankable feasibility study will extremely good at these iron ore prices.

Dazel.

hmmmm. do you contemplate at least the possiblity of weaker iron ore pricing, & how would that affect your valuation analysis of altius?

"Going forward, analysts are forecasting significant supply-side
growth – cumulatively around 400 million tonnes (mt) between 2011
and 2016. Iron ore demand, on the other hand, is only expected to
grow at 250-300mt over the same period. As a result consensus
estimates have iron ore prices coming down to a long term price of
around US$75/t from as early as 2016 onwards."

http://www.blackrockinternational.com/content/groups/internationalsite/documents/literature/1111140869.pdf

Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on March 30, 2012, 01:23:40 PM

Link01,


Altius is trading like iron ore is trading at $75...so no I am not worried. Your report is from June 2011...the world was ending as Europe was imploding which would end china, the u.s was about to default on their debt as they were done too...I can find you reports that will say iron ore will be $200 a ton too...I think they are also useless.
China's slow down has slowed down iron ore production....brazil produced less in 2011... I am comfortable with $118... I do not want to see anything above $150 because it does not help long term.
China will build out their infrastructure for the super power of an economy you can be sure...there WILL be hiccups as there is now...but we are in the Jeremy Grantham camp that puts iron ore trend reversal odds of 2 million to one...we like those odds. However, I can not tell you what the price of iron ore will be in 2016.... But more importantly no one else can either.

The best part is we do not have to pay for any risk at Altius...it is in the price already!!

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on March 30, 2012, 02:47:13 PM
http://www.grandich.com/wp-content/uploads/2012/01/Morning-Pulse_20120113_ADV.pdf

Sorry if this has already been posted here.
Title: Re: ALS.TO - Altius Minerals
Post by: link01 on March 30, 2012, 04:10:02 PM
quotesAltius is trading like iron ore is trading at $75...so no I am not worried. Your report is from June 2011...the world was ending as Europe was imploding which would end china, the u.s was about to default on their debt as they were done too...I[/quote]

thx, dazel.

i was just curious as to how much you have baked in various worst case scenario's into your thesis since a worldwide deflationary risk outcome is still very much a possibility. and even absent that extreme, iron ore seems to have alot of new capacity coming online in combo with a china deceleration at the margin, & possibly much worse than that.

and then there's some plausible calls for an end to the commodity super cycle in general like this one:

"China had a massive surge in its demand for commodities over the past decade, fueled by its housing boom and infrastructure investment boom. From 2000 to 2010, China’s imports (in value terms) of iron ore surged by 42.5 times, thermal coal 248 times and copper 16.2 times. During the same period, its production (in quantity terms) for aluminum jumped by 441.8%, cement 219.5% and steel 396.0%. It is the biggest consumer in virtually all commodity categories in the world. In Credit Suisse's view, China was the key factor behind the global commodity supercycle. After a period of economic slowdown, all eyes are on China, hoping that the middle kingdom can return to its might in commodity demand. CS cuts through all the cyclical factors and asks whether China's mighty demand for commodities will return in the medium term - their answer is 'No'. As the economy shifts its growth engines away from infrastructure, construction and exports toward consumption, especially service consumption, the propensity of demand for commodities is bound to decline."

http://www.zerohedge.com/news/china-and-end-commodity-super-cycle

sorry to link to those anarchistic ideologues at zerohedge, but they do sometimes link to interesting outside research that is worth a read if you can ignore their own crazy talk, end of the world wishing biased commentary.

 
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 01, 2012, 05:35:50 PM
http://www.bloomberg.com/news/2012-04-01/china-s-manufacturing-expands-at-fastest-pace-in-12-months-1-.html

It appears they have not closed up shop in china yet!

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Green King on April 01, 2012, 07:36:16 PM
Dazel

Do you know they calculate those odds ? Game theory ??

Thanks

GK


Link01,


Altius is trading like iron ore is trading at $75...so no I am not worried. Your report is from June 2011...the world was ending as Europe was imploding which would end china, the u.s was about to default on their debt as they were done too...I can find you reports that will say iron ore will be $200 a ton too...I think they are also useless.
China's slow down has slowed down iron ore production....brazil produced less in 2011... I am comfortable with $118... I do not want to see anything above $150 because it does not help long term.
China will build out their infrastructure for the super power of an economy you can be sure...there WILL be hiccups as there is now...but we are in the Jeremy Grantham camp that puts iron ore trend reversal odds of 2 million to one...we like those odds. However, I can not tell you what the price of iron ore will be in 2016.... But more importantly no one else can either.

The best part is we do not have to pay for any risk at Altius...it is in the price already!!

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: JAllen on April 01, 2012, 07:39:17 PM
Dazel

Do you know they calculate those odds ? Game theory ??

Thanks

GK


Link01,


Altius is trading like iron ore is trading at $75...so no I am not worried. Your report is from June 2011...the world was ending as Europe was imploding which would end china, the u.s was about to default on their debt as they were done too...I can find you reports that will say iron ore will be $200 a ton too...I think they are also useless.
China's slow down has slowed down iron ore production....brazil produced less in 2011... I am comfortable with $118... I do not want to see anything above $150 because it does not help long term.
China will build out their infrastructure for the super power of an economy you can be sure...there WILL be hiccups as there is now...but we are in the Jeremy Grantham camp that puts iron ore trend reversal odds of 2 million to one...we like those odds. However, I can not tell you what the price of iron ore will be in 2016.... But more importantly no one else can either.

The best part is we do not have to pay for any risk at Altius...it is in the price already!!

Dazel

I've been wondering exactly what they meant as well.  I think that iron ore has had the biggest percentage increase of any commodity (>1000&) which is my guess about why iron ore leads their list of paradigm shifts for commodity prices....
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on April 02, 2012, 09:35:58 AM
I believe it was all discussed by Bill Gross at Pimpco. And they ended up with a 1 in 1 000 000 chance that the iron ore increase was due to volatility.

BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 04, 2012, 07:11:43 AM
http://www.businessweek.com/news/2012-04-02/fortescue-s-power-says-china-steel-demand-very-strong


Fortescue is not far off it's 52 week high....they are 17%...owned by Chinese interests and no one is more wired to China than they are...

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 04, 2012, 07:17:22 AM


Beer baron,


I am referring to the work that was done by Jeremy grantham...a link has been posted here before..the thread is getting a little long...it was not due to volatility in their analysis...

It was the probability of reversing the iron ore trend...2 million  to one chance of that...they used 100 years of data...
As we know GMO...does their homework.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Green King on April 04, 2012, 09:12:29 AM
How did they get it ?
what methods did they use?
how do i know if they are right and how do i get a mental model of what they have done ?



Beer baron,


I am referring to the work that was done by Jeremy grantham...a link has been posted here before..the thread is getting a little long...it was not due to volatility in their analysis...

It was the probability of reversing the iron ore trend...2 million  to one chance of that...they used 100 years of data...
As we know GMO...does their homework.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: link01 on April 04, 2012, 10:05:56 AM


Beer baron,


I am referring to the work that was done by Jeremy grantham...a link has been posted here before..the thread is getting a little long...it was not due to volatility in their analysis...

It was the probability of reversing the iron ore trend...2 million  to one chance of that...they used 100 years of data...
As we know GMO...does their homework.

Dazel.



Beer baron,


I am referring to the work that was done by Jeremy grantham...a link has been posted here before..the thread is getting a little long...it was not due to volatility in their analysis...

It was the probability of reversing the iron ore trend...2 million  to one chance of that...they used 100 years of data...
As we know GMO...does their homework.

Dazel.

dazel, i own a some altius in an ira account (are they a PFIC for US investors?) because of your ongoing generous & compelling analysis of it on this board (& because its trading at just above book with a nice cash cusion, plus they seem to be thoughthful capital allocators who dont indiscrimately spray tons of share issuance for acqusisitions at every turn), but looking at at chart of iron ore prices for the past 10 yrs presents---for me, at least---argues for some caution:

http://www.indexmundi.com/commodities/?commodity=iron-ore&months=180

despite what GMO opines iron ore prices look like they might have an air pocket underneath it if the tug of war between inflation & deflation goes the latters way. commodities in general have been a big beneficiary of the worldwide credit boom over the last decades. but then again, so have bonds because of the incrementally slower growth that each dollar of defcit spending has bought, & with it, the prospect of a deflationary slump when the music stops. at that point i'll be looking more aggressively for inflatioanry investing themes.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on April 04, 2012, 10:50:37 AM
After reading some Nassim Taleb I'm now very suspicious of any predictions of "1 chance in 1 million" or whatever, but I do foresee that base metals will benefit from a large portion of the world developing. South-America, Asia, Africa.. Even the US economy going back to normal.

And if things don't go well for a while, well, Altius has no debt, lots of cash to deploy, and great capital allocators who own a good number of shares in charge. So I'm not worried. This is what reassures me, rather than quantitative predictions.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 05, 2012, 06:41:40 AM


Green king,


You do not and will not know if they are right...but their analysis is different from Taleb who is always pedi ting a black swan will appear....GMO called the market meltdown on fundamental analysis and think Fairfax got a lot of their information from GMO. I am not saying we could not have a pullback in iron ore quite frankly it would be beneficial to have a pull back.
Why?
Supply demand. GMO's thesis is that there demand will continue will continue to outstrip supply....why? Iron ore was under produced for so long because of it's low price....the opposite happens at these prices...more supply comes on...however, remember 2008? The were a ton (pardon the pun) of projects delayed and shelved during that period...you cannot just bring supply on it takes the better part of a decade to get mine going. If prices were to fall back it would actually help Altius because there iron ore properties are in an iron ore district...infrastructure is already there. That is why Thompson Consolidated were able to plug through 2008 and 2009....low cost is the key. Alderon would benefit from a drop in iron ore prices.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on April 05, 2012, 06:58:29 AM

You do not and will not know if they are right...but their analysis is different from Taleb who is always pedi ting a black swan will appear....

I was more basing my comment on Fooled by Randomness than on The Black Swan. In it he makes a very good point that people assume that events follow a guassian distribution while in fact that's not the case. The math whizes believe that things are actually more predictable than they are. Hi prescription to survive and thrive in this umpredictable world (where we regularly see events that people once predicted were once-in-a-thousand years events..) is to have robust and resilient systems. I believe that Altius is one such robust and resilient company.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 05, 2012, 07:03:42 AM
Liberty,


Thanks for the remarks....

I am a value investor. We will leave the predicting to others...we buy a buck for 50 cents. That simple....the macro is not our game. The macro I provide is other people' s analysis...I spend very little time on it....just pass it on. Our best case scenario is that commodities get crushed on the same arguments we are talking about. Altius is in the drivers seat....they can pick bucks all over the place for 50 cents....they are investors...NOT MINERS.
That is why we own them...

http://www.google.com/finance?q=TSE%3ALIF.UN

Labrador iron ore royalty is an example of what is possible at Altius..the market has priced this in at a value of 0...after 9 years of developing their iron ore properties from scratch.


Most importantly our upside is Free....there inventory of assets are priced at close to zero.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on April 05, 2012, 07:58:54 AM
I think we're pretty much on the same wavelength, Dazel. I too sometimes look at macro predictions, but I don't give them much weight. What matters to me is good management, good assets, good price, good downside protection.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 09, 2012, 06:13:35 PM
http://www.forbes.com/sites/kenrapoza/2012/04/09/china-housing-bubble-is-over-says-jim-rogers/


More info on china...take it for what is worth but we are seeing iron ore tick up..and hold steady around $150...there is only one reason for that and it is china.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on April 10, 2012, 08:44:27 AM
Video about Alderon:

http://alderonironore.com/_resources/videos/alderon_video_20120321.html
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 10, 2012, 11:50:19 AM
http://www.commodityonline.com/news/indonesian-ore-export-ban-to-be-supportive-for-nickel-commerzbank-47137-3-47138.html

Altius Voisey bay royalty and nickel holdings just got huge boost!!

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: bathtime on April 11, 2012, 08:52:45 AM
Globe and Mail article on Alderon as possible takeover candidate:

http://www.theglobeandmail.com/globe-investor/alderons-pedigree-makes-it-a-takeover-target/article2397582/
Title: Re: ALS.TO - Altius Minerals
Post by: naboo on April 11, 2012, 11:22:42 AM
Is now the best time to sell alderon? why not wait till the beingging of the production?

Globe and Mail article on Alderon as possible takeover candidate:

http://www.theglobeandmail.com/globe-investor/alderons-pedigree-makes-it-a-takeover-target/article2397582/
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 11, 2012, 02:07:48 PM

They will not be selling here...if it were to triple like the article suggested they would be sellers...the more likely scenario is they sell at the $6 level to a producer that assures them the quickest production.

As I have said the royalty is worth more than all Altius right now. The market does not care right now...and we are fine with that...it is coming together as we expected.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Ross812 on April 12, 2012, 06:21:50 AM
I've been pouring over Altius trying to get more comfortable with them before I increase the size of my position. I found an interesting blog that discussed Altius's involvement with the Lower Churchill Hydro Royalty, and the NLRC. The post draws a lot of connections showing Altius's government connections. The post concludes with the author buying shares in Altius, so don't let the author's tone get to you too early.

http://rocksolidpolitics.blogspot.com/search/label/Altius

I am trying to invert and find a reason to short Altius before buying any more. Has anyone else tried this. Have you come up with anything? Was the NLRC blowup the reason the stock price fell? I'm looking for anything that could derail this investment. Right now, it seems the company is riding on Alderon. Are they being discounted because half their market cap is invested in a junior miner?
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 12, 2012, 08:30:26 AM


Ross182,


I would love to see a short thesis but more importantly I would love to see a large short percentage literally...an illiquid stock sometimes acts strangely. A short would have had it's way with Altius shares as they would have been able to move the price at will. I know you are doing an exercise...just saying a squeeze would be deadly for a short...

Altius position in Alderon is $32mx $3.50...$112m.  A little over one third market cap...

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Ross812 on April 12, 2012, 09:25:22 AM
Dazel,

I've owned Altius since August of 2010 after I read your posts and ran the numbers. It has stayed about a 5% position which is pretty typical if I haven't spent the time to become really comfortable with it. I've just kept up with your commentary and read reports from the company. I'm about 20% cash right now and have another 20% coming if Jef stays above 17 on options expiration.
I really need a place to put the cash and Altius looks to be the cheapest thing I'm watching right now. It seems to be a great place to put some money, but I need to understand it better. Thus, getting to know it from the other side of the trade. I'll post if I find anything else interesting. So far, other that macro problems, I haven't turned up anything.

You're right on the Alderon position. I was typing faster than I was thinking. Alderon makes up a huge portion of the Altius market cap. If Alderon was backed out, Altius seems fairly valued in an ideal liquidation situation. So the margin of safety is Alderon, which seems to be a great investment so far. 
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 12, 2012, 12:00:22 PM

Ross182,

It is a very important exercise you are doing...I would look at all assets individually...negatively...remeber that Alderon stock and Alderon 3% royalty are different assets...they do not effect each other unless Altius uses it's control position to secure that Alderon comes to production.

So what is Alderon stock worth?
What is the 3% royalty worth on their own?

In a negative analysis (what the market is pricing) the royalty is worth 0. You do not have to do much math in inversion because the market has already done it.



So the billion dollar question is when do you add the royalty to the value of the stock?
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on April 13, 2012, 04:15:41 AM
Chinese investment finally arrives.  (I guess this explains recent alderon sp movement)

http://www.bloomberg.com/news/2012-04-13/hebei-steel-to-spend-195-million-on-alderon-stake-ore-venture.html
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on April 13, 2012, 04:35:16 AM
Alderon press release here:

http://www.alderonironore.com/_resources/news/2012-04-13-NewsRelease.pdf
Title: Re: ALS.TO - Altius Minerals
Post by: value-is-what-you-get on April 13, 2012, 05:45:53 AM
Nice development.  Like the ongoing management fee for Alderon, the minimal 5% discount for ore with a cap on volume and the nice steady pace at which this is developing.  They are delivering good results on schedule without giving away the farm.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on April 13, 2012, 07:06:56 AM
Haven't read all the details yet, but seems like a very good deal.
Title: Re: ALS.TO - Altius Minerals
Post by: naboo on April 13, 2012, 07:24:06 AM
It is more and more likely that Alderon will be CT2.

Couldn't get ALS at $10 any more. Big Loss!



Alderon press release here:

http://www.alderonironore.com/_resources/news/2012-04-13-NewsRelease.pdf
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 13, 2012, 09:33:18 AM


The world resource sector will now take notice of Altius....This is the biggest steel producer in China. Global news will have companies looking at Altius' assets and value.

What exactly is that 3% kami royalty worth now? This is a game changer absolutely huge for Altius.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Ross812 on April 13, 2012, 11:07:16 AM
How many tons of iron can Alderon produce? The release this morning suggested 8 million tonnes? 4.8 million tones purchased by Hebei for 95% the market cost. Lets assume $100/ton so Alderon is now making at least grosses 456 million. Altius gets 13.7 million? ($100*95%*4.8*3%) DCF discounted at 11%, 0% growth. The 3% royalty is worth 124 million on the extreme low end...
At $140 per ton 8 million per year the royalty is worth 305 million...

Either way you could put a conservative and say the Alderon Royalty and shares are worth 230 million.

Millrock 7.93 million shares worth $2.06 million
3.45 million warrants worth $.24 million

NLRC
0

Voisey .3% Royalty, 2.25 million per year
0% growth, 11% discount 20 million

CMB
2% uranium ?
2% smelter ?

Viking Gold 2-4% sliding royalty ?

Rambler
12 million shares worth 7.2 million

Labrador Iron Ore
I think this one is huge. Rio Tinto agreement for 3% or 10 million + 2%
Ill go really conservative here and say all 4 projects are only worth the Rio Royalty -$30 million

Cash and Income Tax Receivable - $58 million

What I consider a very, very conservative of the cuff valuation-
347.5 million

Very conservative, not even considering:
Viking gold royalty
Alberta Oil Shale holdings
CMB Royalty
NLRC loan recovery

Any one of those is easily worth 5-10 million...


The market is saying 348 right now...
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 13, 2012, 11:32:10 AM
 Ross182,

Thanks...i know you are being negative...so added a few corrections and higher assumtions.


-Kami has apllied for 16 million tons a year...on your numbers at $140t x 16mt Alderon would be $460m

-if they would sell the Voisey bay for $20m they would be locked up...$4m normal annualized. 30x $4m=$120 we think higher because of the nickel situation in indonesia.

-rambler gone.

- where is the $175m cash and the $25m with Cranberry capital?

Dazel.


Title: Re: ALS.TO - Altius Minerals
Post by: JAllen on April 13, 2012, 11:33:39 AM
8M tons a year implies a 60 year mine life at ~500M tons.  They have, very probably, 1B+ tons.  A 50 year mine life implies 20 tons a year.  These iron ore companies typically ramp up to twice, at least their initial production 5 years after the initial mine has started.

The Alderon royalty NPV is $17.5 per Altius share with these assumptions: $80 beginning iron ore price growing at 3% per year; 9% discount rate; 8M tons (starting 2016), 10, 12, 14, 16 up to 30 M tons production in 2028 staying at 30 tons per year until 2046 (cumulative 767 tons of production).

Change the starting price to $120 and it's $27 per Altius share; $150 and it's $34/share.
Title: Re: ALS.TO - Altius Minerals
Post by: FFHWatcher on April 13, 2012, 12:38:51 PM
Questions/Comments

What am I missing with your math numbers?
-Kami has apllied for 16 million tons a year...on your numbers at $140t x 16mt Alderon would be $460m
$100*95%*4.8*3%  Why did you use 4.8M mt ?  That is just what Hebei is buying.



Alderon Corp Presentation shows 15 year mine life

Is this a correct summary as to what the transaction is?
$106M for 25% of Kami project in the new LP (Alderon retains 75% of LP)
25% ownership in Alderon via $88M share purchase of treasury Shares
All money ($88M + $106M) spent to develop this $1B project.
Remaining $$ ($500m - $1B) needed will be financed via debt/equity/other JVs

Hopefullly Altius' 3% royalty is on the entire mining operations at Kami, not just 3% on Alderon.

Is Altius potential 3% royalty as easy as;
8M mt x $100-140/t x 3%? Maybe $25-30M/yr once it gets into commercial production in approx. 2015/2016. Or am I missing a step?


Title: Re: ALS.TO - Altius Minerals
Post by: Ross812 on April 13, 2012, 12:55:36 PM
Dazel,

I was working off memory and some jotted notes from reading the 2010 annual report.

Current assets are 176 million 31 Jan 12. Of that 50.6 million is cash and taxes receivable. They don't have 175 million in cash.
I didn't see the 25m Cranberry capital anywhere. How do you value the J/V? at 50% or 80%?

I very well may be off on the NPV of the Alderon 3% Royalty. 4.8mt has been spoken for by Hebei; they may hit 16mt but even at 8mt the valuation is compelling. pof4520, this is going to be a show me stock, no one is going to give them a NPV on 20mt a year. I started with a ore price growing at 3% a year but went back to 0% because I don't see Iron ore growing in excess of inflation from here. China is going though a major build out right now. I don't see it increasing in speed. 9%, 11% what is the correct benchmark? Should you discount iron or at the developing world's GDP growth rate? I chose the risk free rate + China's current GDP growth rate... It seemed conservative.

I value Alderon Shares at $3.4, cost at the Hebei investment 33m shares = $112m

In the 2010 annual report Altius recognized 15.3 million in 7 years of owning the Voisey BAy Royalty, 2.18m per year; I used 2.25m. They made 3m 9 months ending 31 Jan 12, 4.1m 2009, 1.7m 2010. I like your 4m number. A DCF at 0% growth, 11% discount gives NPV of 36.3m.

Alderon shares + Royalty NPV (8mt at $100, 0% G, 11% D)
112 + 218 = $330m

Voisey- 36 m

Millrock- 2.3m

Labrador Iron Props- 30m

Cranberry at 50% - 12.5m

Cash- 50m

Total - $460m + free options galore
24% margin of safety at today's price
Back out Alderon though (if something goes bust, 10% chance?) the valuation gets a lot harder to justify...

Basically assigning value to the Alderon royalty. Discounting their 80m in investments in associates. And assigning a more reasonable value to Voisey (on the books for 9.6m)
Title: Re: ALS.TO - Altius Minerals
Post by: barminov on April 13, 2012, 03:48:47 PM
From last Q:

Cash $49.5
Marketable Securities $124.4

"Marketable securities consist of Canadian government guaranteed and corporate backed commercial paper,
bonds and marketable securities  with original maturities of greater than three months at the time of
purchase."

I think it's pretty safe to call that cash or "cash equivalents." Where/how are you getting $50.6?
Title: Re: ALS.TO - Altius Minerals
Post by: JAllen on April 13, 2012, 04:11:32 PM
Altius invested $25M in Cranberry.

http://www.24hgold.com/english/news-company-gold-silver-altius-partners-with-cranberry-capital-to-create-new-company.aspx?articleid=650579
Title: Re: ALS.TO - Altius Minerals
Post by: Green King on April 13, 2012, 08:59:33 PM
So this is done right ?
Is there any other risks out there other than China Blow up? (Very Low)
ALS can get 15% ROE no problems over the next five years ?

We are just arguing about how much. Right?
Title: Re: ALS.TO - Altius Minerals
Post by: Ross812 on April 13, 2012, 10:32:34 PM
From last Q:

Cash $49.5
Marketable Securities $124.4

"Marketable securities consist of Canadian government guaranteed and corporate backed commercial paper,
bonds and marketable securities  with original maturities of greater than three months at the time of
purchase."

I think it's pretty safe to call that cash or "cash equivalents." Where/how are you getting $50.6?
50.6 is cash + income tax receivable on the 31 Jan 2012 report. As for124.4 in marketable securities, their description was veg. Does this include alderon? They made 1m, off the top of my head, in interest expense. So these marketable securities, ie bonds are yielding .8%? Something doesn't add up unless this is revering to shares in partners. The 80m on the last reported as interest with partners is not enough for alderon and cranberry.

As for cranberry, thanks it wasn't in the reports I read.


[/quote]
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 15, 2012, 01:33:57 PM


I know it sounds wrong but the cash equivalents are $175m...the Alderon shares are separate.....if you include the Alderon shares altius basically trades for cash...an absolutely stupid price.

The yield is low because interest rates are low on government paper. None of the royalties are in the Altius price...

I will do some detail on this and start another thread...this one is too long...

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: shalab on April 15, 2012, 02:55:56 PM
Total equity is 287 million per last Quarter report. (Jan 12) It maps Alderon stake separately (investment in associates ) and values that and the sparkfly stake together around 85 million. See section 8 of the quarterly report attached.

Page 3 has total equity at ~287 million.

Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on April 15, 2012, 03:28:50 PM
Agree with Shalab + Dazel

Putting  #'s that Ross812 provided + corrected current asset value I get:


Current assets are 176 million 31 Jan 12. Of that 50.6 million is cash and taxes receivable.

Voisey BAy Royalty, NPV of 36.3m.

Alderon shares + Royalty NPV (8mt at $100, 0% G, 11% D)
112 + 218 = $330m


Millrock- 2.3m

Labrador Iron Props- 30m

Cranberry at 50% - 25m

Total - ~$599m + free options galore

29.8 million shares= ~$20 per share

~40% margin of safety at today's price

Seems like a good story + find by Dazel, have been adding in + now one of my biggest holdings. Thanks to all. (This proclamation should give us another buying opportunity in the near term)
Title: Re: ALS.TO - Altius Minerals
Post by: Ross812 on April 16, 2012, 06:10:13 AM
Thanks everyone,

The cash position was confusing. Altius seems to be a pretty simple company, but it has a lot of moving parts.

Assuming the 124.4 million is government paper, this is trading for its liquidation cost at a minimum.

Current Assets @ 95%- 167m
Voisey Royalty @ 75%-  27m
Alderon Shares @ 60%-  67m
Alderon Royalty @ 20%-  44m
Labrador Props @ 60%- 18m
Cranberry @ 50%- 12.5m
Millrock @ 60%- 1.4m

total- 337m

There is a lot of guessing in there, but 337m seems like a conservative floor. The best part is this is not a cigar butt company and should be trading at a 600m market cap. At 600m there are still all kinds of free call options that could make Altius even more valuable. Being able to buy this near its liquidation value is remarkable.

Thanks Dazel


Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 16, 2012, 08:03:03 AM

What is missing? The value of the Alderon position...now that they have secured financing and things look like they are headed to production...here is what we see.

Look at a Labrador iron ore royalty for an almost exact model for Altius ownership positon in Alderon. Labrador iron ore royalty to us shows us looks like what a mature Altius would look like (on this one asset-Alderon).

So forget the rest Altius for now...this is a spin out scenario.

Labrador iron ore owns 15.1% of the iron ore company of Canada...they have been diluted like Altius will be for a smaller piece of a bigger market cap.Rio Tinto owns 58.72%, mitsubshi 26.18%.

Altius will get diluted as the project gets built out...so we use 15% ownership the same as Labrador iron ore and a 3% royalty compared to 7% at Labrador royalty.

Altius Royalty Corp (hypothetical spin out)

Royalty income
$28m (net of 20% Newfoundland royalty tax)
-8mtX$145t= 1.16b @ 3%=$35m @20% tax royalty tax= $28m

Equity income
Alderon- PEA numbers
8mtX$145-$45 (total operating costs)= $800m profit

We will use $500m.

Altius royalty Corp. Income $75m @22.5m tax (30%)
$52.5m

Total income to Altius
$82.5m

Labrador iron ore trades at 10 times income

Altius royalty Corp at this valuation
$825m

When Alderon reaches 16mt production you can double your numbers....
$1.65 billion market cap.

You can discount how you like as you see we have done with the income from Alderon....reducing it to $500m....from the $800m @30% tax=$660m

NO ONE is running the numbers on how huge Alderon is for Altius. We welcome negative scenario's including a drop in the price of Iron ore...please someone run some numbers...

Disclosure
We own a lot Altius shares.

Dazel.

Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on April 16, 2012, 10:47:13 AM
Conf call tomorrow morning at 9:30:

http://www.alderonironore.com/_resources/news/2012-04-16-NewsRelease.pdf
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 18, 2012, 09:29:21 PM

For the china watchers...government letting the market know they are  loosening monetary policy.

http://www.bloomberg.com/news/2012-04-19/china-s-central-bank-to-ensure-liquidity-xinhua-says.html
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on April 24, 2012, 07:01:51 PM
http://www.businessweek.com/news/2012-04-24/coal-seen-rebounding-as-china-sets-steel-output-record


No one talks much about India but they have big plans for steel as you can see from the article.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on April 24, 2012, 07:55:38 PM
http://www.businessweek.com/news/2012-04-24/coal-seen-rebounding-as-china-sets-steel-output-record


No one talks much about India but they have big plans for steel as you can see from the article.

Dazel.

You sure are a preacher for this idea Dazel :)
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on April 26, 2012, 11:17:42 AM
http://www.montrealgazette.com/business/Huge+mining+projects+works/6513364/story.html
Title: Re: ALS.TO - Altius Minerals
Post by: prunes on April 29, 2012, 08:29:58 AM
Random thoughts:

Alderon trades at a 90% discount to the NPV of its primary site. Anyone know of any comps for other junior miners at this stage in the development process? Is this fair? The market seems to be giving Alderon a 10% chance of hitting this plan.

I liked the slide in the Alderon investor deck showing Beijing / Shanghai steel consumption per capita compared to the interior cities.

Alderon still needs to find a large slug of capital to fund development. The Hebei deal is promising. Eventually Alderon will need to sell equity to one of the majors. At this point would we expect ALS to sell some of its equity to the major as well?

Agreed that the real value for ALS is in getting Alderon producing. The royalty will be very valuable and isn't being recognized by the market at all. What is Alderon's plan if China melts down before production starts?

Seems like there's a lot of key man risk at ALS. What's been the key to ALS's success at exploration and execution? Dalton is young and owns a decent chunk of the company so he's not likely to go anywhere. The other major key man risk would be with the geological staff I think? Part of the reason why the company has done so well is because ALS practices geographical specialization. How long before ALS needs to expand outside Newfoundland and Labrador? How can we evaluate how much the company's previous successes have been due to luck? How can we evaluate the odds that the company can repeat its successes in the future?

Seems like Alderon is the biggest catalyst for ALS but that value from this catalyst probably won't be recognized until 2015 at the earliest. Correct or incorrect?
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on May 01, 2012, 07:59:01 AM
http://www.marketwatch.com/story/alderon-receives-initial-results-from-final-drill-program-before-feasibility-study-2012-05-01-831150?reflink=MW_news_stmp

Quote
Alderon Iron Ore Corp. CA:ADV +2.46%  AXX +1.58%  ("Alderon" or the "Company") is pleased to announce the first set of assay results from the ongoing drill program on its Kamistiatusset ("Kami") Iron Ore Project in western Labrador. The majority of these results are from the North Rose area and are all within the currently defined mineral resource estimate. The program, which began in mid-January, has concentrated on infill drilling with the goal of upgrading the current mineral resource into the measured and indicated categories in preparation for the Feasibility Study expected in Q3 2012. Highlights include:



       
       
Code: [Select]
-----------------------------------------------------------------------
        -----
                                  From             To       Interval
        Drill Hole             (metres)       (metres)       (metres)   Total Iron %
        ----------------------------------------------------------------------------
        K-12-176A                242.0          305.0           63.0            27.1
        ----------------------------------------------------------------------------
          and                    338.0          593.2          255.2            30.1
        ----------------------------------------------------------------------------
        K-12-179                 281.0          398.3          117.3            28.0
        ----------------------------------------------------------------------------
          and                    398.4          527.8          129.4            32.6
        ----------------------------------------------------------------------------
        K-12-182                  85.5          111.0           25.5            31.2
        ----------------------------------------------------------------------------
          and                    177.0          430.4          253.4            29.3
        ----------------------------------------------------------------------------
        K-12-184                  59.0           98.0           39.0            29.3
        ----------------------------------------------------------------------------
          and                    182.0          452.0          270.0            31.1
        ----------------------------------------------------------------------------
        K-12-188                  66.0          101.6           35.6            31.7
        ----------------------------------------------------------------------------
          and                    126.0          237.0          111.0            32.3
        ----------------------------------------------------------------------------
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 01, 2012, 12:07:14 PM
Prunes,

Catalysts.....
Alderon has been mentioned....it is obviously the elephant in the room.....if someone were looking to take out Alderon....Altius as a whole would be a logical target.

The resource area has been decimated over the last 12 months (the china story of implosion is old)...there are plent of investment banking opportunities out there who is to say we do not spend the $200m on IRC like investment...Altius could easily raise debt in the market for this type of opportunity...they have an excellent record here as well...Voisey bay royalty was a steal as well..Mill rock cost base is 0.

If china were to fall to pieces...there would be lots of opportunity for the cash.

Uranium has been forgotten because of Japan...that will not last long..the cost base of the Aurora royalty is $200m....uranium has huge catalysts...There has been major activity in the Canadian uranium market...the central belt has just been approved for activity (march) after a 3 year moratorium...Paladin has big plans for the central belt

There is a huge pipeline....especially in iron ore...management has proven itself here before...as for the future discoveries...they are a bonus...we are not paying anything for them.


Brian Dalton has proven to be a superstar but he obviously has a great team around him...His large chunk of the company aligns his interests with yours....as for the future there knowledge in the royalty area would make the investment banking area very promissing especially if they did sell off the Alderon equity.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: BRK7 on May 01, 2012, 10:29:37 PM
Jim Chanos was interviewed today (I think) at the Milken conference, and had the following to say on Fortescue (which he has sold short):

Chanos:  “over 90% of Fortescue’s revenues in iron ore go to China.  They are expanding aggressively and bringing on new capacity, just at the point at which I think iron ore demand will drop.  Iron Ore (in 2012 dollars) basically traded at between $40-$50/MT for the better part of 110 years.  In 2005, the price chart does a hockey stick up to $200/MT, and iron ore now is trading at about $150/MT.  The cost of pulling this stuff out of the ground is still no more than $30-$40/MT.  This is not a “rare earth” metal--there is iron ore everywhere around the world.  Everybody and his brother is going to be mining this stuff to try to sell it to the Chinese. “

Now, I’m not a big fan of Chanos, but his comments got me thinking about a scenario in which iron ore prices decline sharply (not forecasting this necessarily, just to trying to explore the implications).  If I recall correctly, Alderon’s PEA assumed operating costs of about $45/MT in addition to nearly $1B in capital costs. At what iron ore price does it no longer make sense for Kami to get funded/operate?  Alternatively, where is Alederon/Kami in the cost curve?  Will they be among the low-cost producers?
Title: Re: ALS.TO - Altius Minerals
Post by: BRK7 on May 01, 2012, 10:31:37 PM
milken institute panel on commodities (1hr,15min):

http://www.milkeninstitute.org/presentations/mediapage.taf?ID=3427
Title: Re: ALS.TO - Altius Minerals
Post by: netnet on May 01, 2012, 11:14:08 PM
Quote
Uranium has been forgotten because of Japan...that will not last long..the cost base of the Aurora royalty is $200m....uranium has huge catalysts

Cost to Paladin was 210M, (gross proceeds to Altius 210M).  Cost to Altius 650K!

Dazel, if I might ask, with what metric do you evaluate the pipeline? (that you might care to share)
For me frankly all I can say is that Altius is trading on cash plus securities with no royalty upside counted, (look how various royalty companies trade) and no Alderon upside.

Hence I like the name as well, but I can not get a handle on best, average and worst case on potential projects.  Now that may be a fool's errand to try.  One could argue that it is rather more productive to look at what Dalton has done; figure he has a runway, a pile of cash to take off the runway and buy and buy big into Altius!  Frankly I can find no holes in either the (current) price, the value of the company, the team running it, or the future--and that's even with a severe Chinese downturn.  This really does look like one of those, "well honey I think I found a pot of gold (or a thirty something Warren Buffett--although I hate when people say this.  Better, how about a thirty something Seymour Schulich.) " Put a 10-25% of net worth in and go to the beach.
Title: Re: ALS.TO - Altius Minerals
Post by: Green King on May 02, 2012, 02:14:10 AM
I would also like to know how you value the pipeline.
Please
:D
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 02, 2012, 02:44:44 AM
Brk7,


I can only be so lucky as to make a fortune off of a chanos mistake twice...remember he said fairfax was a zero...we backed up the truck at an average cost of $80! The china meltdown is priced into stocks that is why Altius receives 0 for it's royalty "streams"...and that is why there are many opportunities for the cash at Altius is sitting on...remember just a 10% return on the cash and marketable securities would be huge to Altius...if Dalton were to pull something off it would be a game changer as well...market has no concept or thought of this very real scenario. They are described as an investment or merchant bank...we like that they are waiting for a home run with their capital...
But the china scenario you are speaking of....or the fear there of has created a higher possibility of them finding a real bargain.


Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 02, 2012, 02:48:03 AM


Brk7,

10% annual return on the cash and marketable securities....is about a buck a share...we expect a lumpy ride as with companies like Leucadia.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 02, 2012, 02:57:35 AM

We value the pipeline outside of Alderon and Paladin (aurora) at it's cost which is close to zero....obviously there is huge potential there but the shorter term drivers of Alderon and the deployment of investment capital are the elephant in the room.

Paladin (aurora) cost base was $600k but they realized $200m gain from it...so not sure and it does not matter much but I think that becomes the cost base for the royalty.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 02, 2012, 03:11:35 AM

Brk7,

http://www.bloomberg.com/news/2012-05-01/analysts-who-called-2010-bottom-in-china-stocks-now-say-buy-1-.html

For fun....we have no idea how to predict the fall of a country or he rise of a country form that matter...china is not looking at 2012....they are looking at the next couple of decades.

 there is more to the iron ore story than china...
If you have looked at the iron ore story or mining in general you will see that capital raising has dried up...therefore the mines that are anticipated will not
come on stream...when anticipated...Higher cost capital projects are being delayed.

Alderon is not low cost at $45/ a ton but to build for a billion bucks is low....as was Thompson consolidated...the reason is where it is located...infrastructure is very close...rail, roads,  port being built and low cost power.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on May 03, 2012, 01:07:18 PM
http://www.alderonironore.com/alderonironore.com/_resources/news/2012-05-03-NewsRelease.pdf
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on May 09, 2012, 05:35:34 PM
http://www.zerohedge.com/news/rick-rules-primer-contrarian-speculation

Possible opportunities for ALS to make good deal in depressed/distressed junior resource sector?
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on May 09, 2012, 07:10:57 PM
http://www.zerohedge.com/news/rick-rules-primer-contrarian-speculation

Possible opportunities for ALS to make good deal in depressed/distressed junior resource sector?

Thanks, Rick Rule is always interesting to listen to.

Hopefully ALS can deploy significant capital in the near future.
Title: Re: ALS.TO - Altius Minerals
Post by: Eric50 on May 10, 2012, 11:15:24 AM
Brent Cook very bullish on Alderon (early in video)

http://watch.bnn.ca/wednesday#clip671139
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 15, 2012, 02:37:30 AM
http://mobius.blog.franklintempleton.com/2012/05/01/chinas-landing-pattern/#more-1424


Only Jim Rogers seems to be taking this point of view...Möbius a Sir John Templeton understudy is famous in the developing country investment world. This is a good piece on China...he is betting on consumers and commodities...with industrial infrasture build out as the reason...iron ore should do fine in this environment.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: alertmeipp on May 15, 2012, 07:01:19 PM
Buyback can start now
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on May 15, 2012, 07:49:48 PM
Looking to add.

Interesting article on "contraction" starting to be seen in China.

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9263196/World-edges-closer-to-deflationary-slump-as-money-contracts-in-China.html

Can t be good for iron + other commodity producers-in the short term- but I am betting that we will get inflation after a brief episode of some deflation- but who knows?

ALS seems to be in good shape either way-will do well with alderon iron deposit with inflation. Large cash on balance sheet could be put to work in deflationary time.

Will average in a bit with further price weakness in near future.
Title: Re: ALS.TO - Altius Minerals
Post by: roughlyright on May 15, 2012, 08:13:10 PM
Hello guys,

  I am already long on Altius for a while and added more today. Alderon now dropped to $2.47. Do you think Alderon provides a better margin of safety, because now we have a Chinese partner in place and the resource estimates look great? What do you think is a conservative value of Alderon?

Roughlyright
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 16, 2012, 06:03:07 AM
We like what is happening....tough on some to see the market price their ownership of shares at a lower rate...
We do not feel that way....oil falling helps the world...it brings down costs everywhere...we love to see iron ore fall to 100.... Because it will take high cost producers out of the market...remember we will not be producing for a couple of years...and a fall in commodities will be extremely helpful for input costs in building the mine at Alderon and Aurora. Alderon like Thompson Consolidated will go ahead regardless of what happens...remember Thompson went ahead in 2009!!!!! We have a $40 a ton cost...but the build out costs can be brought down significantly by a pull back in their input costs. The inflationary pressure in china and India....Europe is enormous...this will be a helpful pullback....we do not want china going full speed ahead now...we want to see it in 2 years when we are looking production. Alderon's partner is not looking at this year or next they are looking at the next decade...they have to...the money for the buildout is there.

The Biggest opportunity we see is that Altius buys significant amounts of shares back but more
importantly we get a chance to allocate capital and get a return.... An 80% return on $100m allocated similar to the IRC transaction....Royal Gold's biggest royalty is still Voisey Bay! These guys are similar to Leucadia they will not buy unless the get a 25 to 50 cent dollar and they have been extremely patient. We would like to see a return on our liquid capital....aaa and then the royalties...which will nirvana.

We think that Jeremy Grantham's thoughts have come true and this will be the opportunity of a life time to buy "things" because of the pull back...Leucadia agrees...and we have the best in the business "Altius" sitting on a mountain of cash waiting for it....Batter up here come the strikes down the middle of the plate.



Disclaimer...we have only added shares since we took a position several years ago...we are here for
the long haul.


Dazel.


It may not seem like it but Altius is perfectly positioned for this...as their management stated llast  August "bring on he blood bath"....they did not get the opportunity there but we are seeing commodity stocks get crushed right now....they have gotten what they hoped for.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 16, 2012, 06:17:47 AM
http://finance.yahoo.com/news/altius-announces-establishment-automatic-repurchase-120000481.html


This is great news....it allows them to do material events...ie negotiation on deals etc...and a third party broker will be able to buy shares....without knowledge of what is going on with deals.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on May 16, 2012, 07:28:29 AM
We like what is happening....tough on some to see the market price their ownership of shares at a lower rate...
We do not feel that way....oil falling helps the world...it brings down costs everywhere...we love to see iron ore fall to 100.... Because it will take high cost producers out of the market...remember we will not be producing for a couple of years...and a fall in commodities will be extremely helpful for input costs in building the mine at Alderon and Aurora. Alderon like Thompson Consolidated will go ahead regardless of what happens...remember Thompson went ahead in 2009!!!!! We have a $40 a ton cost...but the build out costs can be brought down significantly by a pull back in their input costs. The inflationary pressure in china and India....Europe is enormous...this will be a helpful pullback....we do not want china going full speed ahead now...we want to see it in 2 years when we are looking production. Alderon's partner is not looking at this year or next they are looking at the next decade...they have to...the money for the buildout is there

I like the way you think. Turmoil right now can indeed lower Alderon and Aurora's costs, remove competitors, and allow them to deploy capital.

Good news on the automatic repurchase plan. The end result should be that they will be able to buy back more than they otherwise could, so can't hurt.
Title: Re: ALS.TO - Altius Minerals
Post by: alertmeipp on May 16, 2012, 05:46:24 PM
hmm.. they stop buying since Jan and now setting this up. I wonder if they have material info going on.
Title: Re: ALS.TO - Altius Minerals
Post by: value-is-what-you-get on May 16, 2012, 06:41:37 PM
hmm.. they stop buying since Jan and now setting this up. I wonder if they have material info going on.

Is there any other plausible explanation for setting something like this up?  Sounds like something cooking to me
Title: Re: ALS.TO - Altius Minerals
Post by: alertmeipp on May 16, 2012, 06:59:16 PM
It sure looks like they are working on deals, Otherwise, why give out the control.
Title: Re: ALS.TO - Altius Minerals
Post by: bathtime on May 16, 2012, 07:12:47 PM
Does Altius have a new website? I don't remember it being such a nice design:

 http://www.altiusminerals.com/
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on May 16, 2012, 07:32:04 PM
Does Altius have a new website? I don't remember it being such a nice design:

 http://www.altiusminerals.com/

Must be pretty new, first time I see that design.
Title: Re: ALS.TO - Altius Minerals
Post by: JAllen on May 16, 2012, 07:33:22 PM
Why couldn't the auto-buyback be because the stock has gotten quite a bit cheaper recently?
Title: Re: ALS.TO - Altius Minerals
Post by: alertmeipp on May 16, 2012, 07:46:21 PM
Why couldn't the auto-buyback be because the stock has gotten quite a bit cheaper recently?

There was a buyback going on, they switch it to auto.
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on May 18, 2012, 03:52:12 PM
135$ Spot iron ore is still 15$ above the 120$ calculation for Alderon estimates.

BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 21, 2012, 07:44:08 PM

http://www.bloomberg.com/news/2012-05-22/china-leading-index-rose-0-8-in-april-same-as-march.html

More of the same.....but china is now looking at bumping up growth...they had the brakes on for quite awhile.....we are happy to stay right here...

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 30, 2012, 06:07:12 AM
http://finance.yahoo.com/news/alderon-signs-definitive-subscription-agreement-123000754.html

Title: Re: ALS.TO - Altius Minerals
Post by: value-is-what-you-get on May 30, 2012, 07:52:51 AM
What am I missing here - don't private placements normally get priced at around or a slight discount to market price?  Is it possible the largest steel producer in China and second largest in the world have their numbers wrong?   ;D
Title: Re: ALS.TO - Altius Minerals
Post by: bathtime on May 30, 2012, 10:50:41 AM
Interview with Alderon CEO by Grandich:

http://www.grandich.com/2012/05/grandich-client-alderon-iron-ore-4/

Regarding the Hebei investment, I don't understand the phrase, "if the stock price rose or fell between announcement of the deal and closing a contractual mechanism is in place to shift allocation as between the stock price and the project interest." That implies to me the terms can change, but then he proceeds to say the deal will go ahead as announced.

---
Q- The share price for Alderon has come off from the $3.42 close at the time of the Hebei announcement. Is there any risk the deal won’t close?

“ The real deal we have with Hebei is for C$194m for 19.9% of the corporate equity and 25% of the project. Our Chairman Mark Morabito was alive to the market volatility issue at the time the deal was being constructed and he convinced Hebei to agree to the C$194m price with the understanding that if the stock price rose or fell between announcement of the deal and closing, a contractual mechanism is in place to shift allocation as between the stock price and the project interest.  So, the short answer to your question is that market volatility was considered and factored into the negotiations and both sides are comfortable with the outcome. Look at today’s news release on Liberty Metals and Mining firming up their C$13m commitment alongside Hebei for $13M and you get a strong indication this deal is going ahead as originally announced.
---
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on May 30, 2012, 12:53:59 PM
What am I missing here - don't private placements normally get priced at around or a slight discount to market price?  Is it possible the largest steel producer in China and second largest in the world have their numbers wrong?   ;D

I'm not 100% sure, but I think Liberty group just got the same price as Hebei, which was exactly 3.42.
Title: Re: ALS.TO - Altius Minerals
Post by: bathtime on May 30, 2012, 01:09:45 PM
Interview with Alderon CEO by Grandich:

http://www.grandich.com/2012/05/grandich-client-alderon-iron-ore-4/

Regarding the Hebei investment, I don't understand the phrase, "if the stock price rose or fell between announcement of the deal and closing a contractual mechanism is in place to shift allocation as between the stock price and the project interest." That implies to me the terms can change, but then he proceeds to say the deal will go ahead as announced.

---
Q- The share price for Alderon has come off from the $3.42 close at the time of the Hebei announcement. Is there any risk the deal won’t close?

“ The real deal we have with Hebei is for C$194m for 19.9% of the corporate equity and 25% of the project. Our Chairman Mark Morabito was alive to the market volatility issue at the time the deal was being constructed and he convinced Hebei to agree to the C$194m price with the understanding that if the stock price rose or fell between announcement of the deal and closing, a contractual mechanism is in place to shift allocation as between the stock price and the project interest.  So, the short answer to your question is that market volatility was considered and factored into the negotiations and both sides are comfortable with the outcome. Look at today’s news release on Liberty Metals and Mining firming up their C$13m commitment alongside Hebei for $13M and you get a strong indication this deal is going ahead as originally announced.
---

After looking at this again, maybe what he's saying is that Hebei buys 19.9% of the equity, but gets not 19.9%, but 25% of the Kami project. So there's a built in discount to offset market volatility. Just a guess.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 30, 2012, 01:40:41 PM

I know the world is ending if you watch tv or read anything....but has anyone seen the price of iron ore rise for the third day in a row...we are sitting at $135 on large actual transaction volumes even though the world is ending!?

Imagine for second that china was not tanking, the euro imploding and the US ready to fall off the fiscal cliff?

The Alderon deal is a long term deal....the next step in the deal is feasibility study...then the money is paid...once these events happen it will not be $3.42.... It will be higher.

Title: Re: ALS.TO - Altius Minerals
Post by: bathtime on May 30, 2012, 04:00:21 PM
Alderon/Hebei subscription agreement attached. They needed the lawyers for this one, long document.

Article on Alderon's "all star" team in The Business Post:

http://www.thebusinesspost.ca/usr/main/docs/24/Vol6issue8.pdf
Title: Re: ALS.TO - Altius Minerals
Post by: LTVALUE on May 30, 2012, 04:01:05 PM
I have been following this forum for some time.  Great posts!

Altius has posted a presentation by Brian Dalton in Europe

http://altiusminerals.com/uploads/europe-2012-website.pdf (http://altiusminerals.com/uploads/europe-2012-website.pdf)

Slide 4: Pending agreement on Snelgrove Lake and a significant exploration alliance in Quebec anticipated

Cheers!!
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on May 30, 2012, 04:16:33 PM
I have been following this forum for some time.  Great posts!

Altius has posted a presentation by Brian Dalton in Europe

http://altiusminerals.com/uploads/europe-2012-website.pdf (http://altiusminerals.com/uploads/europe-2012-website.pdf)

Slide 4: Pending agreement on Snelgrove Lake and a significant exploration alliance in Quebec anticipated

Cheers!!

Welcome to the board, thanks for posting the presentation!   :)
Title: Re: ALS.TO - Altius Minerals
Post by: bathtime on May 30, 2012, 04:18:08 PM
Thanks for linking to that new presentation.

I noticed cash has gone from $173m as of 1/31/12 (per the last quarterly report) to $162m in the new Europe presentation. Any thoughts on what accounts for the reduction in cash?
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on May 31, 2012, 06:25:05 AM


Very much hoping they are accumulating an investment for the fall in cash....they do not need to spend otherwise....Voisey bay royalty has been good as per royal gold's share of the royalty distribution this quarter...around $4m annualized.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: naboo on May 31, 2012, 01:20:33 PM
Alderon/Hebei subscription agreement attached. They needed the lawyers for this one, long document.

Article on Alderon's "all star" team in The Business Post:

http://www.thebusinesspost.ca/usr/main/docs/24/Vol6issue8.pdf


The agreement is subject to approval, so it is not a done deal.  Any chance that could be cancelled?
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on June 01, 2012, 05:54:18 AM
Thanks for linking to that new presentation.

I noticed cash has gone from $173m as of 1/31/12 (per the last quarterly report) to $162m in the new Europe presentation. Any thoughts on what accounts for the reduction in cash?

Share repurchase? (less shares outstanding)
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 01, 2012, 07:10:35 AM


Naboo,


It could be cancelled.....we looked at this another way recently....why would Rio Tinto not come  in and buy out the whole thing at these prices? I mean really.

Buy out a
Altius at 50% premium...you get a majority stake in Alderon...basically for free because of their cash and Alderon shares....then you only need to pay another $50 m to control Alderon...

You get all of Altius projects including the one you know best which you are partnering with them now....and you become the largest land holder of iron ore properties in Labrador! They have been doing business there for over 50 years why not...it is basically free.

We do not want this to happen because it will undervalue the assets...but this is what businesses do....

So Naboo....this is also a possibility at these ridiculous prices....so there is risk to both sides in a deal not being fully completed.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 01, 2012, 07:42:20 AM


Iron ore prices up again today.

China stock market up everyday this week....this is very different then the last year and half where china was tightening....they are up over 12% this year....the market is looking ahead as it punished them while they tightened...they were down big last year....as were all commodities.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: alertmeipp on June 01, 2012, 06:19:58 PM
Dazel,

Are the cash in USD or CDN?  8)
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on June 02, 2012, 09:30:40 AM
http://www.bloomberg.com/news/2012-05-31/mittal-price-squeeze-in-960-billion-steelmaking-industry.html

This was posted in the posco thread but it contains a lot that it interesting about iron ore producers.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 04, 2012, 06:47:48 AM


Cash is mostly cdn government paper....last I checked.

Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 04, 2012, 06:49:08 AM
http://www.reuters.com/article/2012/06/03/canada-column-markets-idUSL1E8GH3S020120603?feedType=RSS&feedName=financialsSector&rpc=43


I would think that Altius is busy here as well..

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: shoeless on June 04, 2012, 03:54:48 PM
Some discussion of iron-ore, Fortescue and mention of Alderon:
http://brontecapital.blogspot.co.il/2012/06/how-business-decisions-are-made-in-boom.html
Probably belongs in the LUK thread but iron ore seems to be mentioned here more often
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on June 04, 2012, 04:13:56 PM
Some discussion of iron-ore, Fortescue and mention of Alderon:
http://brontecapital.blogspot.co.il/2012/06/how-business-decisions-are-made-in-boom.html
Probably belongs in the LUK thread but iron ore seems to be mentioned here more often

There sure is no love for ADV in there. Thanks for posting, good to hear some contrary opinion even if I can't say I'm very convinced by what they say.
Title: Re: ALS.TO - Altius Minerals
Post by: value-is-what-you-get on June 04, 2012, 04:48:40 PM
$110 iron ore prices may make Alderon borderline viable??  I wish he'd made that statement in the beginning so I couldve stopped reading sooner!
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 04, 2012, 06:29:56 PM

Really John Hempton from Bronte Capital! He helped us out big time in Fairfax with his absolute  nonsense his short friends gang got killed shorting Fairfax and are still being sued....i have noticed interesting trading patterns in the illiquid axx shares....looks like John and his gang are up to their old tricks...we will let management know who they are dealing with.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 04, 2012, 07:13:23 PM

Please look up the threads on John Hempton and Bronte capital...for those on this thread who do not know him or what he has been doing for the last decade have a look....he is the biggest slim ball around.

Shoeless thank you very much for the post....it is likely that he and his gang are up to their old naked short tricks.....the biggest clue is the cdn and u.s exchange....as you will remember Fairfax left the NYSE after the dust settled with their fight against naked shorting.


Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on June 05, 2012, 06:40:54 AM
New release by ADV: http://www.alderonironore.com/_resources/news/ADVNR20120605.pdf
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 05, 2012, 07:41:05 AM


Liberty,


I agree...the longer term...brings Great gains when shorts are wrong...I do not want to sound off the alarm bells...

Those that were around for The Fairfax debacle say some crazy shit! The good news is that many fortunes were made on this board.

If investors are prepared for a short attack they will do well...they have to understand the assets they own...however....as was the case with Fairfax when a $1.3 b company dropped 45% in minutes...it tests your metal.
The good thing is that Fairfax is now worth over $8b

Dazel
Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 05, 2012, 08:13:34 AM
http://finance.yahoo.com/news/long-term-uranium-prices-first-122000659.html


The long term uranium price has risen for the first time since Jan 2011....Japan has looked to restart their nuclear program and china has given the go ahead for their program....

Slowly but surely...this is a big deal to Altius' future.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on June 05, 2012, 08:54:02 AM


Liberty,


I agree...the longer term...brings Great gains when shorts are wrong...I do not want to sound off the alarm bells...

Those that were around for The Fairfax debacle say some crazy shit! The good news is that many fortunes were made on this board.

If investors are prepared for a short attack they will do well...they have to understand the assets they own...however....as was the case with Fairfax when a $1.3 b company dropped 45% in minutes...it tests your metal.
The good thing is that Fairfax is now worth over $8b

Dazel
Dazel

Hey Dazel,

I totally agree. I might not have been around when Fairfax went through this, but I own a lot of EBIX and I've seen what unscrupulous shorts can do to manipulate a stock. Still, I feel that they are wrong and that in the end they'll have permitted me to buy into a great business at a very low price..
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on June 07, 2012, 06:20:27 AM
As expected, more buybacks are underway:

http://www.canadianinsider.com/node/7?ticker=ALS

ADV up over 9% right now. Guess it's China's announcement.
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on June 07, 2012, 07:20:31 AM
Glad to see the buybacks have finally kicked in.  I assumed that was what was supporting Altius at 10, but was getting a little worried cause I hadnt seen any filings in a while.  I started looking at cliffs cause it seems pretty cheap and came across this thread (click on expanded view) on the yahoo forums where some employee at the mine is talking about some of their cost overruns and operating issues.  I hope Alderon management is paying close attention to this so they can avoid making similar mistakes...

http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_C/threadview?m=te&bn=3756&tid=64790&mid=64790&tof=4&frt=2#64790
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on June 07, 2012, 07:31:30 AM
Also, pulled this link off the stockhouse forum.  Interesting discussion of power needs in the area:

http://www.nl.dailybusinessbuzz.ca/Provincial-News/2012-06-07/article-3002164/NL%3A-Mining-industry-needs-Muskrat-Falls,-says-Alderon-chairman/1
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on June 08, 2012, 07:10:18 AM
Also, pulled this link off the stockhouse forum.  Interesting discussion of power needs in the area:

http://www.nl.dailybusinessbuzz.ca/Provincial-News/2012-06-07/article-3002164/NL%3A-Mining-industry-needs-Muskrat-Falls,-says-Alderon-chairman/1

Interesting. At least it seems like they always have the option of getting their power from the Quebec side.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 10, 2012, 04:42:57 PM
http://online.wsj.com/article/SB10001424052702303768104577458003116697104.html?mod=googlenews_wsj


Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 11, 2012, 03:18:49 AM
http://canadianinsider.com/node/7?ticker=ADV


Danny Williams is picking up some cheap Alderon shares!

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on June 12, 2012, 06:18:28 PM
http://www.marketwatch.com/story/millrock-and-vale-enter-option-agreement-concerning-the-audn-copper-gold-porphyry-project-alaska-2012-06-11-9173323

Quote
Millrock Resources Inc. CA:MRO +11.90%  ("Millrock" or the "Company") announced today that it has entered into an option agreement with Vale Exploration USA, Inc., a wholly-owned subsidiary of Vale S.A. ("Vale"). The agreement is being entered pursuant to the strategic alliance agreement between Vale Exploration Canada Inc, a wholly-owned subsidiary of Vale S.A. and Millrock made October 11, 2011 (see press release dated October 17, 2011: http://millrockresources.com/news/millrock_and_vale_form_strategic_alliance_for_copper-gold_porphyry_dep/ ). The objective of the alliance is to discover large-scale copper - gold porphyry deposits in target zones of Alaska identified by Millrock. This is the first "Designated Project" under the strategic alliance agreement.

The subject of the new option agreement is the AUDN project, a promising porphyry copper-gold target situated approximately 100 km southwest of the world-class Pebble deposit. The Millrock claim block is situated along a trend of porphyry occurrences. Aeromagnetic, gravity and radiometric potassium survey data indicate possible buried, mineralized intrusions within the AUDN project area. Millrock and Vale plan to carry out geophysical and geochemical surveys in 2012.

Under the terms of the option agreement, Vale may earn a 65% interest by expending US$3.5 million for exploration on the project over a three-year period and by paying Millrock US$200,000. Upon earning its initial interest, Vale may elect to carry the full cost of further exploration and development until a feasibility study has been completed, and thereby earn an additional 10% interest, for a total 75% joint venture interest. Further development of the project would proceed with the parties contributing on a pro-rata basis. In the event that a joint venture party dilutes below a 10% interest, such interest would convert to a Net Smelter Returns royalty of 2% on gold, silver, platinum, palladium and rhodium and 1% on all other metals.

Under the terms of the strategic alliance agreement, Vale is providing funding to Millrock for research and early-stage exploration to identify targets that may be nominated for Designated Project status. The work is focused on specific, defined areas of interest in the Alaska Range and Alaska Peninsula porphyry belts. Strategic Alliance funding consists of a minimum US$1.0 million in the first year, and a further US$1.0 million at Vale's option in the second year. Funding for the strategic alliance may continue in subsequent years at funding levels to be determined between the parties.

Initial investigations carried out by Millrock in 2010 were done with funding that Millrock received under a separate strategic alliance with Altius Minerals Corporation CA:ALS +1.04%  ("Altius"). By virtue of that agreement Altius is entitled to a royalty on any mineral production that occurs from most of the claims comprising the AUDN project.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on June 13, 2012, 04:37:43 PM
http://www.grandich.com/2012/06/grandich-client-alderon-iron-ore-5/

At the end of the post there is:

Quote
Special Offer – To the party or parties who advocated shorting ADV, I like to make this offer to you; I will wager $100,000 that ADV makes a new, all-time high above $4 without ever going under $1 (That’s $1.78 higher from here versus just $1.22 below). If I win, you donate $100k to my favorite charity (http://www.fealgoodfoundation.com/) and if you win, I’ll donate $100k to yours). You know where to reach me if you’re interested.

Wonder if someone will take him up on that.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on June 13, 2012, 06:59:04 PM
I like quote in article: “those of us that live by the crystal ball overtime learn to eat a lot of broken glass.”
Title: Re: ALS.TO - Altius Minerals
Post by: moore_capital54 on June 13, 2012, 07:25:56 PM
 I thought I would share this with you folks interested in the Canadian iron ore market, one of the better graphics I've seen on the Labrador Trough:

http://www.visualcapitalist.com/wp-content/uploads/2012/05/LabradorTrough_Final.jpg
Title: Re: ALS.TO - Altius Minerals
Post by: cwericb on June 14, 2012, 05:46:07 AM
Thanks for sharing that Moore, it is quite informative. I don't know who did the graphics for that but it is pretty impressive in how it puts things in perspective, especially the Kami project.
Title: Re: ALS.TO - Altius Minerals
Post by: MrB on June 16, 2012, 08:44:14 AM
Wonder if Cundill would ever have invested in Altius?

What was your best investment ever? One of the best investments I have ever made was Cleveland-Cliffs Inc., on the face of it a boring old iron ore company based in Cleveland that specialized in producing iron ore pellets. In the ’80s, Cliffs had 40% of the pellet market in North America, but in a stock market environment where everyone was focusing on growth stocks, the share price more than halved. No one cared that it had what I like to call extra assets in the form of a power plant in Michigan, which was held at a very low value on the balance sheet. I bought and bought as the price went on dropping, and there seemed to be an endless supply of stock. Finally it ran out and the bull market of ’86-’87 carried Cliffs to levels where I was able to sell a good deal of the position at a substantial profit. The icing on the cake was the crash of October ’87 that allowed me to buy back all I’d sold plus a bit and do it all over again.
http://www.theglobeandmail.com/report-on-business/rob-magazine/an-interview-with-peter-cundill/article566267/
Title: Re: ALS.TO - Altius Minerals
Post by: JAllen on June 16, 2012, 11:07:47 AM
I studied some of Berkshire's late 70s investments a while ago to see what he was up to then.

Turns out Buffett owned Cleveland-Cliffs then as well: http://www.berkshirehathaway.com/letters/1980.html
Title: Re: ALS.TO - Altius Minerals
Post by: PlanMaestro on June 16, 2012, 11:51:53 AM
I studied some of Berkshire's late 70s investments a while ago to see what he was up to then.

Turns out Buffett owned Cleveland-Cliffs then as well: http://www.berkshirehathaway.com/letters/1980.html

Sorry for the departure, but what happened to Woolworth as an investment? They tried to reinvent themselves into the discount stores (Woolco) but they failed (Innovators Dilemma, Christensen). Thinking about all these retailers RSH, SVU, OMX, BBY, JCP, SHLD, that I am avoiding for the moment. Also wondering why Buffett/Munger tried retail again after the bad experience with department stores in the 60s.

A short answer would suffice.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 21, 2012, 07:05:45 AM
http://www.mineweb.com/mineweb/view/mineweb/en/page504?oid=153722&sn=Detail&pid=102055


Iron ore up....bucking the tread.

Title: Re: ALS.TO - Altius Minerals
Post by: naboo on June 26, 2012, 03:15:22 PM
ADV June 2012 presentation: 

http://alderonironore.com/_resources/presentations/ADV_PPT.pdf


Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 27, 2012, 07:09:18 AM
http://altiusminerals.com/uploads/April-2012-MDA-ver-7.pdf


As expected...the loss was from their $6.7 m share of the loss from Alderon. We would like to see the $2.7m in interest from their treasury holdings become much higher from buying something in this environment...just to add to the upside of what is there. We are really excited at the prospect of a another international royalty like purchase in this environment.

Near term Alderon continues to be a catalyst....when the feasibility study is done and the cash from their Hebei and Liberty partnership is in the treasury Alderon will rise significantly.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 27, 2012, 08:05:24 AM

Altius looks like a sitting duck.

With the industry cash strapped and bargains abound....buying out Altius at these prices makes sense. As we stated above we think Altius has a tremendous opportunity to deploy cash in this environment. However, with tight financing markets it would make sense for someone to be stalking Altius. We have written a great deal about the value in Altius. But In these times cash is "king".

Royal Gold-case study for buying
They get a 46 pe....their largest royalty is Voisey Bay....An Altius purchase is worth $4m x20% tax=$3.2m X 46= $147.2m value to Royal Gold's Mkt value.

The cash and marketable securities become the equivalent of a capital raise at $77...which is $6 off their 52 week high....so they reload with cheap cash available for other acquisitions in this environment...this of course is assuming that they use their shares to purchase Altius.

For free they get the other royalty portfolio....The $30m from Alderon future royalty at a low low 20 pe (less than half their multiple) would be worth $600m in market cap to Royal Gold....and when production hits 16mt it would be worth $1.2b to Royal gold.

The economics are riducluous to other Royalty companies....we would be completey surprised if they were not being approached as royalty mulitples are so high elsewhere in the market...and Altius large cash equivalents make them a sitting duck.

Dazel.

Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on June 27, 2012, 09:02:06 AM

Altius looks like a sitting duck.

With the industry cash strapped and bargains abound....buying out Altius at these prices makes sense. As we stated above we think Altius has a tremendous opportunity to deploy cash in this environment. However, with tight financing markets it would make sense for someone to be stalking Altius. We have written a great deal about the value in Altius. But In these times cash is "king".

Royal Gold-case study for buying
They get a 46 pe....their largest royalty is Voisey Bay....An Altius purchase is worth $4m x20% tax=$3.2m X 46= $147.2m value to Royal Gold's Mkt value.

The cash and marketable securities become the equivalent of a capital raise at $77...which is $6 off their 52 week high....so they reload with cheap cash available for other acquisitions in this environment...this of course is assuming that they use their shares to purchase Altius.

For free they get the other royalty portfolio....The $30m from Alderon future royalty at a low low 20 pe (less than half their multiple) would be worth $600m in market cap to Royal Gold....and when production hits 16mt it would be worth $1.2b to Royal gold.

The economics are riducluous to other Royalty companies....we would be completey surprised if they were not being approached as royalty mulitples are so high elsewhere in the market...and Altius large cash equivalents make them a sitting duck.

Dazel.

I certainly see how that would be a good deal for a royalty company, but I hope that's not how it plays out. Even at a decent premium, it would still feel like my shares were stolen.. I'd much rather see the team keep allocating capital and reap the full rewards from Alderon/Aurora/etc over the years, rather than see this great team diluted into a bigger company. Hopefully they are under the radar and can stay independent.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 27, 2012, 10:09:57 AM

Liberty,

We agree but the selling we are seeing would make a 50 to 60% premium likely be taken by shareholders. Like you we think that is stealing the shares...but that is why we think they are in play...if you look at the Royal Gold numbers....they would be stupid not to consider it.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: rmitz on June 27, 2012, 11:14:47 AM

Liberty,

We agree but the selling we are seeing would make a 50 to 60% premium likely be taken by shareholders. Like you we think that is stealing the shares...but that is why we think they are in play...if you look at the Royal Gold numbers....they would be stupid not to consider it.

Dazel.

It's also something they've done before... http://www.fasken.com/international-royalty-valued-at-700-million-in-arrangement-agreement-with-royal-gold/
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 27, 2012, 12:51:07 PM


Royal Gold bought International Royalty...Altius was the key investor in that negotiation...with a 10 % stake in irc...they know each other well...
Brian Dalton could certainly run that company.
Dazel.
Title: Re: ALS.TO - Altius Minerals - Dazel
Post by: GlennAS on June 27, 2012, 05:08:45 PM
Hi Dazel. Long-time lurker but my first post on this forum.

You stated, "With the industry cash strapped and bargains abound....buying out Altius at these prices makes sense" and "We agree but the selling we are seeing would make a 50 to 60% premium likely be taken by shareholders ... Like you we think that is stealing the shares...but that is why we think they are in play."

This doesn't make a lot of sense to me. First of all, doesn't Brian Dalton and team have a nack for buying undervalued assets and selling them at the top of a cycle? To sell out to Royal Gold or any other entity under current market conditions, at such depressed valuation - particularly with the upside of Alderon (equity and future royalties), Aurora, cash on the balance sheet, etc. - just doesn't make sense to me. It would be very contrary to their modus operadi IMO.

Definitely it makes sense from Royal Gold's perspective.

Do you really think Altius shareholders would be happy with a 50-60% premium to current market prices? I know you're a large shareholder so maybe you could speak for large shareholders more than I could. But the only reason a large shareholder IMO would be happy getting a 50-60% premium for Altius at current prices if they needed the liquidity. However, it seems to me that Altius shares are largely owned by patient, long-term capital. So I'd be surprised if immediately liquidity was a sufficient rationale.

BTW, how tight is the ownership structure of Altius? Altius has issued so few shares beyond its initial IPO that I would suspect that the stock is fairly tightly held.

Finally, as a long-term lurker, thank you for your informed posts over the months/years. I've learned a great deal about the company from your posts.

Regards,
glenn
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on June 27, 2012, 06:10:51 PM
Glenn,

What in play means to us is an unsolicited bid...we agree with all that Altius is in the sweet spot..we also agree that 50 to 60 % is low....however, if you have a hedge fund come in that has a low average cost 50 to 60% return is pretty damn good.

Remember Altius did the exact same thing to Irc shareholders...they wanted a deal and got it done they owned 10% of IRC and made 80%... had they held they would have made a lot more...but they wanted the money...

We are not saying that the same thing will happen here but the shares are so undervalued that we could see the same scenario playing out. We only used Royal Gold as an example of what Altius assets are worth to someone else....the market does not see this..but other royalty companies will as Altius did with International Royalty Corp.

We do not see management happy with any of what we have said....but we are in a market and undervalued Assets draw the attention of other businesses....that is all I am saying...it can only go on so long before someone realizes it would cost more than double and many years to re create it...when it can be bought over a couple of phone calls.



Dazel.

Dazel
Title: Re: ALS.TO - Altius Minerals - Dazel
Post by: GlennAS on June 27, 2012, 06:37:15 PM
Aah. Thanks for the clarification re: "in play".

A quick follow-up. Do you know how tightly held the stock is? Does Dalton and team have enough support from a majority of shareholders in your opinion to block an unfriendly takeover attempt?

TIA.

glenn
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on June 27, 2012, 06:46:42 PM
One thing I find strange is that we haven't gotten reports that Altius has been buying back shares in a while. The last time they did, last year (iirc), they filed every few days and it popped up on CanadianInsider. But lately, nothing, despite them putting the buybacks in third party hands to avoid conflicts with material info.

I hope they are buying as much as possible and we're just not seeing the reports filed as quickly as before...
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on June 27, 2012, 07:48:59 PM
Anybody considering Alderon shares for arbitrage? Soon the Hebei money will come trough at 3.42$/shares, each of these dollars will be added in the treasury of Alderon. So if each of the 100M shares are currently worth 2.23$ and Hebei adds another 25M shares at 3.42$/share that bring the value of Alderon to (100*2.23 + 25*3.42)/125=2.46$.

A nice 10% arbitrage yield.

BeerBaron

Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on June 27, 2012, 08:00:56 PM
One thing I find strange is that we haven't gotten reports that Altius has been buying back shares in a while. The last time they did, last year (iirc), they filed every few days and it popped up on CanadianInsider. But lately, nothing, despite them putting the buybacks in third party hands to avoid conflicts with material info.

I hope they are buying as much as possible and we're just not seeing the reports filed as quickly as before...

Have wondered that myself especially with recent price weakness.

Because a 3rd party is purchasing would it show up in Canadian insider
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on June 27, 2012, 08:31:04 PM
Have wondered that myself especially with recent price weakness.

Because a 3rd party is purchasing would it show up in Canadian insider

There's one showing for June 12:

http://canadianinsider.com/node/7?menu_tickersearch=als

I would assume they still have to file even if it's a third party, since it's still for them, even if indirectly. But I don't know the specifics of those regulations. If anyone knows, I'd love to learn how this works.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on July 04, 2012, 10:45:06 AM
http://altiusminerals.com/press-releases/view/261

Quote
ALTIUS MINERALS CORPORATION (TSX:ALS) ANNOUNCES STRATEGIC ALLIANCE WITH VIRGINIA MINES INC. Altius and Virginia to jointly undertake grass roots exploration in Quebec and Labrador

St. John’s - Altius Minerals Corporation (“Altius”) is pleased to announce that it has signed a Memorandum of Understanding (“MOU”) with Virginia Mines Inc. (TSX:VGQ) ("Virginia") whereby Altius and Virginia will cooperate to explore for base metals and precious metals on the North Shore area of Quebec and in southern Labrador .

This strategic alliance merges two project generation teams that have exhibited excellent track records of exploration success and also in attracting strong partners to their respective home jurisdictions in eastern Canada. Altius and Virginia will share their collective experience and databases, co-fund early stage exploration programs, and jointly seek partners for any new projects that are created in eastern Quebec and southern Labrador. Target evaluation is underway and an initial reconnaissance field campaign is being planned for the upcoming field season. Altius will be the operator during the first year.
Title: Re: ALS.TO - Altius Minerals
Post by: bathtime on July 04, 2012, 05:55:09 PM
The Virginia Mines version of the PR gives a dollar figure on the budget for the strategic alliance - $600k for 2012.
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on July 06, 2012, 06:17:01 AM
more buybacks:

http://canadianinsider.com/node/7?menu_tickersearch=als
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on July 06, 2012, 06:44:37 AM
more buybacks:

http://canadianinsider.com/node/7?menu_tickersearch=als

It looks like they are now reporting them once a month because of their new third party setup.
Title: Re: ALS.TO - Altius Minerals
Post by: bathtime on July 06, 2012, 11:10:32 AM
Fraser Mackensie Metals & Mines comment June 26, 2012

Alderon Iron Ore (TSX:ADV): Analysing the Impact of a Re-priced Hebei Deal – Still a Compelling Investment

http://www.grandich.com/2012/06/grandich-client-alderon-iron-ore-6/
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on July 06, 2012, 03:01:40 PM
Anybody knows when the Hebei money is suppose to come trough?

BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: bathtime on July 06, 2012, 05:21:07 PM
I think the 90-day timeline for Chinese government approval comes around July 15. My reading of the PR is that if there is no government approval by then, Alderon can do a deal with someone else by paying a penalty fee, but I assume Alderon wants to proceed with Hebei even if approval is delayed.
Title: Re: ALS.TO - Altius Minerals
Post by: LTVALUE on July 08, 2012, 05:46:35 PM
Alderon off-take partner Hebei Steel gets Chinese government approval


http://in.reuters.com/article/2012/07/08/hebei-invest-idINL3E8I800X20120708 (http://in.reuters.com/article/2012/07/08/hebei-invest-idINL3E8I800X20120708)
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on July 08, 2012, 06:01:32 PM
Alderon off-take partner Hebei Steel gets Chinese government approval


http://in.reuters.com/article/2012/07/08/hebei-invest-idINL3E8I800X20120708 (http://in.reuters.com/article/2012/07/08/hebei-invest-idINL3E8I800X20120708)

Thanks, that's good news!
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 09, 2012, 05:01:55 AM


The last line is the most important..."China has urged steel producers to source at least half of their production from chinese owned or Chinese projects"

The Chinese government will be subsidizing these steel companies to help that goal above...look for Kami to be fast tracked after the bankable feasibility study is released and the other Altius projects to get more interest from the Chinese....

The other forgotten factor is that china is going full speed ahead on their nuclear program...the stimulus  they will create are for large infrastructure projects...nuclear, rail etc....not housing.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 09, 2012, 05:15:27 AM


The Kami project development costs have dropped significantly in the last 6 months...while iron ore prices while coming down have remained at hugely profitable levels for Kami's economics...we see this team racing to production to take advantage of some of these costs savings for development...
At a cost per ton of below $50 make Kami very very profitable even if iron ore prices were to drop significantly more.

What investors are missing is that china has been in tightening mode for a long time....now they are stimulus focused....with trillions in foreign reserves to secure long term security of their resource needs...Kami et all fit perfectly in their plan

Dazel.


Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 09, 2012, 07:47:00 AM

Hebei iron ore could have used the Chinese approval as a tactic to negotiate with Alderon as we know they have pull with the government....a delay in approval would have done it...late paperwork or whatever.

It shows their commitment to the Kami project and they are likely as eager as Alderon to get to work...and reap the huge benefits of the economics...
At these levels it will be a home run investment for Hebei iron ore and everyone else involved. We expect the bankable feasibility study soon which triggers the money transfer.

After that the project will get great interest from the investment houses because over the next few years they will raise a great deal of debt financing....the investment houses will have to compete fro this financing as Hebei iron ore is huge and has the variability of cheap financing from china....today is a big step.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on July 09, 2012, 08:04:54 AM
Dazel, I was thinking along similar lines. If Hebei had wanted to reprice the deal or squeeze the lemon more, they probably would have done it before government approval.

But the Alderon people aren't patsies, they probably have made it clear to Hebei that if they didn't want the deal, they had other suitors waiting in the wings. So chances are that as much pressure as Hebei can put on Alderon, ADV can dish it back to them, which is why they got the deal they got.

Just speculation, but it sounds likely based on comments from the ADV CEO a few months ago (something along the lines of: "we could get a deal right now if we wanted to, but we're waiting for the right deal").
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 09, 2012, 10:13:05 AM


Make no mistake we are speculating when we are saying that Hebei even considered anything to do with the terms of the deal...it is more likely they are pleased with being part of the tremendous opportunity in front of them as partners with Alderon...they stand to make a lot of money.

dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 09, 2012, 10:23:54 AM

one more thing....

Hebei iron ore is massive....this is not a large deal for them capital wise...but a great return on capital and securing iron ore for the future...gives them negotiating power over the big boys..it is a good strategy as Wisco found out with Thompson Considated.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 11, 2012, 03:35:35 AM
http://www.bloomberg.com/news/2012-07-10/billionaire-forrest-leads-blackrock-buying-iron-ore-commodities.html?cmpid=yhoo

We like to see investors putting their money where their mouth is...not talking the talk on a day trade on cnbc...

We are also happy to see Altius is doing the same by buying back shares in this environment.

A side note...has anyone else seen the release that new homes sale prices rose for the first time in 10 months in June in China.. I haven't.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on July 11, 2012, 07:25:51 AM
Quote
Alderon Iron Ore Corp. (TSX: ADV) (NYSE MKT: AXX) ("Alderon" or the “Company”) is  pleased to announce the results of the final mineral resource estimate on its Kamistiatusset (“Kami”) Iron Ore Project in western Labrador.  The estimate includes a Measured and Indicated mineral resource of 1.1 billion tonnes at 29.8% iron and an Inferred mineral resource of 277.4 million tonnes at 29.5% iron (refer to tables below for tonnage and grade details) based on a cut-off grade of 20% iron. 

“We are extremely pleased with this final resource estimate for Kami,” says Tayfun Eldem, President and CEO of Alderon.  “The completion of each successive drill program has resulted in an increase in the mineral resource estimate, while continuing to confirm consistent grades. The final numbers clearly underline the potential and the value of the Kami Project.  The Measured and Indicated mineral resources will form the basis for Kami’s Feasibility Study that is expected to be completed before the end of this year."

http://www.alderonironore.com/_resources/news/2012-07-11-NewsRelease.pdf
Title: Re: ALS.TO - Altius Minerals
Post by: value-is-what-you-get on July 13, 2012, 07:16:53 AM
Danny Williams is suing a guy from the Sierra Club for defamation over the proposed Muskrat Falls power dam.

Here's a remarkable little quote from the Winnipeg Free Press from the statement of claim:

"The plaintiffs are not party to or involved with Altius in respect to the financing of Muskrat Falls by way of a royalty trust proposal or agreement or otherwise; and are not hiding such proposal or agreement from the citizens of Newfoundland and Labrador;

"The plaintiffs are not party to or involved with the alleged royalty trust and will not personally gain from such a proposal or agreement."

Is Altius in the process of securing a royalty stream from the power all of the producers in the area will be using?  If so, that's sharp!
Title: Re: ALS.TO - Altius Minerals
Post by: Green King on July 13, 2012, 08:23:41 AM
i think there was a link to blog post a while back on this thread about that.
Title: Re: ALS.TO - Altius Minerals
Post by: value-is-what-you-get on July 13, 2012, 09:01:58 AM
i think there was a link to blog post a while back on this thread about that.
Yes I remember a blog post saying Alderon could only expand output to 16 million tonnes if the dam was built and that it wa no sure thing that it would, but this is the first I'd heard of Altius possibly securing a royalty on the power dam output.  Maybe Im reading this wrong but thats what it looks like to me.
Title: Re: ALS.TO - Altius Minerals
Post by: Green King on July 13, 2012, 09:28:04 AM
i think there was a link to blog post a while back on this thread about that.
Yes I remember a blog post saying Alderon could only expand output to 16 million tonnes if the dam was built and that it wa no sure thing that it would, but this is the first I'd heard of Altius possibly securing a royalty on the power dam output.  Maybe Im reading this wrong but thats what it looks like to me.

it seems the blog we were talking about it and is getting sued are the same.
http://rocksolidpolitics.blogspot.ca/
http://www.winnipegfreepress.com/canada/former-premier-danny-williams-sues-muskrat-falls-critics-for-alleged-defamation-162228675.html
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on July 13, 2012, 12:47:54 PM
How can Altius buy a royalty on a 6B$ hydro project ? That is a huge cow for such a small company.

BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 14, 2012, 12:19:04 PM
Altius has had this in the works for a long time...they would create a royalty trust and raise money for the royalty trust that would then buy future power income stream from the Lower Churchill power project. The same way that a mining royalty is set up. They would put up some capital but the majority would come from outside parties to raise money for the project they would become shareholders in the royalty trust that would get it's income from the future revenue from the project. The government looked at it as a unique way to let the people have a chance to participate in profit sharing for the project while raising money that would not require the province to issue debt.



Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 14, 2012, 12:27:44 PM


Liberty,

The Alderon release was expected of course which is good news...however, the better news is how quickly it was done...The feasibility study is the next major milestone...that brings the financing cash and they are off to the production races...the speed at which things are done now are the key. They said the feasibility study will be out before yearend...but I would expect it by  quarters end. Once that is done...look out.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: hohi on July 14, 2012, 01:21:30 PM
Hey guys!

I am new to this board - although I was reading as a guest for some month now. I finally decided to join your greatly appreciated discussion!

Personally I love ALS and am very comfortable that it represents about 12% of my portfolio right now. In fact I am planning to accumulate more as these price levels represent a great opportunity to buy quality with upside (I estimate fair value at about 21$ / share) and very, very limited downside.

Doing my DD I created a Fact Sheet (A3-format) which I updated today. So as my first contribution to this board I uploaded it and maybe someone of you will find some value in it. I would love to hear some corrections or some missing facts that are important.

Anyway here is the link
http://ihre-hoheit.de/2012_07_13_DD_ALS_%28A3%29.pdf

Best regards from germany,
hohi
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on July 15, 2012, 02:41:53 PM
Hey guys!

I am new to this board - although I was reading as a guest for some month now. I finally decided to join your greatly appreciated discussion!

Personally I love ALS and am very comfortable that it represents about 12% of my portfolio right now. In fact I am planning to accumulate more as these price levels represent a great opportunity to buy quality with upside (I estimate fair value at about 21$ / share) and very, very limited downside.

Doing my DD I created a Fact Sheet (A3-format) which I updated today. So as my first contribution to this board I uploaded it and maybe someone of you will find some value in it. I would love to hear some corrections or some missing facts that are important.

Anyway here is the link
http://ihre-hoheit.de/2012_07_13_DD_ALS_%28A3%29.pdf

Best regards from germany,
hohi

Lots of work in there! Thanks it's a great 1 pager.

BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on July 16, 2012, 06:22:10 AM
http://www.alderonironore.com/_resources/news/2012-07-16-NewsRelease.pdf

Quote
Alderon Iron Ore Corp. (TSX: ADV) (NYSE MKT: AXX) ("Alderon" or the “Company”) is pleased to
announce that it has signed an agreement (the “Port Agreement”) with the Sept-Îles Port Authority (the
“Port”) to ship up to 8 million metric tonnes of iron ore annually via the new multi-user deep water dock
facility that the Port is constructing (see Alderon press release dated February 14, 2012).

“We are extremely pleased to have concluded this port agreement, which represents another significant
milestone in the development of our Kami Iron Ore Project,” says Tayfun Eldem, President and CEO of
Alderon. “This agreement provides Alderon with confirmed access to the international iron ore markets
and substantially de-risks the Kami Project.”

Port Agreement Details

Pursuant to the Port Agreement, Alderon has reserved an annual capacity of 8 million metric tonnes of
iron ore that it can ship through the Port. In order to finance the estimated $220 million cost of the new
multi-user dock facility, the Port required binding commitments from the potential end-users to provide a
portion of the necessary funds. This buy-in payment will constitute an advance on  Alderon’s future
shipping fees (wharfage and equipment fees) and, as a result, Alderon will receive a discount on its
shipping fees until the full amount of the buy-in payment has been repaid through the discount.
Based on its reserved annual capacity, Alderon’s buy-in payment is $20.46 million, payable in two
installments of $10.23 million each. The first installment of $10.23 million was paid upon signing of the
Port Agreement and the second payment of $10.23 million is due no later than July 1, 2013. As security
for the second payment, Alderon is required to provide an irrevocable guarantee of equivalent value.
The Port Agreement includes a base fee schedule regarding wharfage and equipment fees for iron ore
loading for  Alderon’s  shipping operations. The rates commence in 2014 and are on a sliding scale
based on the volume of iron ore that is shipped. The term of the agreement is for 20 years from the
execution date, with the option to renew for further five year terms, to a maximum of four renewals.
Bridge Financing Details

Liberty Metals  & Mining Holdings, LLC (“LMM”), a subsidiary of Liberty Mutual Insurance, one of
Alderon’s strategic investment partners,  provided a bridge loan to Alderon in the amount of $10.5
million in order for Alderon to make the first instalment payment and has agreed to provide a further
$10.5 million, if necessary, in order for Alderon to obtain the  guarantee  required  for the second
installment. The intention is that the loan will be a short term bridge loan that will be repaid from the
funds of the Hebei Iron & Steel Group (“Hebei”) transaction after it closes.

The maturity date of the bridge loan is September 30, 2012; however, Alderon has the ability to extend
the maturity date to March 31, 2014. In the event of such extension, the loan becomes convertible at
LMM’s option into Alderon common shares at a conversion price equal to the volume weighted average
trading price of Alderon’s common shares on the Toronto Stock Exchange for the five days prior to the
date that LMM delivers a conversion notice.

The loan is secured with a mortgage over the Kami property and bears interest at a rate of 8% per
annum, calculated and payable on September 30, 2012. In the event the Company exercises its option to extend the maturity date, the interest rate will increase to 9.5% per annum beginning on October 1,
2012.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 22, 2012, 10:32:05 AM
http://www.todayonline.com/World/EDC120722-0000013/China-in-talks-to-build-UK-nuclear-power-plants


Uranium market is looking up...Altius will benefit from this trend...in 2013 the us-Russia nuclear agreement ends...this is the majority up uranium supply that will be curtailed...

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 22, 2012, 10:52:22 AM
http://www.infowars.com/obama-declares-emergency-over-russian-enriched-uranium/


This was the cheap supply of uranium....the dynamics of the uranium market will change when Russia starts to charge market prices for the recycled uranium.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 23, 2012, 03:49:59 AM
http://finance.yahoo.com/news/cnooc-buy-canadas-nexen-15-102338784.html


One of many deals today....but this big one shows more of a continuing trend of companies from china investing in Canadian firms...the deals will continue..

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on July 24, 2012, 09:15:46 PM
Steel production strong:

http://www.bloomberg.com/news/2012-07-24/china-to-flood-steel-market-hurting-arcelormittal-commodities.html
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 25, 2012, 04:54:12 AM


Eric Sprott has said that 9 of the companies they own have had take over offers on average 40% premiums and for cash in the last 4 months.

He says china is buying up resources where they can.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 29, 2012, 09:41:38 AM
http://finance.fortune.cnn.com/2012/07/12/our-planet-will-truly-be-toast/


Don't let the title scare you.....Jeremy Grantham speech on why he thinks people can't afford to miss the opportunity in commodities...

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 30, 2012, 03:50:03 AM
http://finance.ninemsn.com.au/newscolumnists/greg/8507872/uranium-price-upside-ahead


Some positive feedback on the uranium price and Paladin energy...which bodes well for the Michelin project and obviously Altius.


Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on July 30, 2012, 05:52:22 AM
http://finance.yahoo.com/news/altius-executes-snelgrove-lake-iron-123600985.html


She grove deal done....australian private company to list on the Australian  exchange...giving Altius 20 % of the equity....interesting deal.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on July 31, 2012, 07:24:25 AM
http://alderonironore.com/_resources/media/2012-07-31-ResourceClips.pdf
Title: Re: ALS.TO - Altius Minerals
Post by: sculpin on July 31, 2012, 09:32:53 AM
Has anyone recently done an updated Altius net asset value calculation?
Title: Re: ALS.TO - Altius Minerals
Post by: hohi on July 31, 2012, 11:59:46 AM
@ sculpin

I uploaded my updated Fact Sheet of Altius with current Share Prices etc. You can have a look at it:
http://ihre-hoheit.de/2012_07_31_DD_ALS_%28A3%29.pdf

NPV from my very conservative calculations are about $ 620 M ...

cheers
Title: Re: ALS.TO - Altius Minerals
Post by: sculpin on July 31, 2012, 12:35:06 PM
Thanks hohi!
Title: Re: ALS.TO - Altius Minerals
Post by: hohi on August 01, 2012, 06:43:50 AM
You're very welcome! If there are any errors or if you have some kind of feedback - positive or negative - I would love to hear it.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 01, 2012, 11:13:01 AM

Hohi,


I am interested to find out where you found the information on major shareholders?

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on August 01, 2012, 12:19:27 PM

Hohi,


I am interested to find out where you found the information on major shareholders?

Dazel.

Wondering why you don't see your name on that list? ;)  :D
Title: Re: ALS.TO - Altius Minerals
Post by: hohi on August 01, 2012, 12:28:02 PM
@ Dazel:

The information about major shareholders actually can be found in their newest presentation:
altiusminerals.com/uploads/2012-June-QC.pdf

Cheers,
hohi
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on August 07, 2012, 07:12:03 AM
No surprise, the buybacks continue:

http://www.canadianinsider.com/node/7?ticker=ALS
Title: Re: ALS.TO - Altius Minerals
Post by: hohi on August 07, 2012, 10:35:17 AM
Very nice to see them buy at these undervalued levels. One of the smartest things they can do with all that cash right now imho.
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on August 08, 2012, 01:44:35 AM
I did some research on Alderon and I can't get that excited about it. 

1- It is a shady junior exploration company.

They "sponsor" theaureport.com (shills...).

They are probably paying money to penny stock promoters.  see
http://thepennystockpick.com/tag/alderon/
and then their disclaimer
http://thepennystockpick.com/disclaimer/
"Thepennystockpick.com its operators, owners, employees, and affiliates most often have interests or positions in equity securities of the companies profiled on this website, some or all of which may have been acquired prior to the dissemination of this report, and may increase or decrease these positions at any time even after making positive remarks about a company."
"Thepennystockpick.com most often receives compensation from third party(ies) for publication of the information contained in this website, as follows:
This compensation may constitute a conflict of interest as to Thepennystockpick.com ability to remain objective in our communication regarding the profiled company. Thepennystockpick.com may receive stock as compensation for advertising services. Most often Thepennystockpick.com will sell its stock during, before and after making positive comments about the company. Any compensation received for advertising will be disclosed at the bottom of the ThePennyStock.com emails."

2- I think that it will have higher operating costs than Bloom Lake (Cliffs bought that from Consolidated Thompson).

If you look at this Cliffs' earnings press release:
http://www.euronext.com/fic/000/070/720/707207.pdf
Bloom Lake has cash costs of $91/t for the first half of 2012 (estimated to be $85/ton for the entire year).  This is well above what was stated in their technical reports and well above the $30/ton figure thrown around somewhere on the Internet.

Pros for Alderon:
-very close to infrastructure
-management team has built a mine before
-off-take agreement provides partial financing
-vaguely close to turning into a producing mine

Cons for Alderon:
-high manganese levels (and to a smaller degree sulfur) in ore means that they will have smelter deductions and receive a lower price for their ore.  The PEA estimates $15/t   (I have no idea how the smelter deductions will be calculated.)
-high manganese limits their marketing flexibility and they might only be able to sell to China.  The problem with selling to China is that Alderon will have to pay a little ~$20/ton for shipping (depends on shipping rates... overcapacity in the drybulk sector may keep rates down) which may be double that for NA/European customers.
-slightly burdened by 3% royalty to Altius.  Not a big deal.
-slightly burdened by off-take agreement.  Hebei gets a 5% discount on Platts benchmark price for first 60% of 8MT/yr.

Compared to Bloom Lake, Alderon might have a margin that is lower by ~$20-30+/t. 
Cliffs is getting a price of $128/t - $175/t between 2011-2012 for its Eastern Canadian ore (some of this is affected by the output of high manganese pellets from Wabush, which I believe sells at a premium to Bloom Lake fines output?).
If D&A runs $16/t and cash cost is $85/t-$91/t for Bloom Lake, then the total costs are $101/t-$107/t.  Add 20-30/t to that and Alderon might run $121/t-$137/t in costs.  The profit margin might be anywhere from -$9/t to $54/t.  It could be marginally profitable and could very well turn into a producing mine.  I definitely would not short it.  But perhaps it is not worth as much as you might like to hope?

3- Other iron ore mines have cash costs far lower than Bloom Lake.  Cliffs has operations at $62/ton cash costs.  I haven't checked other miners but they might be at $40-50/t.  Many of the $60/ton and below operations are being expanded (e.g. Fortescue is taking on debt and expanding).  So you might make the argument that eventually new supply will bring iron ore prices down.  A smart buyer might stay away from really marginal stuff like Alderon.  (But if iron prices rise... boy oh boy will Alderon go up along with Altius' iron ore portfolio.)

4- I think that the mining sector in general has some serious problems.  This is why Altius' royalty strategy is brilliant. Whenever miners do dumb or crazy things, Altius stands to benefit if it is holding the royalty.  If somebody puts a marginal mine into production, Altius' royalty isn't killed by any losses on the equity/debt side if commodity prices slide.  And sometimes mining companies will mine at a loss (e.g. Yukon-Nevada Gold I am looking at you)... great for the royalty holder, terrible for the equity owners.

Yes Altius does own Alderon stock (which has been diluted by equity raises).  But I think that's most because they have to, not because they want to.  They took a higher royalty presumably in exchange for less shares.  I am guessing Alderon was a cash-strapped junior when it acquired the property and it wouldn't have made sense for it to pay cash (juniors are almost always undercapitalized).
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on August 10, 2012, 09:19:30 AM
Recent article:

http://www.miningweekly.com/article/labrador-trough-positioned-to-feed-canadas-iron-ore-exports-2012-08-10

And, my understanding is that the initial higher cash costs at bloom lake were due to a fire and extended down-time from equipment failures.  I remember reading (dont have link) management is still confident they will bring costs down to their low 60s target.
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on August 10, 2012, 02:15:24 PM
Hmm if you read Cliff's press release, they seem to be staying that cash costs will stay at high levels.  If the first half of the year was $91/t, and the forecast for the full year is $85/t, then the second half would have costs of $79/t.  That's still well above $60/t.

2- Opex versus cash costs:  Cash costs will include things like equipment leases and royalties (Bloom Lake has none AFAIK).  So this may explain part of the gap between cash costs and projected operating costs but not all of it.

3- Actually if you read Cliff's press release things are a little nastier.  They are going to keep production at about 7.2MT/yr instead of the 8.0MT/yr that was supposed to happen.

So if BBA did technical report work for Bloom Lake and they are now doing the work for Alderon and other juniors in the area, you might expect that the technical reports are on the very aggressive side.

3b- There are legitimate reasons why technical reports can be wrong.  There is uncertainty in the metallurgical process.  What works on a bench/laboratory scale doesn't necessarily behave the same on a production scale.  What the metallurgical engineers can do (if they have the money) is to run tests on a large sample of ore (you need a bulk sample) at various scales (bigger and bigger).  And from that they try to extrapolate to what would happen on a production scale.  It's an educated guess.

However, the problem with juniors is that they sometimes find authors who are aggressive in their educated guess or they pressure the author to be aggressive.  And I guess I was fooled as I didn't see anything in the Bloom Lake report that immediately struck me as very aggressive.  (It was the reverse... I was surprised that they used such a low price for the commodity price assumption.  It's unusual to use a price lower than the 3-year average.)

3c- Honestly, because there are legitimate reasons why technical reports can be wrong, it's hard to prosecute technical report authors for being way too aggressive.  Canadian regulators have been pretty lax about this and I don't recall anybody getting punished for putting out a really aggressive technical report (Peter George / Barkerville Gold takes the cake... but AFAIK he got a slap on the wrist).

4- Basically, I really have no idea what's going on.  I don't know what accounts for the miss between BBA's technical report and what Cliffs is reporting. 
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on August 13, 2012, 10:08:39 AM
http://www.alderonironore.com/_resources/news/2012-08-13-NewsRelease.pdf
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 15, 2012, 06:25:25 AM
http://finance.yahoo.com/news/paladin-energy-ltd-long-term-110000145.html


Paladin has secured $200m in a prepayment for future uranium output...the deal is secured by 60.1% of their Canadian asset "Michelin project." This is indeed very good news for Altius....it confirms the value of the project for Paladin. That is a large prepayment in this market and security in this asset means they would likely want to deliver the uranium from The Michelin project. The michelin project is the old Aurora project that Altius sold at a $200m profit.

It would be great to see this project get some more attention not only for the future royalty stream to Altius but the other uranium assets they hold. We know that Altius has built valuable ties to China and we know that China has resumed their ambitious nuclear program...Connecting the two seems like the logical next step.

Dazel.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 16, 2012, 06:00:09 AM
http://finance.yahoo.com/news/alderon-amends-hebei-agreement-052400649.html


Not sure why the change....it looks like more investment in the kami project itself and little less in the shares of Alderon.
It also looks like there has been no change to the $3.42 subscription price which should be very positive for the stock.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: value-is-what-you-get on August 16, 2012, 06:17:29 AM
It looks like the price has indeed changed! 

"Under the terms of the amended Subscription Agreement, Hebei will subscribe for common shares at a price per share equal to C$2.41. Upon closing of the Private Placement, Hebei will acquire approximately 25,828,305 common shares for gross proceeds to the Company of C$62.2 million representing 19.9% of the issued and outstanding shares of Alderon. "

 . . . and then bumping up the investment in Kami for the same ownership percentage.  This could well be optics and approval-related - why pay 40% more than the quoted price?  In addition, the end use for the money is Kami anyway so the net result is the same, but without overt stock price disparities.

Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 16, 2012, 07:39:12 AM
Thx did not see that release.

Get the cash....the project economics will take care of the rest.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 16, 2012, 07:54:57 AM
Alderon will raise a lot of debt...as did Thompson...it appears that management has chosen accordingly. I would argue that their partners are much stronger than Thompson's. Thompson had to raise money at a terrible time as well.

The opportunity in all of this is that the price of all of the components to construct the mine have come down substantially as well. We see Alderon now raising towards production as Thompson did. However, we see Alderon advantaged over Thompson by two major factors.

1. They have much larger institutional backing

2. The investment community has already seen Thompson do it. They also see all of the winners from that process.
-shareholders
-lenders (the whole investment banking world is looking for yield)
-fees...investment banks to insurers (Liberty) ...government
-jobs and economic activity...big winner
-infrastructure build outs....power to rail..huge for Quebec and Labrador expect quick permitting to make sure the project gets done.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 16, 2012, 08:29:47 AM

Value is what you get,


Thanks for correcting me so quickly...only looked at the first part of the release quickly...on vacation.

For us...it is the agreement itself that matters..the continuity of the project is all we care about...yes altius's stake received some dilution from the $3.42 to $2.42 level. But more importantly to us is they raised the project financing. they will raise about $1 billion in debt and equity from here so dilution will continue over the next few years...we would pay up for the stability as Alderon did...

We see Altius's value in the royalty as we have stated many times....Paladin and Alderon have raised significant capital in a brutal financing market...well done to both companies.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on August 16, 2012, 09:17:15 AM
The rest of the money is contingent on positive results from a feasibility study.  There is an option embedded in there.

If the feasibility study is negative, then Hebei may have overpaid for Alderon shares and Alderon gets to hang onto the money from the share subscription.  You can make the argument that this is fair since Hebei is getting some very good terms to its deal.  By committing to buying 60% of Alderon's ore at a discount of 5% (I still don't know how they will handle smelter/quality deductions and they will be significant), it's like Hebei has a royalty of 3%.  But I believe it's actually worth more than 3%.  The benchmark price is for iron ore delivered to China, so presumably it's Alderon that will pay for the shipping.  It would make more sense if the purchase price was benchmarked to a Quebec port, but no such benchmark exists AFAIK.

Suppose shipping costs $20/ton.  The maximum upside for Alderon is $20/ton if drybulk rates drop to $0/ton.  Whereas in the past, drybulk rates have exceeded the cost of the ore itself (!!!).  So Alderon is exposed to risks from the fluctuation in shipping costs... there is little upside and a lot of downside.
Hebei also has an option to take the rest of the ore at the benchmark price without any discount.  This option is worth something too.  If funky things happen with drybulk rates (they are extremely volatile) then that option could be worth a lot.

2- Liberty probably realized that they were getting shafted a little.  Hebei gets all sorts of options (and something worth a little more than a 3% "royalty") while Liberty does not.  So adjusting their subscription price down makes some sense.
This is somewhat bad for Alderon as shareholders get diluted.  Obviously existing shareholders would like to see Alderon sell shares at a high price.  There is a big difference between #/42 and $2.42.

3- Alderon is no Consolidated Thompson in my opinion.  Alderon's ore will be penalized for manganese content.  I think that Hebei did protect itself by stipulating deductions for deleterious minerals in its off-take agreement (it's a pretty standard practice).  Otherwise Alderon could cut corners on mineral processing costs (e.g. not spend the electricity and mill capacity on grinding the ore finely) and ship a product with high levels of silica, manganese, etc.
Title: Re: ALS.TO - Altius Minerals
Post by: value-is-what-you-get on August 16, 2012, 09:58:17 AM
I have a couple of questions for Itsavaluetrap:

Wouldn't all suppliers including South America and Australia (70+% of global supply) have similar exposure to dry goods shipping rate fluctuations?

Is .60% manganese considered to be a high level?



Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on August 16, 2012, 11:24:41 AM
Usually it's the purchaser who pays for the shipping.

On second thought I don't think that the risk from shipping cost fluctuations is a huge issue.  Alderon should be able to hedge its risk by entering into long-term freight contracts.  I don't believe that there would be significant counterparty risk to Alderon... I believe that it is the charterer who is the most likely to default.  I'm guessing that the shipping company will want to be compensated for credit/counterparty risk so there would be a minor cost to this hedge.

2- If Alderon could sell to non-Chinese customers, then Hebei's option on 40% of their output could hurt them a little.  After adjusting for shipping costs, it could be possible that Alderon should sell to local customers rather than Chinese customers.  But Alderon's technical report suggests that it will likely sell to Chinese customers only due to the lower quality of its ore.

Quote
Wouldn't all suppliers including South America and Australia (70+% of global supply) have similar exposure to dry goods shipping rate fluctuations?
Yes.  Brazil to China is a longer route than Australia to China.  Shipping costs are a big reason why Vale decided to build unusually large ore carriers (larger than capesize).  The larger vessels are more efficient.  And owning its vessels reduces their exposure to shipping costs.
(I'm not saying that Vale's decision is a good one necessarily.  Some people say that there has been a huge wave of overbuilding in the drybulk sector.)

Quote
Is .60% manganese considered to be a high level?
Yes.  According to the technical reports, sulfur is also a little on the high side.

I don't know enough about iron ore to know what level of deduction Alderon's ore may receive.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 19, 2012, 07:12:28 AM
http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/oil-and-ink-publishers-bold-refinery-plan-raises-eyebrows/article4486051/


Great idea!
We think the better idea is the fully permitted NLRC on the east coast that is ready to go! Black mentions one third Chinese ownership...interesting.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 19, 2012, 07:20:45 AM
http://altiusminerals.com/projects/nlrc


The 36 month creditor standstill agreement expires November20 2012.
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on August 20, 2012, 07:41:24 AM
Grandich on alderon:

http://www.grandich.com/2012/08/grandich-client-update-alderon/

from stockhouse bullboard
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on August 20, 2012, 12:30:44 PM
Remember that Alderon is paying Grandich to say good things about them.  This does not generate value for society and does not generate value for all shareholders.

2a- Grandich is glossing over the value of Hebei's option.  If the project is not economic, it does not have to commit the rest of the capital.
2b- He is also glossing over the value of Hebei's 5% discount.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 20, 2012, 01:54:09 PM
http://www.theglobeandmail.com/globe-investor/franco-nevada-to-pump-1-billion-into-inmets-cost-of-cobre-panama-mine/article4489537/


The bargain hunters are out.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 23, 2012, 01:13:07 AM
http://business.financialpost.com/2012/08/22/olympic-dam-delay-bodes-well-for-uranium/


This bodes well for The uranium industry....
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 23, 2012, 01:22:08 AM


Royal gold is trading near an all-time high today. There PE is now 51.67.

To put that in perspective...51.67 times ( Altius Voisey bay royalty) $4m

Over $200 m pre tax valuation to Royal Gold market cap.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on August 23, 2012, 05:57:31 AM


Royal gold is trading near an all-time high today. There PE is now 51.67.

To put that in perspective...51.67 times ( Altius Voisey bay royalty) $4m

Over $200 m pre tax valuation to Royal Gold market cap.

Dazel.

That s because the shareholders of royal gold are not as smart as the ALS shareholders (I don t include myself, though I have accumulated a significant amount). I think most current holders will be long gone way before 51  times.
Personally I am not counting on that type of valuation- it seems crazy to me
Dazel (and other posters) appreciate all your updates + posts.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 23, 2012, 06:43:22 AM
Biaggio,


As you know I post things that I see...what I take from the 51 pe and Franco Nevada valuation is that there are very very few royalty companies out there. So the lack of supply of this type of investment has investors fighting over theirs shares.

What this means to us... is that Altius has a hidden asset in Voisey Bay royalty that if sold to Royal Gold would be worth many many times at Franco Nevada or Royal Gold when compared to Altius.

This should give Altius a currency in this market. Do we want them to sell it? No. Unless they could
get $100m out of it. Take 25 years of payments out now. We are not saying this is going to happen but that the assets are being misplaced at Altius...the value of their assets will be priced in the market...there are  many ways to unlock hidden value.

The Voisey's Bay Royalty remains Royal Gold's largest royalty and the main reason they took out International Royalty from Altius.





Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: value-is-what-you-get on August 23, 2012, 06:56:14 AM
3- Alderon is no Consolidated Thompson in my opinion.  Alderon's ore will be penalized for manganese content.  I think that Hebei did protect itself by stipulating deductions for deleterious minerals in its off-take agreement (it's a pretty standard practice).  Otherwise Alderon could cut corners on mineral processing costs (e.g. not spend the electricity and mill capacity on grinding the ore finely) and ship a product with high levels of silica, manganese, etc.

I believe you are here for alterior motives based on the nature, tone and language used in your posts and even your username. 

Having done some subsequent research on your assertion above, I can find absolutely nothing indicating that 0.6% Manganese is a bad thing.  As a matter of fact Manganese is added in the steel making process up to 8% concentrations:

"Steel
Manganese is essential to iron and steel production by virtue of its sulfur-fixing, deoxidizing, and alloying properties. Steelmaking,[27] including its ironmaking component, has accounted for most manganese demand, presently in the range of 85% to 90% of the total demand.[26] Among a variety of other uses, manganese is a key component of low-cost stainless steel formulations.[24][28]

Small amounts of manganese improve the workability of steel at high temperatures, because it forms a high melting sulfide and therefore prevents the formation of a liquid iron sulfide at the grain boundaries. If the manganese content reaches 4%, the embrittlement of the steel becomes a dominant feature. The embrittlement decreases at higher manganese concentrations and reaches an acceptable level at 8%."

Please provide some sort of proof or citing that indicates 0.60% manganese in iron ore is considered a high level and subjects the ore to price discounts.

As far as Grandich not adding any value for saying good things about Altius/Alderon, it follows logically that we can do away with all forms of advertising as well on the same basis of not adding value.

I think the intelligent posters on this thread understand you better than you understand them.  The proof will lie in subsequent posts.
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on August 23, 2012, 12:48:56 PM
Hi value-is-what-you-get

1- When I first tried to sign up for this forum, my username was GlennC but my membership was never approved for whatever reason.  (Perhaps it is too similar to another username on this forum that also starts with Glenn.)

2- In regards to the manganese content of Alderon's ore, please refer to the technical report that Alderon filed on SEDAR and that can also be found on its website:
http://alderonironore.com/_resources/kami/PEA_Final2011.pdf

If you search for the phrase "Quality Penalties" in 16-4, you will see that the technical report anticipates a $15/t penalty.  (The technical report notes that sulfur and manganese are the two main issues.)

3- Don't get me wrong... I am bullish on Altius.  I think that they are the best managed mining-related company out there.  (Northfield Capital would be #2.)
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on August 23, 2012, 01:27:46 PM
To add on...

4- I am just extremely cynical about juniors.  And to a lesser degree, I don't like mining stocks.  If I was forced to index, I would never want to index these stocks.  These stocks are screwed up because:
a- Even Goldcorp (a large cap) pays for people to shill for them.  Goldcorp sponsors theaureport.com
b- Gold miners should have made more money in a bull market.
c- As far as juniors go, their lack of capitalization means that they constantly have to spend money to raise money.  For some juniors, not that much money is spent on actual exploration (sometimes less than 50%).
d- Sometimes juniors will extend warrants (this is sort of like giving away free money) because it's a cheap way of raising money.  Because the alternatives have paperwork costs and you may need to pay brokers several percent.  Very few companies do rights offerings (arguably the fairest for shareholders) because it costs money to do it and it doesn't make brokers happy so they won't pump your stock.  Raising money is expensive... but they have no choice.

Rick Rule (he/Sprott is long Altius):
It is critical for gold stock speculators to remember that the junior market, in aggregate, is always overvalued. If we were to merge every gold junior in the world into one entity (let's call it Junior Goldco), that company would lose (profits and corporate acquisitions less industry expenditures) somewhere between two billion and eight billion dollars per year.
http://www.caseyresearch.com/cdd/rick-rule-why-im-excited-about-market

Harris Kupperman, hedge fund manager (no idea if he is long Altius):
Quick, what’s the world’s worst investment sector?
Airlines? Autos? Biotech? Give up? Junior mining is way worse. Airlines limp on for years in quasi-bankruptcy—so do autos. A few companies like Toyota even do well. Biotech companies sometimes find something interesting. Even if your junior mining company finds something, you still will probably lose money.
http://adventuresincapitalism.com/post/2010/03/07/Mining-worse-than-airlines.aspx
*He may be making a reference to Warren Buffett's shareholder letters where Warren points out that airlines have made no money for investors.

5- I hope you see why Altius is brilliant.  The royalty structure protects them against a lot of the problems in the mining sector.  And usually those problems work to the royalty holders advantage.

If somebody chases an uneconomic mine, the equity holders lose a lot of money but the royalty holder still makes some money.  If Alderon turns into a mine and the equity owner goes into empire building mode and expands production at the mine, the royalty benefits.

On the exploration side, sometimes juniors will keep on drilling so that they can generate news flow to raise more money to pay insiders' salaries.  Why do exploration yourself when you can get a junior to do it?

6- Assuming that everybody was rational and that juniors act in the best interest of shareholders, it doesn't entirely make sense for Altius to seek royalties on their joint venture deals.  If they took equity instead, they would be helping out more in terms of raising capital to build a mine.  Altius has a lot of cash on its balance sheet.  In theory it would make sense for it to deploy its capital into building mines.

Building mines is not that good of a business.  Altius isn't buying more shares of Alderon to push it towards production (even though it could).  It is exercising capital discipline and waiting for really high rate of return opportunities.  They are really smart.
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on August 24, 2012, 11:05:45 AM
Iron ore falls below $100....

http://www.businessweek.com/news/2012-08-24/iron-ore-drops-below-100-as-slowing-growth-in-china-cuts-demand
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on August 29, 2012, 09:03:40 AM
Interesting article on spread between domestic and imported iron ore prices in china:

http://blogs.ft.com/beyond-brics/2012/08/29/iron-ore-tests-the-chinese-floor-theory/#axzz24nQ97pcb
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 29, 2012, 10:30:47 AM


Itsavaluetrap,

We agree on junior miners in general...we also agree that Altius are the smartest guys in the room. Rick Rule and Brent Cook refer to Altius as a merchant banker. All we care about is return on capital. Altius like Leucadia are lumpy returns for now.

We would love a return on the cash that is sitting there...we will see what happens.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 29, 2012, 10:46:02 AM


Jjsto,

Alderon.

Thompson consolidated ramped up in a hurry at prices below $75...the cost to build the alderon project have dropped significantly  in the last 8 months...engineering, material, labor, all of the inputs have dropped because in times of uncertainty everyone stops....if they were to do the build out at $150 a ton....everything would be extremely expensive because every one would be trying to build out. We are seeing projects pull back and anyone without the right economics will hold off until the price rises. Alderon will benefit on the build out at a lower iron ore price and be able to negotiate better deals with their suppliers...They want the price high when they produce not when they build.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on August 29, 2012, 06:09:20 PM
Jjsto,

Alderon.

Thompson consolidated ramped up in a hurry at prices below $75...the cost to build the alderon project have dropped significantly  in the last 8 months...engineering, material, labor, all of the inputs have dropped because in times of uncertainty everyone stops....if they were to do the build out at $150 a ton....everything would be extremely expensive because every one would be trying to build out. We are seeing projects pull back and anyone without the right economics will hold off until the price rises. Alderon will benefit on the build out at a lower iron ore price and be able to negotiate better deals with their suppliers...They want the price high when they produce not when they build.

Dazel.

Dazel, which model are you using to state the costs have been reduced significantly? Do you have any similar examples where the drop of cost of developing the asset made the future asset more viable even if the resource price fell.

BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 29, 2012, 06:47:25 PM

Beer baron,

Iron ore do not sell futures like copper or platinum..they used to price iron ore once a year...they may go back to this method who knows...

The future price of iron ore has not been accounted for because the contracts are in real  time...they are not futures like copper or oil for say december... They are negotiated prices between real buyers and sellers...not hedge funds or hedgers etc...No bid...guess what.. Prices plummet.

When china decides to cut inventory this is what happens...the steel makers were readily paying
$140 a ton 4 months ago....they are not now...when they need it again they will pay what is needed
to get product...it is that simple. To build a mine takes a lot of capital....but when the entire iron ore community is trying race to cash in on $140 iron ore pricing the costs to build a mine escalate. Look
at Fortescue they were a billion dollars off on their capital expansion program. They have said costs
have come down significantly....but a billion dollars off!! That is spending recklessly. Like all
producers they will cut back.

I hope that helps....when supply is cut which is what is happening already with iron ore pricing dropping like it is...it sets up for higher prices later on...that is all I am saying. There is race in Labrador to be the first "new producer" because there was limited rail room electricity etc...if Alderon does not have to compete for all of these services, labour, engineering, surveying, environmental prices for their build out will come down.


Dazel.



Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on August 30, 2012, 12:58:30 PM
http://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=157890&sn=Detail&pid=102055


Rogers calls the mining slowdown a blip...."buy the commodities that have fallen the most."


Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on August 30, 2012, 10:47:24 PM
I think I'd be more bullish on nickel than on iron ore.

IRON ORE:
production has gone up several times over the past decade
price has gone up several times over the past decade
pretty easy to find... a lot of the juniors in the Labrador trough have found iron ore deposits that are economic.  Pretty much every iron ore miner has increased production at their mines and have ongoing expansion plans.  e.g. Fortescue is expanding, Bloom Lake is expanding, etc. etc.

NICKEL:
production has stayed flat over the past decade
price has gone up over the past decade, but nowhere as much as iron ore
HARD to find low-cost sulfide deposits.  None of the juniors exploring near Noront's Eagle One deposit and around Voisey's Bay have found any nickel.  In each area, there were hundreds of millions of dollars spent and 30+ juniors with staked claims.

2- All miners have seen very significant price inflation... this will drive commodity prices higher.  This is good for Altius when it owns royalties; not so great when it owns mining companies or exploration companies.

3- Jim Rogers is mostly into commodity futures and not so much into commodity stocks.  He avoids commodity stocks as futures tend to outperform commodity stocks by 3 times.  But he says that if you find the right commodity stock, you can make a lot of money.  Hopefully Altius will do that for us.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on September 04, 2012, 12:08:53 PM
Email from Alderon:

http://alderonironore.com/_resources/news/2012-09-04-NewsRelease.pdf

Quote
Alderon Iron Ore Corp. (TSX: ADV) (NYSE MKT: AXX) (“Alderon” or the “Company”) is pleased to announce that it has closed the Alderon common share (“Common Share”) subscription component of the previously announced transaction with Hebei Iron & Steel Group Co., Ltd. (“Hebei”). Pursuant to the terms of the subscription agreement (as amended) (the “Subscription Agreement”), Hebei has acquired 25,858,889 Common Shares at a price of C$2.41 per Common Share for gross proceeds to the Company of approximately C$62.3 million, representing 19.9% of the issued and outstanding Common Shares. Alderon and Hebei have also executed the remaining definitive agreements, including the Investor Rights Agreement, the Off Take Agreement and the agreements required to form and operate the limited partnership that will own the Kami iron ore project (the “Kami Project”).

Concurrent with the Hebei closing, Liberty Metals & Mining Holdings, LLC (“LMM”), a subsidiary of Liberty Mutual Insurance, has acquired 3,816,181 Common Shares at a price of C$2.41 per Common Share for gross proceeds to the Company of approximately C$9.2 million, allowing LMM to maintain its relative proportionate interest in Alderon. Also concurrent with the Hebei closing, Alderon is repaying the $10.5 million bridge loan previously advanced by LMM.

Mark Morabito, Executive Chairman of Alderon, said “The closing of the private placement component of Hebei’s strategic investment in Alderon and its Kami Project is a major milestone for both parties. One of Alderon’s next milestones will be the completion of its Feasibility Study, which is expected in Q4 2012. Once Alderon delivers to Hebei a Feasibility Study that meets the required criteria, Hebei will contribute the remainder of its C$182.2 million investment. I would also like to acknowledge and thank Liberty for its continued support of Alderon.”

Hebei’s initial investment in Alderon and the Kami Project will total C$182.2 million. Pursuant to the terms of the definitive agreements, within 15 business days of Hebei receiving a feasibility study that meets certain criteria, Hebei will contribute the remaining C$119.9 million of the initial investment and Alderon will contribute the Kami Project and relevant properties to the newly formed limited partnership which is owned as to 25% by Hebei and 75% by Alderon.

Other transaction highlights include:
Hebei agrees to use its best efforts to assist in obtaining project debt financing for the Kami Project from financial institutions, including Chinese banks.
Alderon and Hebei will be required to contribute to capital expenditures for the development of the Kami Project not covered by initial capital contributions and project debt financing, in accordance with their respective interests.
Upon Hebei's acquisition of its 25% interest in the Kami Project, it will be obligated to purchase upon the commencement of commercial production, 60% of the actual annual production from the Kami Project up to a maximum of 4.8 million tonnes of the first 8.0 million tonnes of iron ore concentrate produced annually at the Kami Project. The price paid by Hebei will be based on the monthly average price per DMT for iron ore sinter feed fines quoted by Platts Iron Ore Index (including additional quoted premium for iron content greater than 62%) (“Platts Price”), less a discount equal to 5% of such quoted price. Hebei will also have the option to purchase additional tonnage at a price equal to the Platts Price, without any such discount.
Hebei has agreed to co-operate with Alderon in its efforts to attract additional off-take partners in respect of the annual production from the Kami Project that has not been committed to Hebei.
Alderon will be the manager of the Kami Project and will receive a fixed annual management fee during the construction period of the project. Once the Kami Project has reached commercial production, Alderon will receive a management fee on a per tonne of iron ore concentrate basis.
The entire C$182.2 million of investment proceeds from Hebei will be used for the exploration and development of the Kami Project, the repayment of the $10.5 million bridge loan from LMM and other relevant corporate expenses of Alderon.
Alderon has granted Hebei a pre-emptive right to maintain its interest in Alderon in certain circumstances.

As a term of the transaction, Hebei was entitled to nominate two directors to the Board of Alderon. Hebei has nominated Ms. Zheng Liangjun and Mr. Tian Zejun and they have been appointed to the Board of Alderon. The Board would like to welcome the new directors and looks forward to a long term and successful partnership.

Ms. Zheng, B.Eng., M.Eng., MBA, brings 21 years of international trade and investment experience to Alderon. Ms. Zheng was Deputy General Manager of Handan Iron and Steel Group Import & Export Co., Ltd., a subsidiary of Hebei from 2006 to 2008. Since 2009, she has been with Hebei Iron and Steel Group International Trade Corporation, also a subsidiary of Hebei. In 2011, she became Deputy General Manager of Hebei Iron and Steel Group International Trade Corporation, responsible for overseas investment and projects as well as equipment imports. Ms. Zheng received the title of Senior Engineer in 1999 and holds a Bachelor of Engineering degree from Hebei University of Technology, a Masters Degree from Wuhan University of Science and Technology and a Masters of Business Administration from Beijing Jiaotong University.

Mr. Tian, B.Eng., MBA, has 24 years of experience in mining, geological and metallurgical technology and management. Since 2010, Mr. Tian has been Deputy General Manager of Hebei Iron and Steel Group Mining Co., Ltd and General Manager of Laiyuan Non-ferrous Metals Co., Ltd., each a subsidiary of Hebei. Mr. Tian has served as a Standing Committee member and Deputy Secretary of Laiyuan County in Hebei province since 2009. Mr. Tian received the title of Senior Engineer in 1997 and holds a Bachelor of Mining Engineering degree from Xi’an University of Architecture and Technology and a Masters of Business Administration from the University of Texas at Arlington.

Stepping aside from the Alderon Board to allow for the appointment of the Hebei nominees is Mr. Stan Bharti. Mr. Bharti was one of Alderon’s founding directors and he has been instrumental in attracting the necessary capital to support its development. Mr. Bharti, through Forbes & Manhattan, Inc., will continue to advise Alderon on a consulting basis and Alderon will retain the benefits of his experience and expertise. The Board would like to acknowledge and thank Mr. Bharti for his significant contributions to the Company’s development to date.
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on September 07, 2012, 05:05:24 AM
Grandich Update:

http://www.grandich.com/2012/09/grandich-client-alderon-iron-ore-11/

Title: Re: ALS.TO - Altius Minerals
Post by: SouthernYankee on September 07, 2012, 05:12:59 AM
Has anyone visited these areas like Labrador and/or the rest of Newfoundland? The pictures on the Altius website are beautiful, but I am trying to comprehend the amount of land that is up there!
Title: Re: ALS.TO - Altius Minerals
Post by: FFHWatcher on September 07, 2012, 06:07:05 AM
Has anyone visited these areas like Labrador and/or the rest of Newfoundland? The pictures on the Altius website are beautiful, but I am trying to comprehend the amount of land that is up there!

Ever been to Wyoming?  Labrador is 20% larger by area.   Wyoming is desolate.  Wyoming is the least populous state with 2nd least population density and Labrador makes Wyoming look like New York City.  Wyoming has 568,000 people.  Labrador has about 30,000.  Biggest city is Labrador City with something like 7,500 which is close by the Kami project. 

Unless you are a geologist, you haven't visited Labrador City, as a guess.
Title: Re: ALS.TO - Altius Minerals
Post by: LTVALUE on September 07, 2012, 11:06:51 AM
China continues to move along......


http://www.reuters.com/article/2012/09/07/markets-ironore-idUSL4E8K707L20120907 (http://www.reuters.com/article/2012/09/07/markets-ironore-idUSL4E8K707L20120907)
Title: Re: ALS.TO - Altius Minerals
Post by: naboo on September 07, 2012, 11:44:04 AM
China won't stop the construction in the near term.  There are still a lot of projects need to be done.

 http://www.businessweek.com/news/2012-09-06/china-approves-plan-to-build-new-roads-to-boost-economy

".....................The approvals on Sept. 5 for a total of 25 new subway and inter-city rail projects are worth more than 800 billion yuan ($126 billion), or 1.7 percent of 2011 gross domestic product, according to HSBC. The spending will run from the second half of the year to 2018, it said. "

Title: Re: ALS.TO - Altius Minerals
Post by: LTVALUE on September 07, 2012, 12:24:42 PM
It is my belief that a significant percentage of the increased iron ore production coming on line will either be delayed or stopped due to political factors, cost overruns, underlying commodity price decline, etc. 

A major strength of Altius is their ability and discipline regarding when to invest capital.  Many of the royalty deals in the past couple of years will only be successful if the underlying commodity appreciates in price. Altius being value investors, only look at deals where preservation of capital exists and returns are looked at with an understanding that future outcomes fall under a number of scenarios.  In other words they model their own probability distribution for each deal and only act when the least favourable outcomes still promise preservation of capital and a suitable rate of return to accommodate the necessary risk.  i.e. limiting their investment in Alderon to the initial $2 million!  At present Altius is being rewarded/penalized based on their iron ore exposure.  Altius' value is comprised of much more....IMHO their iron ore properties will still prove of great value and if they don't work out they are still in a position to capitalize on future uncertainty.

Here is an interesting article regarding the future of Chinese steel demand:

http://ftalphaville.ft.com/blog/2012/03/21/930311/steel-demand-is-endless/ (http://ftalphaville.ft.com/blog/2012/03/21/930311/steel-demand-is-endless/)
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 07, 2012, 02:13:13 PM

We see a huge window of opportunity...this what Thompson Consolidated did...they built during the low price environment and cashed in at the high...deja vu all over again.

As for Altius we are hoping they are doing or have done some buying of other companies lately...all commodities are now rallying...iron ore will join the party.

As Rogers said it is just a blip...get to work Alderon...Hebei is an obvious believer....

For us...our other investments are moving up quickly...it may work out Perfectly to add to Altius and Alderon here.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 12, 2012, 02:43:37 AM
http://www.abc.net.au/news/2012-09-12/iron-ore-prices-continue-rebound/4256692?section=business


Funny  negativity always steals (pardon the pun!) the headlines....the rebound in iron ore prices is  hard to find! Whoever, picked up the 4 or 5 million shares of Alderon during the latest drop is going to make a killing...hopefully Altius added.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 12, 2012, 02:54:37 AM
http://www.miningweekly.com/article/rcr-sees-potential-uranium-supply-gap-emerging-2012-09-12


Paladin will be looking at the 2015 uranium demand as china brings on their 26 nuclear reactors....if you were to add the 18 japaneese reactors potentially brought back on line things could get very interesting for uranium prices.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on September 13, 2012, 09:06:28 AM
http://altiusminerals.com/press-releases/view/263

Quote
St. John’s - Altius Minerals Corporation (“Altius”) reported a net loss attributable to common shareholders of $2,857,000 or ($0.10) per share for the three months ended July 31, 2012 compared to a net loss of $1,588,000 for the same period last year. The current year was affected primarily by the losses in the share of associates, decreased royalty revenue, and a general decline in the market value of investments.

A summary of the financial results is included in the following table.

Three months ended July 31, (unaudited) 2012 2011 $ $ Revenue 1,335,000 2,156,000 Net earnings (loss) attributable to shareholders (2,857,000) (1,588,000) Diluted earnings (loss) per share (0.10) (0.06) Net cash flow from operating activities 4,647,000 (6,751,000)

Significant progress on its wholly owned and partner-funded project interests continued during the period, particularly in the Labrador West iron ore mining district. Additional information on the Corporation’s results of operations is included in the Corporation’s MD&A, and Financial Statements, which were filed on SEDAR today and are also available on the Company’s website at www.altiusminerals.com.
Title: Re: ALS.TO - Altius Minerals
Post by: LTVALUE on September 13, 2012, 09:31:01 AM
Information regarding Snelgrove Lake deal:

http://www.mamba.com.au/uploads/9/2/0/6/9206450/2012-07-30_mab_mamba_to_acquire_highly_prospective_iron_ore_project.pdf (http://www.mamba.com.au/uploads/9/2/0/6/9206450/2012-07-30_mab_mamba_to_acquire_highly_prospective_iron_ore_project.pdf)

The company is Mamba Minerals listed on the ASX.

Below is consideration given to Altius from Mamba's website:

Through the acquisition of CIP Mag,  Mamba  will control the right to acquire
100% of the  Snelgrove Lake  Project from Altius  via the Option Agreement for
consideration as follows:
(i) C$410,000 to be paid to Altius;
(ii) The placement of  17,000,000 options
1
to acquire fully paid ordinary
shares in Mamba exercisable on or before 31 August 2015 at $0.25 per
MAB Option, to Altius at an issue price of $0.005 per MAB Option to
raise $85,000 (“Altius Placement”). Completion of the Altius Placement is
at the election of Altius;
(iii) C$3,250,000 to be spent by MAB on exploration of the  Snelgrove Lake
Project within the first 18 months (Tranche 1 Exploration Spend);
(iv) C$3,250,000 to be spent by MAB on exploration of the  Snelgrove Lake
Project within the first 36 months (Tranche 2 Exploration Spend);
(v) $5,750,000 to Altius within three months from the exercise of the three
year Option to acquire the Snelgrove Lake Project; and
(vi) A gross sales royalty of 3% of revenue.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 13, 2012, 10:33:21 AM


The central banks of the world have just juiced the engine....big Ben was the last of the public announcements...all that is a hard asset will do very well from here...China, Europe, Japan have all announced big money printing efforts...south America who is in relatively decent shape have cut rates drastically.

Altius's assets will be in demand in the coming years...they are protected for inflation and stand to benefit from the stimulus...

We expect to see a huge amount of m&a to start in the resource sector to take advantage of real things. Altius stands to benefit on both ends....they may take advantage of the situation or someone will looking at taking them out...all that cash and no debt is the envy of the resource sector right now.

The central banks just juiced the system look out!

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Eric50 on September 16, 2012, 10:29:00 PM
Michael Pettit is not very optimist about commodity prices in his latest piece:

"For these reasons I am very pessimistic about hard commodity prices and expect them to drop substantially further in the next two to three years.

1. Production capacity for hard commodities is rising much too quickly, in a belated response to the unexpected surge in demand just under a decade ago.
 
2. Expected economic growth rates in the country that has been biggest source of new demand – virtually the only source – have fallen sharply and commodity prices have fallen with them. Historical precedents and the arithmetic of rebalancing suggest, however, that the current consensus for medium-term Chinese growth is still too optimistic. Expected growth rates will almost certainly fall further in the next two years.

3. Beijing has finally become serious about rebalancing China’s economy, and rebalancing means shifting Chinese growth away from being disproportionately commodity intensive.  Instead of representing 30-60% of global demand for most hard commodities, Chinese demand will shift to a more “normal” level. Remember that even a very limited shift – from 50% of global demand, for example, to a still high 40% of global demand – represents a sharp drop in global demand.

4. There has been so much stockpiling of commodities and finished goods with implicit commodity content in China that the country could well become a net seller, and not net a buyer, of a wide variety of commodities in the next few years."

http://www.mpettis.com/2012/09/16/by-2015-hard-commodity-prices-will-have-collapsed/
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 17, 2012, 06:02:57 AM

who is michael pettit?

We agree with Jim Rogers, Jeremy Grantham etc. whose beliefs contradict these statements not on capacity but on avalibale resources.

Dazel.
Title: Who is Michael Pettis?
Post by: GlennAS on September 17, 2012, 07:29:23 AM
Hi Dazel.

((who is michael pettit?))

Michael Pettis is a Senior Associate at the Carnegie Endowment for International Peace and a finance professor at Peking University’s Guanghua School of Management, where he specializes in Chinese financial markets. He is the most astute China watcher on the planet IMO. I have a post-doc economist friend who raves about Pettis. His website is China Financial Markets: http://www.mpettis.com/China Financial Markets (http://www.mpettis.com/China Financial Markets). His most recent post is By 2015 hard commodity prices will have collapsed: http://www.mpettis.com/2012/09/16/by-2015-hard-commodity-prices-will-have-collapsed/ (http://www.mpettis.com/2012/09/16/by-2015-hard-commodity-prices-will-have-collapsed/).

The China hard-landing/soft-landing has various advocates on both sides. Personally, I place more faith in Pettis that Jim Rogers. I have a lot of respect for Jeremy Grantham, but Pettis is much more plugged into the economic data in China than Grantham.

I really like the Altius story, but IMO if the global economy continues to trend downward in spite of the efforts of central bankers to stimulate through a ZIRP interest rate policy (pushing on a string?), I believe there's a very good possibility that I'll be able to pick up Altius shares at below $10.

IMHO. And I could be wrong. :)

Best wishes,
glenn
Title: Zerohedge on the Chinese Economy ...
Post by: GlennAS on September 17, 2012, 03:11:42 PM
On the topic of China, here's this post today from zerohedge: How China's Rehypothecated "Ghost" Steel Just Vaporized, And What This Means For The World Economy http://www.zerohedge.com/news/how-chinas-rehypothecated-ghost-steel-just-vaporized-and-what-means-world-economy (http://www.zerohedge.com/news/how-chinas-rehypothecated-ghost-steel-just-vaporized-and-what-means-world-economy).

While annecdotal in its broader implications, it wouldn't surprise me at all that underneath it all, China is equal part the credit-based casino that is the western financial system/economy.

BTW, I really like Altius as a management team and investment. But view the macro scene very bearishly.

glenn
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 17, 2012, 03:46:25 PM

thanks for the input on China.....we will all see how things play out there over a number of years...

dazel.


Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on September 17, 2012, 04:15:15 PM
Well first of all Zerohedge is always bearish.  Secondly, I'm not sure it logically follows that you should be bearish on commodities.

If steel inventories are being falsified, then technically that is bullish for steel.

If hyperinflation occurs, technically that is bullish for real assets.

On a practical level, the ghost inventories of steel suggest a high level of fraud in China.  In practice, we've seen from the Chinese reverse mergers that frauds are rampant and that there is adverse selection going on.  (Little penalties for committing fraud, not surprisingly, leads to rampant fraud.)
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on September 17, 2012, 04:20:32 PM
Well first of all Zerohedge is always bearish.  Secondly, I'm not sure it logically follows that you should be bearish on commodities.

If steel inventories are being falsified, then technically that is bullish for steel.

If hyperinflation occurs, technically that is bullish for real assets.

On a practical level, the ghost inventories of steel suggest a high level of fraud in China.  In practice, we've seen from the Chinese reverse mergers that frauds are rampant and that there is adverse selection going on.  (Little penalties for committing fraud, not surprisingly, leads to rampant fraud.)

I was just thinking the same thing. I was mad to have wasted 5 minutes of my time reading ZeroHedge.

BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: Studesy on September 17, 2012, 04:29:09 PM
Basing a buy decision on such macro commentary is basically trying to predict the bottom as opposed to a purchase based on a sufficient discount to IV. If such macro events do occur, it would be a good time to add to the position. 
Title: zerohedge - itsavaluetrap
Post by: GlennAS on September 17, 2012, 04:31:24 PM
Wow, lot's of negativity re: zerohedge apparently. I really appreciate their macro analysis. Go figure. ...

I linked to the zerohedge post not as a comment on commodities per se, more a comment on the fraudulent nature - in China and globally - of credit and collateral. Plus, the reference to "rehypothecation" is priceless - an analogy to the MF Global rehypothecation crisis.

The bearish case for commodities is simple - and the one that Michael Pettis (and Hugh Hendry) makes. That is simply overcapacity built for a unsustainable credit boom - complete with consequent misallocation of capital. I personally don't believe we're looking at hyperinflation. Even the recent QE-to-Infinity risk on trade seems way overblown to me. The Fed and central banks can print money and use it to buy crappy assets from banks (which is essentially what the unsteralized QE is), but they're having a much harder time stimulating the real economy and aggregate demand because the consumer is deleveraging - at least throughout the developed world. To me, a Minsky moment appears more likely than hyperinflation.

Of course, the alternative thesis is that unrelented central bank money printing will  cause hyperinflation, will somehow also stimulate aggregated demand, and this will support the price of commodities. It's not a view I share - at least not in the short-to-medium term. But it seems to be the consensus view IMO, and if I see evidence that's it's working in the data points, I'll be more than happy to change my view.


Yeah, you could argue that ficticious inventories of steel is bullish for steel. But I would argue that the negative implications for the credit system in China outweigh the bullish implications for steel.

Fascinating times to be sure.

Regards,
glenn
Title: Macro investing - Studesy
Post by: GlennAS on September 17, 2012, 04:40:44 PM
Studesy. So I know this is a value investor forum, and the macro picture is often treated as background noise compared to "underlying value", margin of safety, and other core value investing metrics.

But in my experience, combining value investing with macro credit analysis has been very fruitful. Like value investing, it can require a lot of patience, because just like Mr. Market can bee irrational when pricing a stock, he can be extraordinary irrational when pricing assets in the midst of a credit bubble.

Of course, the big problem when credit bubbles burst is the impact the lack of liquidity can have on the prices of financial assets - even assets with good "underlying value". Furthermore, the impact credit busts have on commodity prices, the cost of credit, etc. can really change underlying fundamentals.

Anyway, I view macro credit analysis as another tool in my toolbox to buy great businesses at distressed prices. So not so different really.

Regards,
glenn
Title: Re: Macro investing - Studesy
Post by: Studesy on September 17, 2012, 04:56:24 PM
Studesy. So I know this is a value investor forum, and the macro picture is often treated as background noise compared to "underlying value", margin of safety, and other core value investing metrics.

But in my experience, combining value investing with macro credit analysis has been very fruitful. Like value investing, it can require a lot of patience, because just like Mr. Market can bee irrational when pricing a stock, he can be extraordinary irrational when pricing assets in the midst of a credit bubble.

Of course, the big problem when credit bubbles burst is the impact the lack of liquidity can have on the prices of financial assets - even assets with good "underlying value". Furthermore, the impact credit busts have on commodity prices, the cost of credit, etc. can really change underlying fundamentals.

Anyway, I view macro credit analysis as another tool in my toolbox to buy great businesses at distressed prices. So not so different really.

Regards,
glenn

Glen.  My comment didn't clarify the fact that this is just my opinion.  I'm not stating that your method is wrong, but rather that I'm not smart enough to apply such detail to my own process.  If I could, I wouldn't have to sit on positions for many years to assume sufficient returns.  With the massive amounts of macro commentary out there, I would go crazy trying to merge it into my decision making pocess......I think it would pull me away from what I think is a disciplined approach.   I would rather buy with what I think is a sufficient MOS.......and wait.....not time.
Title: Macro - studesy
Post by: GlennAS on September 17, 2012, 05:07:09 PM
((Glen.  ... I think it would pull me away from what I think is a disciplined approach.  I would rather buy with what I think is a sufficient MOS.......and wait.....not time.))

Completely understand your pov. Tis' true. Security analysis is difficult enough without decyphering the complicated and challenging macro domain.

Best wishes,
glenn
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on September 17, 2012, 07:01:02 PM
Quote
Wow, lot's of negativity re: zerohedge apparently. I really appreciate their macro analysis. Go figure. ...
Sorry I didn't mean to crap on Zerohedge like that.  They do post interesting stuff from time to time.  However, I take their articles with a grain of salt because they are always bearish.

2- As far as the macro picture goes, I personally believe that it's better to stick to the more obvious macro calls.  Otherwise you might be focusing too much on the noise?

The biggest risk that Altius faces is not a massive, terrible collapse in the Chinese economy (which is unlikely anyways... they are a creditor nation).  Their biggest macro risk is probably iron ore prices... supply has gone up dramatically in the past several years and more supply is coming online (everybody is expanding production).  Eventually there will be a wave of overbuilding and things could get ugly, like what happened in the drybulk sector.
Title: China, iron ore, etc. - ItsAValueTrap
Post by: GlennAS on September 17, 2012, 09:10:05 PM
(smile) No problem on the zerohedge front. They certainly do have a persistently bearish undertone.

((As far as the macro picture goes, I personally believe that it's better to stick to the more obvious macro calls.))

A lot of different ways to invest/speculate/manage risk. I like to make timely bets on tail events. If I stuck to what was obvious, I'd never make any money! LOL!

((The biggest risk that Altius faces is not a massive, terrible collapse in the Chinese economy (which is unlikely anyways... they are a creditor nation). ))

I think that is a flawed statement. The US was the world's largest creditor nation in the 1920's too. There were those that argued in the 1920's that "the US cannot face a terrible collapse in their economy because they are a creditor nation". The problem in the US in the 20's - and I think a case could be made re: China today - is that the US supressed interests rates in the 1920's (to artifically support the British pound) which led to a massive speculative bubble, massive overcapacity, and a huge amount of misallocated capital. China is showing many of the same problems in their banking sector (official and shadow).

I agree that additional supply is already in the pipeline which could contribute to overcapacity (although many of these projects may not see the light of day). But in China, there's already been significant misallocation of capital in infrastructure and real estate - Hugh Hendry has a nice piece on this from April: http://www.scribd.com/doc/91764042/April-2012-TEF-Commentary (http://www.scribd.com/doc/91764042/April-2012-TEF-Commentary).

Anyway, I'm not religious the trajectory of China one way or another. I do, however, think there's downside risk that may not be fully appreciated by the market. But maybe I'm wrong. Maybe money printing can truly solve all the world's problems. ;)

FWIW.
glenn
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 18, 2012, 12:08:53 PM
"The biggest risk that Altius faces is not a massive, terrible collapse in the Chinese economy (which is unlikely anyways... they are a creditor nation).  Their biggest macro risk is probably iron ore prices... supply has gone up dramatically in the past several years and more supply is coming online (everybody is expanding production).  Eventually there will be a wave of overbuilding and things could get ugly, like what happened in the drybulk sector"

iron ore prices have dropped in half....we had tsunami in japan that destroyed the uranium market....that is why Altius is trading where it is...so short term these are negative factors because the market gives 0 valuation on the huge iron ore and uranium deposits that they stand to collect royalties on..."they have had the risk happen"...that is why they held on to their cash...

These are big events and they both together have surpressed the future production that everyone was suspecting in iron ore market (the market expected expanding production...it is being curtalied!) and the uranium market well that fell off a cliff. This what Jim Rogers has been talking about....it is not that world is in great shape.

His Bet
A)If the world economies slowed down governments would print money and future mine production would be curtailed. B)If the world economy was strong they would use the commodities in demand.

A) happened. They are printing money while massive production cuts in iron ore accross the globe have happened....uranium is already 18 months into the curtailment of uranium...and quite frankly I am quite excited by the uranium dynamics.

Altius has fortress of cash to wait it out and possibly benefit more from increased investment...either way the share count will be way down when both Paladin and Alderon begin production...

You want to bring a mine on during low prices...and sell your product at high prices...that is what we are looking at...the stimulus of all central banks will take time to kick in...Altius will stand to benefit when this happens....

dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 18, 2012, 01:31:08 PM
http://www.ft.com/cms/s/0/677bd13a-01a9-11e2-8aaa-00144feabdc0.html#axzz26r10M5hI


we are hoping that the quick rebound in pricing does not change the announced curtailment of iron ore production and the our scenario in the previous post plays out...


Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 18, 2012, 02:01:53 PM
http://www.resourceinvestor.com/2012/09/17/uranium-fundamentals-are-at-tipping-point-alka-sin?page=2

good interview on the uranium market.

her top pick Paladin Energy.

Dazel.

Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on September 25, 2012, 08:43:17 AM
Some news from Alderon:

http://www.alderonironore.com/_resources/news/2012-09-25-NewsRelease.pdf
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on September 30, 2012, 06:27:31 AM
http://www.grandich.com/wp-content/uploads/2012/09/ADV092512.pdf


On Alderon.
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on September 30, 2012, 10:16:30 PM
Dazel, I am curious.

#1- What's your opinion on all the analysts on being so incredibly bearish on iron ore prices in the long term?

Most analysts do this for gold too... which I find to be weird.  And then on the oil side, apparently analysts are very bullish.  I'm not sure if the mining analysts factor in higher production costs in the future... but together they are saying that iron ore prices will crash and production costs will go up.  And they are telling clients to buy!  What a bizarre world.

#2- Does Grandich being a shill bother you? 
Is this a value investing message board or a pump and dump message board?  :P
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on October 01, 2012, 01:57:46 AM

It's a value trap,

#1.  And #2.    We do our own work....I had no comment on the Dundee piece on Alderon....they are hardly bearish with a target price of $6...but the information posted is for people to make their own opinion...(grandich) we take newsletter writers and analysts with a grain of salt. We like facts to make our own decisions...unfortunately there is not a lot of information on companies like Altius or their assets so we are trying pass on information that's all.
In fairness a lot of the negativity in the industry has been related to short selling...Some of it warranted some of it not...either way it is hype....the investor has to be able to sort through the bullshit and make a decision for themselves. Compared to to he absolute travesty of analyst pushing the "Groupons of the world"....Morgan Stanley et all....the entire junior mining market would have been lost in the $8 billion market cap evaporated by the Groupon scam! Sorry you have me ranting.

Back to the point....
So in this case what is the Alderon assets worth and how much is the royalty worth to Altius. That is
all we care about. My next post is fact....a takeover offer rejected from steel producers...that is what we like...what are the assets worth to a business...not newsletter, analysts, hedge funds...Posco
owned by Warren Buffett has made the offer....that gives a barometer of what we think The Alderon
asset and subsequent Altius royalty is worth now and what it will be worth as a producer. Hope that helps.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on October 01, 2012, 02:02:32 AM
http://www.iol.co.za/business/companies/australia-s-arrium-rejects-1bn-bid-1.1393090#.UGlUHaN5mSM

Some takeover action in the steel market....we like to see that it is Posco (steel producer from Korea owned by Warren Buffett) doing the bidding with the Korean pension funds...operators are seeing some value in the iron ore industry.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on October 10, 2012, 02:18:10 AM
http://www.canadianinsider.com/node/7?ticker=ALS

Altius share count continues to fall.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on October 10, 2012, 02:22:48 AM
http://www.reuters.com/article/2012/10/10/markets-ironore-idUSL3E8LA18B20121010


Iron ore Spot price is back above $110....


Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: FFHWatcher on October 10, 2012, 05:12:09 AM
http://www.canadianinsider.com/node/7?ticker=ALS

Altius share count continues to fall.

Dazel

If these shares that they repurchase come through public markets (I assume), why aren't they showing up or matching up in daily volumes?  Perhaps they buy small amounts daily and then cancel them at the end of each month?  For example, that report shows the trade date as Sept 30th at 103,464 shares.  1/ Sept 30th was Sunday.  2/ 103,464 is more than the daily trading volume for everyday except for Aug. 28th. 

Perhaps they are issuing shares internally for options, etc. and then simply using cash to buy back the shares at market prices, although Sedi.ca does show them as Public Market transactions.  Altius is coding the transactions as "NCIB - returned to Treasury" which makes sense.

Either way, good news that share count is falling
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on October 10, 2012, 05:31:38 AM
If these shares that they repurchase come through public markets (I assume), why aren't they showing up or matching up in daily volumes?  Perhaps they buy small amounts daily and then cancel them at the end of each month?  For example, that report shows the trade date as Sept 30th at 103,464 shares.  1/ Sept 30th was Sunday.  2/ 103,464 is more than the daily trading volume for everyday except for Aug. 28th. 

Perhaps they are issuing shares internally for options, etc. and then simply using cash to buy back the shares at market prices, although Sedi.ca does show them as Public Market transactions.  Altius is coding the transactions as "NCIB - returned to Treasury" which makes sense.

Either way, good news that share count is falling

It seems what is happening is that Altius is reporting share redemption and shares acquired in the open market one time at the beginning of each month.  Those are most likely monthly totals under their repurchase plan.  There is generally a slightly different amount reported (103k/87k this month and 64k/69k last month) which might be related to purchase date/settlement date differences.  If there are +/- 20 business days in a month then 5k shares per day would be around 100k shares per month.  This fits with both the daily volume, and the price support at 10.  It seems like whenever the share price is below 11 they buy back close to their daily limit which I think (no link) is around 5k shares.   Like you said whatever the details, the important point is share count continues to fall. 
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on October 10, 2012, 10:40:09 AM
http://altiusminerals.com/press-releases/view/259


Altius has an automatic purchase program so they are able to purchase shares while management is in possession of material information....

Brokers are only allowed to buy a certain percentage of daily volume and the shares repurchased are redeemed at months end....

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Eric50 on October 10, 2012, 12:12:46 PM
Dazel -

I'm surprised Altius hasn't used the steep correction in the Canadian resource sector this spring/early summer to take new positions and make its cash work. I think that's also something you expected as per your previous comments.

It's not that I don't like the buybacks at this price. I'm just surprised they haven't used their cash earlier this year to take advantage of the opportunities that were there and I'd be curious to get your opinion on that.

thanks in advance

Eric
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on October 10, 2012, 12:39:10 PM
Dazel -

I'm surprised Altius hasn't used the steep correction in the Canadian resource sector this spring/early summer to take new positions and make its cash work. I think that's also something you expected as per your previous comments.

It's not that I don't like the buybacks at this price. I'm just surprised they haven't used their cash earlier this year to take advantage of the opportunities that were there and I'd be curious to get your opinion on that.

thanks in advance

Eric

I'm surprised too, especially after the "bring on the bloodbath" interview many months ago.
Title: Re: ALS.TO - Altius Minerals
Post by: Green King on October 10, 2012, 03:02:01 PM
maybe its happening and we just don't see it.
The reason most of us got in is because of the good management right ?
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on October 10, 2012, 03:07:50 PM
Maybe it's because they are smart and are waiting around for the fat pitch.

Yes the share prices of juniors have gone down but they were coming down from levels of overvaluation.
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on October 10, 2012, 03:50:36 PM
Look at how Altius has made money in the past.  It wasn't from investing in juniors.  It was from:

A- Buying royalties instead of equity.  Look at all the people who have made personal fortunes in mining.  Teck is one of the rare cases where somebody (Norman Keevil) made a fortune from from equity.  Whereas Lassonde, Schulich, and Dalton made a lot of money from royalties.  The problem with equity is that the equityholders in mines regularly do dumb things.  They chase projects with low rates of returns (e.g. practically the entire gold industry), engage in empire building, have to compete with the publicly-traded miners who bid against you on acquisitions, etc.  And the junior explorers (in aggregate) are huge destroyers of capital.

B- Staking land *when it was cheap*.  That's why Altius is saying "bring on the bloodbath".  It's because they have this huge stash of cash and they want to buy land when it is cheap.  Land may not be cheap right now.  Dalton was visiting China probably because he was trying to "sell" Altius' iron ore land positions through joint venture deals (these JV deals are a subtle form of selling).
This is a business where Altius cannot deploy a lot of capital but has generated obscene returns.

C- Selling shares when they were expensive, buying them back when they were cheap.

And look at what Altius has NOT done.  They have largely avoided the business of exploration (exploration stocks have negative ROI in aggregate).  They have largely avoided the business of developing, building, and owning mines.  That's smart in my opinion as those aren't great businesses.
Title: Re: ALS.TO - Altius Minerals
Post by: Green King on October 10, 2012, 03:53:33 PM
Look at how Altius has made money in the past.  It wasn't from investing in juniors.  It was from:

A- Buying royalties instead of equity.  Look at all the people who have made personal fortunes in mining.  Teck is one of the rare cases where somebody (Norman Keevil) made a fortune from from equity.  Whereas Lassonde, Schulich, and Dalton made a lot of money from royalties.  The problem with equity is that the equityholders in mines regularly do dumb things.  They chase projects with low rates of returns (e.g. practically the entire gold industry), engage in empire building, have to compete with the publicly-traded miners who bid against you on acquisitions, etc.  And the junior explorers (in aggregate) are huge destroyers of capital.

B- Staking land *when it was cheap*.  That's why Altius is saying "bring on the bloodbath".  It's because they have this huge stash of cash and they want to buy land when it is cheap.  Land may not be cheap right now.  Dalton was visiting China probably because he was trying to "sell" Altius' iron ore land positions through joint venture deals (these JV deals are a subtle form of selling).
This is a business where Altius cannot deploy a lot of capital but has generated obscene returns.

C- Selling shares when they were expensive, buying them back when they were cheap.
+1
Title: Re: ALS.TO - Altius Minerals
Post by: nostradamus on October 11, 2012, 11:15:14 AM
Hello all

I have been following the discussion on this board for a while now and thought it was about time for me to contribute. But first a disclaimer: I have quite a sizable investment in Altius and I know next to nothing about mining. So I am both biased and uninformed.

Anyway there are a couple of things I have noticed recently that I don't think have been posted:

First off, some recent news on Julienne lake:

http://www.thetelegram.com/News/Local/2012-10-10/article-3096301/Call-for-expressions-of-Interest-for-Julienne-Lake-development/1

I guess that the Altius management had flagged that this was anticipated, but the announcement is clearly positive. As I said at the outset, I don't really know anything about mining, but if the goverment is encouraging a developer to spend a huge amount of money to turn their property into a mine, it seems to me that the developer would want to make that capex go a bit further by aquiring the right to mine the adjacent (submerged) land that altius owns as well. I assume we will hear more about this when altius reports back on the outcome of their 2012 winter drill programme.

Secondly, I came across this presentation:

http://altiusminerals.com/uploads/RIF-2012.pdf

It includes a few things that I had not seen before. 1. info on the Chile expansion, 2. a statement that they intend to dividend out the Kami royality cash flow, 3. their own NAV calculation of the current value of the Voissey Bay and Kami royalities (C$172m).

Regarding point 2. They project a royality of C$55.2m by 2017 on Kami. Divide this by the 28,759,675 shares outstanding give a dividend of C$1.91 per share, or a yeild of around 18% at current prices!

Regarding point 3. Take a look at the slide on their capital structure. I think this means that if you just consider the cash, marketable securities and two royalities (Voissey and Kami), you get a valuation of 182 + 114 + 172 = C$468m or 16.27 per share. Ie just these aspects of the business are worth about 60% more than the current share price.

Then there is all the potential from their other interests, eg CMB royalty and Julienne lake.

I think this stock might be cheap.

N.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on October 11, 2012, 02:16:20 PM
Nostradomus, thanks for posting presentation.

If they think they will dividend out $55 million from Kami I wonder why they are allocating only $172 million to NAV (internal valuation)

Wow, $1.91 per share in dividends- I was not banking on this- I'll take it.

I am not sure where that presentation was made (made in Sept 2012) but certainly I don t think that this story is known by the market as the shares still sell in low volume without much upward price movement, not that I care. Will be fairly priced when 2015 comes when + if they have Kami operating as projected

ALS is slowly becoming one of my larger holdings.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on October 11, 2012, 02:27:58 PM
http://altiusminerals.com/uploads/2012-Sept-Chicago.pdf

another similar presentation posted Oct 1 at "Chicago Hard Asset Conference" with similar info.

$1.90 dividend projected for 2017- who knows what will happen by then- in the long run I think hard assets are going to be worth more than today- being able to collect the royalty you don t have to worry about the increasing cost to mine the stuff.
Title: Re: ALS.TO - Altius Minerals
Post by: Ross812 on October 11, 2012, 02:36:09 PM
How many tons of iron can Alderon produce? The release this morning suggested 8 million tonnes? 4.8 million tones purchased by Hebei for 95% the market cost. Lets assume $100/ton so Alderon is now making at least grosses 456 million. Altius gets 13.7 million? ($100*95%*4.8*3%) DCF discounted at 11%, 0% growth. The 3% royalty is worth 124 million on the extreme low end...
At $140 per ton 8 million per year the royalty is worth 305 million...

Voisey .3% Royalty, 2.25 million per year
0% growth, 11% discount 20 million


I came up with this a while ago. I came up with a royalty value between 125 and 300 million. At this point it's all speculation. Will kami be completed? What will the discount rate be? What is the level of production? What is the iron ore price? Your number seems on the low side of my range, so they may be being a little conservative. I'm not sure where the 55 million royalty is coming from...
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap 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.
Title: Re: ALS.TO - Altius Minerals
Post by: Ross812 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.

-Ross
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel 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.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap 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.
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron 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
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on October 12, 2012, 02:20:35 PM
Hey I preach inequality!  :P
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel 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.
Title: Re: ALS.TO - Altius Minerals
Post by: nostradamus 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.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel 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.
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap 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?
Title: Re: ALS.TO - Altius Minerals
Post by: nostradamus on October 26, 2012, 01:57:24 AM
Does anyone have any views on what the 3rd Quarter results for Cliffs means for the viability of Kami?

I am particularly thinking of the cost per ton of nearby mining operations:

Cash cost per ton in Eastern Canadian Iron Ore was $106.06, up 21% from $87.37 in the year-ago quarter. The increase reflected higher cash costs at Wabush Mine of $132 per ton, up 25% from the prior year's comparable quarter, due to higher labor costs and increased spending related to maintenance and repairs. Additionally, third-quarter 2012 cash costs at Bloom Lake Mine were $88 per ton, up 18% from the year-ago quarter, primarily driven by higher fuel, contract labor, and maintenance and supply costs. Cliffs indicated Bloom Lake Mine's cash costs per ton have improved over second-quarter 2012 results primarily due to increased production throughput rates at the mine.

http://ir.cliffsnaturalresources.com/releasedetail.cfm?ReleaseID=716089

Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on October 26, 2012, 05:01:02 AM
Bloom Lake's opex was $88 per ton for the quarter.

The Wabush mine has ore that is very high in manganese content.  I'm not sure but I think that Cliffs may be mixing the cleaner ore from BL with the Wabush ore to have a product that is reasonable in manganese levels.  So maybe you could just assume that Kami's ore will sell at a similar price to Cliffs' Eastern Iron ore operations...?  *BUT* that price is for 1/3 of the product being pellets, which has a higher price than fines.  With Cliffs, the operations produce a lot of (super) fines that are turned into pellets.  Kami may get a lower price without a pellet plant.

Revenue for the quarter was $110 per ton

Royalties and offtake will be at least $7 (it's 6% at 8MT/yr, slightly higher if it turns out to be like BL and production turns out to be 7MT/yr)

----
Capital cost of $989M, mine life 15.3 years. 
http://www.alderonironore.com/projects/kami/

simple D&A calculation
$1000M / 15 years / 8MTperYear = $8.33/ton D&A
-production might end up at 7MT
-cost inflation may push capex higher (actually you could probably read consolidated thompson's financials and cliffs' financials and figure out the real capex)
-mine life may be longer than 15 years

So at current prices:
$110 revenue
$88 opex
$6.6 royalty+offtake
$8.33 D&A

You have a profit of about $7.07 / ton on revenue of $117.  At 6% profit margin, I don't think this will go into production...?

Of course I am probably off by a lot... this is just a rough back of the envelope calculation.  Alderon will spend at least several million dollars on feasibility studies.  A real mining company would do due diligence that retail and institutional investors aren't doing if they wanted to buy this.
Title: Re: ALS.TO - Altius Minerals
Post by: Ross812 on October 26, 2012, 07:42:14 AM
Regarding Manganese content from Alderon Iron Ore Corp. NI 43-101 Technical Report:

The chemical analysis for the Kami concentrate, previously presented in Table 13.11, offers
mostly positive characteristics having a low concentration of the most typical gangue elements.
Silica levels are in line with those for concentrates from Mount Wright (4.5%) and Carol Lake
(4.2%). The sulfur level of 0.053% is indicated to be marginally higher than the acceptable limit
in Europe which is 0.050%. The Mn level is elevated and exceeds acceptable levels in many BF
operations. The expected MnO and S levels of the Alderon concentrate will make this product
difficult to market in Europe.

Stantec's Conclusions:

19.8 Conclusions
Considering that:
 The Kami concentrate may contain a higher proportion of fines than what is normally used
as a sinter feed;
 The Kami concentrate can be considered as a standard quality concentrate, with normal
silica levels, high-end sulfur levels and higher than standard manganese content;
 The Chinese market is the largest consumer of sinter feed material and the fastest growing
in demand;
 The Chinese market has the least quality restrictions.
It can be concluded, at this stage of the Project, and based on the information available to date,
that the most appropriate marketing strategy for Alderon is to actively explore and pursue
commercial opportunities with potential Chinese Customers.
Title: Re: ALS.TO - Altius Minerals
Post by: Ross812 on October 26, 2012, 08:39:15 AM
Table 21.2: Total Estimated Average Operating Cost ($/t concentrate)

Mining                                              20.36 $
Concentrator                                     6.28 $
Site Infrastructure (incl. Garage)          0.55 $
General Administration                       1.77 $
Environmental and Tailings Management 0.32 $
Rail Transportation                            13.51 $
Port Facilities                                    2.08 $
TOTAL                                             44.87 $

The accuracy range for the Capital Cost Estimate and the Operating Cost Estimate developed in this
Study is -20%/+30%.

So lets assume +30% = $58.33/ton OPEX + Royalties 6% of $120/ton = $65.53/ton

Bloom Lake's opex was $88 per ton for the quarter.

The Wabush mine has ore that is very high in manganese content.  I'm not sure but I think that Cliffs may be mixing the cleaner ore from BL with the Wabush ore to have a product that is reasonable in manganese levels.  So maybe you could just assume that Kami's ore will sell at a similar price to Cliffs' Eastern Iron ore operations...?  *BUT* that price is for 1/3 of the product being pellets, which has a higher price than fines.  With Cliffs, the operations produce a lot of (super) fines that are turned into pellets.  Kami may get a lower price without a pellet plant.

Revenue for the quarter was $110 per ton

Royalties and offtake will be at least $7 (it's 6% at 8MT/yr, slightly higher if it turns out to be like BL and production turns out to be 7MT/yr)

The Washburn Mine produces Hematite which is much harder (i.e. more expensive) to concentrate than Alderon's ore which is 70% magnetite.

This may help:
http://www.mineralresource.info/2012/08/24/iron-ore-looking-beyond-grade/
Title: Re: ALS.TO - Altius Minerals
Post by: Ross812 on October 26, 2012, 08:58:30 AM
Kami ore is also 65.5% Fe which means it would be priced at a premium to the 62% Platt price. This is about +$5-5.50/%. Which means Kami ore could fetch a price at Platt + $17.5. Hebei was smart when they locked in a price at 95% Platt. Manganese levels do not particularly matter when selling to China. Sulfur levels are just outside the range of what is acceptable in Europe (6% too high), but they are not selling to Europe anyway. Prices for ore are negotiated directly; Hebei gets preferential treatment at 95% Platt. I don’t think other companies are going to get this sweet heart deal. I would look for Platt + $5-17 for everyone else. 
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on October 26, 2012, 12:02:36 PM
The same technical report calls for quality deductions of $15/ton.  Unfortunately, it seems like nobody on this forum knows how smelter/quality deductions are calculated.

2- The big issue is that these technical reports are a joke.  BBA did technical report work for Consolidated Thompson when it owned Bloom Lake and before Cliffs bought out CT.  The BBA technical report wasn't even close... it projected opex below $40/ton.  This quarter it is around $88/ton.  (How cash costs and operating costs are defined can make a difference... but does not explain the entire difference.)

Guess who is doing technical report work for Alderon?  BBA.

*I also own Altius.
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on October 26, 2012, 12:19:13 PM
Opex of $44/ton would put Kami among the lowest-cost deposits in the world (ones with grades far higher than Kami and requiring less or no beneficiation) and HALF of what Bloom Lake's opex is.  This is extremely unlikely.

If anything you would figure that Kami will come in with opex a shade higher than BL as it will spend more money on the metallurgy to get the manganese content down. 

*I don't like juniors.  So many lies.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on October 26, 2012, 12:31:30 PM
added some @ $10.20 this afternoon.

Further weakness in price to follow I am sure. Hope to average in a bit more.

I like the net cash

I like the royalties (protection from the eventual inflation)
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on October 29, 2012, 02:59:54 AM

Cliffs natural have had operational issues at their eastern iron ore mines...the bloom lake operations have changed their longterm marketing strategy to producing a higher end premium product. This change took cash costs above $100 per ton in the second quarter...because of the costs and lower volume....that came down to $88 per ton this quarter and will continue downward. In other words they had problems with production and have changed operational focus at Bloom Lake...management does not like to say we "screwed up" but it looks like they have and are coming back from that....with cash cost dropping considerably this quarter...

The operators matter as we know...taking a rough patch from a mine and saying  those cash costs are the normal is just silly. Things go wrong equipment malfunctions etc...and we had a huge drop in the price of iron ore during the same period...as an operator you are not going to try to push through more volume...you slow production and take the time to fix problems.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Ross812 on October 29, 2012, 06:53:04 AM
The same technical report calls for quality deductions of $15/ton.  Unfortunately, it seems like nobody on this forum knows how smelter/quality deductions are calculated.

2- The big issue is that these technical reports are a joke.  BBA did technical report work for Consolidated Thompson when it owned Bloom Lake and before Cliffs bought out CT.  The BBA technical report wasn't even close... it projected opex below $40/ton.  This quarter it is around $88/ton.  (How cash costs and operating costs are defined can make a difference... but does not explain the entire difference.)

Guess who is doing technical report work for Alderon?  BBA.

*I also own Altius.

I did a looked into your reference to $15 quality deductions. You got that from Table 16.2 Pit Optimization Parameters. $15 for quality deductions is actually the cost of beatification of the ore. This is not a cost deduction to the processed ore. The $15 quality deduction is accounted for in table 21.2 I previously cited. Table 16.2 is identical to table 21.2, just in a different form. To read the pit optimization table:

Add the operating costs for the mined raw ore:
Mining Cost (Ore, Waste) $2.10 + Mining Cost (OB) $1.05 + Processing Cost $1.95 + General and Administration (G&A) $1.13 = 6.23 $/t raw unprocessed ore.

The weighted recovery is 37%. Divide the unprocessed ore by 37% to get to processed ore cost per ton:
$6.23/0.37 = 16.84 $/t processed 30% Fe

Now its time to beneficiate (concentrate) the ore to take it from ~30% Fe to 65.5% Fe:

$16.84 + $15 (Quality Penalty – smelter deduction) = 31.84 $/t FeCon

Add in Port $3/t and Rail $10/t costs and we get 44.84 $/t which is the estimated cost in table 21.2.

Hebei is not stupid. They would not have negotiated a price of 95% Platt if they could get Platt - $15. The Platt price is based off 62% Fe. Alderon ore is 65.5% which would fetch a premium of Platt + $5/%Fe if pricing gets really competitive. Using Platt for the product price assumption seems pretty reasonable and a little conservative.
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on October 29, 2012, 11:52:40 AM
Quote
Add the operating costs for the mined raw ore:
1a- Mining Cost (Ore, Waste) $2.10 + Mining Cost (OB) $1.05 + Processing Cost $1.95 + General and Administration (G&A) $1.13 = 6.23 $/t raw unprocessed ore.
There is a difference between $/t mined, $/t milled, and $/t FeCon.

Of everything that is mined, some of it is waste and goes to the waste pile.
Of everything that is milled, some of it is waste tailings and goes to the tailings storage.
And then you have your iron ore concentrate.

1b- The mining costs are different for ore/waste and overburden.  You don't add both costs up together.

2- The pit optimization may use more conservative assumptions than the economic assessment.  This is so if the ore price falls, you won't have a pit that was optimized for a higher price and you lose even more money.

Quote
Hebei is not stupid. They would not have negotiated a price of 95% Platt if they could get Platt - $15. The Platt price is based off 62% Fe. Alderon ore is 65.5% which would fetch a premium of Platt + $5/%Fe if pricing gets really competitive. Using Platt for the product price assumption seems pretty reasonable and a little conservative.
The way the benchmark pricing works is that it is a price for iron ore of a certain quality.  It will have limits for the levels of impurity in the product... Alderon's ore likely exceeds that.

What normally happens is that the price will be reduced for impurities (e.g. smelter deductions) and increased/decreased for iron content above/below the 62% level.  The smelter deductions will be linked to the level of impurities.  We don't know what the exact level of impurities will be (since there are uncertainties as to resource estimation and metallurgy).  The level of impurities may vary from shipment to shipment (it varies within the ore deposit).  So if Hebei is smart, they will link their price to the level of impurities in the ore.  This will protect them.

Otherwise Alderon could buy extremely low-quality ore from somebody else and sell that to Hebei.

So basically, Hebei will be getting 95% of Platt + adjustment for iron content - quality penalties / smelter deductions for manganese (and sulfur).

I don't know if the quality penalties will be $15/ton.
Title: Re: ALS.TO - Altius Minerals
Post by: Ross812 on October 29, 2012, 01:08:43 PM
Quote
Add the operating costs for the mined raw ore:
1a- Mining Cost (Ore, Waste) $2.10 + Mining Cost (OB) $1.05 + Processing Cost $1.95 + General and Administration (G&A) $1.13 = 6.23 $/t raw unprocessed ore.
There is a difference between $/t mined, $/t milled, and $/t FeCon.

Of everything that is mined, some of it is waste and goes to the waste pile.
Of everything that is milled, some of it is waste tailings and goes to the tailings storage.
And then you have your iron ore concentrate.

1b- The mining costs are different for ore/waste and overburden.  You don't add both costs up together.

2- The pit optimization may use more conservative assumptions than the economic assessment.  This is so if the ore price falls, you won't have a pit that was optimized for a higher price and you lose even more money.

Quote
Hebei is not stupid. They would not have negotiated a price of 95% Platt if they could get Platt - $15. The Platt price is based off 62% Fe. Alderon ore is 65.5% which would fetch a premium of Platt + $5/%Fe if pricing gets really competitive. Using Platt for the product price assumption seems pretty reasonable and a little conservative.
The way the benchmark pricing works is that it is a price for iron ore of a certain quality.  It will have limits for the levels of impurity in the product... Alderon's ore likely exceeds that.

What normally happens is that the price will be reduced for impurities (e.g. smelter deductions) and increased/decreased for iron content above/below the 62% level.  The smelter deductions will be linked to the level of impurities.  We don't know what the exact level of impurities will be (since there are uncertainties as to resource estimation and metallurgy).  The level of impurities may vary from shipment to shipment (it varies within the ore deposit).  So if Hebei is smart, they will link their price to the level of impurities in the ore.  This will protect them.

Otherwise Alderon could buy extremely low-quality ore from somebody else and sell that to Hebei.

So basically, Hebei will be getting 95% of Platt + adjustment for iron content - quality penalties / smelter deductions for manganese (and sulfur).

I don't know if the quality penalties will be $15/ton.

You're right here is the corrected Pit Optimization Costs:

Let’s look at the system as a whole:

From Table 16.6, Applying Costs from 16.2:

Step 1 - Remove overburden:
46,766 Kt * 1000 t/Kt * 1.05 $/t = $49 million

Step 2 – Mining Ore and Waste Rock:
Kt Mined Ore + Kt Mined Rock= (335,128 + 711,853) * 1000 t/Kt * 2.10 $/t = $2.198 Billion to produce 335,128 Kt of Ore

Step 3 – Process the Ore:
335,128 Kt * 1000 t/Kt * (1.95+1.13) $/t = $1.032 Billion to produce:

335,128 Kt * 37% Weighted Recovery = 123,997 Kt of FeCon

So adding all this up we get:
$49M + $2198M + $1032M = $3279M to produce 123,997 Kt of FeCon so production OPEX is:

$3279M/(123997 Kt * 1000 t/Kt) = 26.44 $/t

This is equal to Table 21.2 Mining + Concentrator Cost (20.36+6.28) = 26.64 $/t (within rounding error)
Title: Re: ALS.TO - Altius Minerals
Post by: Ross812 on October 29, 2012, 02:10:36 PM
Smelter deductions as far as I can tell don’t really come into play with respect to iron ore. Smelter credits/deductions are given to compensate the smelter for waste above a certain benchmark. For iron smelting this is usually in the form of credits or deductions above an agreed upon %Fe. The factory has to use the same amount of energy regardless if 58% Fe or 64% Fe ore is used and the recovery from 58% Fe ore is lower and waste higher so a credit/debit is given in the form of $5/%Fe to compensate. Sulfur and Manganese are not smelter deductions because they are actually incorporated into the steel (not a waste product).  Quality deductions may come into play. Most European iron ore contracts I could find state a max allowed sulfur % at 0.05. As far as Manganese goes, 0.4-1.1% is desirable. Alderon ore will have 1.6% Manganese and .053% sulfur which means it will probably be blended with lower manganese/sulfer/fe content ores during sintering. The ore as-is is acceptable to make steel in China, but blending a lower quality 60% Fe Indian ore with Alderon’s 65.5% Fe ore would create a product that could be sold in Europe. Manganese does not start affecting the quality of the steel produced until ~4%. 65.5% Fe 1.6% Mn or can only produce 2.45% Mn steel. Sulfur and the grain size distribution are the two main detractors to this ore’s marketability. 
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on October 29, 2012, 03:11:04 PM
Quote
Manganese increases hardenability and tensile strength of steel, but to a lesser extent than carbon. It is also able to decrease the critical cooling rate during hardening, thus increasing the steels hardenability much more efficient than any other alloying elements. Manganese also tends to increase the rate of carbon penetration during carburizing and acts as a mild deoxidizing agent. However when too high carbon and too high manganese accompany each other, embrittlement sets in. Manganese is capable to form Manganese Sulphide (MnS) with sulphur, which is beneficial to machining. At the same time, it counters the brittleness from sulphur and is beneficial to the surface finish of carbon steel.
 
For welding purposes, the ratio of manganese to sulphur should be at least 10 to 1. Manganese content of less than 0.30% may promote internal porosity and cracking in the weld bead, cracking can also result if the content is over 0.80%. Steel with low Manganese Sulphide ratio may contain sulphur in the form of iron Sulphide (FeS), which can cause cracking (a “hot-short” condition) in the weld
http://www.leonghuat.com/articles/elements.htm

It seems that the ideal level of manganese is different for different types of steel?  For steel that will be welded, manganese should be lower than 0.8%.  There are other types of steel where more manganese is better.... most of the world's manganese mined is used as a additive for steel.

2- The Platts index specifies sulphur below 0.02% for one of its indexes but not the others.
PDF of the specification here:
http://www.platts.com/IM.Platts.Content/MethodologyReferences/MethodologySpecs/ironore.pdf

Beyond that the index would make some kind of adjustment to normalize for the difference in quality.

3- Strathcona wrote a report for the government regarding the Wabush mine and problems with the manganese content in its ore.

Quote
The manganese content in the ore, which is a specific characteristic of the Scully Mine deposits,
is the primary market limitation to exploiting more of the remaining resources than is currently
planned and that are not included in the most recent reserve estimates.
Cleveland-Cliffs Inc., as the managers of the Wabush Mines joint venture, have been examining
the possibility of installing a manganese reduction plant and if feasible this project could allow the
current blend of pellet products to be produced through to 2021.  Encouragement and support for
this endeavour should be given by all stakeholders because of the significant benefits of extended
mine life for the employees of Wabush Mines and the community of Wabush

Cliffs bought out its other partners in the mine and installed a manganese separation plant.
Title: Re: ALS.TO - Altius Minerals
Post by: Green King on October 29, 2012, 03:26:40 PM
Quote
3- Strathcona wrote a report for the government regarding the Wabush mine and problems with the manganese content in its ore.

http://www.nr.gov.nl.ca/mines&en/publications/wabush-memo-v3.pdf

Can you explain again how the high manganese matter ?

If you can just blend or build one of those plants for 40 million ?
sorry i am very new to the sector. It was very hard to keep up. :(
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on October 29, 2012, 03:52:45 PM
"Cleveland-Cliffs have previously examined the possibility of installing a manganese reduction plant
that would reduce the manganese content of ore processed to allow production of the current pellet
products to continue, with their manganese content of either 1.2% or 2.0%, from ores that would
contain up to 4.0% manganese."

from with in the old Strachcona report.

Alderon is at 1.6% maganese well with in the range of 1% or 2 % that Cliffs is desiring at Wabush. It explains their high cost 40 year
old mine ($125 cash cost a ton last quarter) with very little desirable reserves left without the additional cost and hence why they bought Thompson Consolidated...where once they get operations on track they will do very well.

Not sure why Wabush is being compared to Alderon or Bloom lake very different.

dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on October 29, 2012, 04:04:11 PM

sorry Wabush mine cash cost were $132 last quarter....

BloomLake was $88/ton ....last year this quarter it was about $70/ton at Bloom lake...

I have not looked but it is possible that Bloom lake changed strategy to mine higher premium
ore at Bloom lake to blend with the lower quality ore at Wabush.

As I stated earlier the spike in cash cost at Bloom Lake is over how they have implemented their new strategy and
their cash cost will come down now...

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on October 29, 2012, 05:02:19 PM
Quote
Can you explain again how the high manganese matter ?
I'm not sure why but apparently it was a big deal for Wabush.  (As Dazel points out, Wabush's manganese content is far higher than Alderon.)

I suppose that non-Chinese smelters are not interested in making steel with high levels of manganese.

Quote
If you can just blend or build one of those plants for 40 million ?

To get rid of the manganese, I believe this is what they do.

You grind up the ore really fine.  Hopefully you don't have too many grains where manganese is stuck to something magnetic (e.g. magnetite/iron, hematite/iron)... it depends on the nature of the ore.  If you grind the ore finer, you will probably have less of those grains.  But it depends on the nature of the ore.

You use magnets to separate out magnetic material from non-magnetic material.  There are two different processes that can be used... high-intensity magnetic separation and low-intensity magnetic separation.
http://en.wikipedia.org/wiki/High_intensity_magnetic_separator

Grinding the ore:
- Depends on how hard the ore is.
- Grinding the ore finer costs more money
- Grinding the ore generates fines.  These receive a lower price since they cause problems in the furnace when iron ore is smelted.  Fines receive a lower price than lumps which receive a lower price than pellets.  You need a pelletization plant to turn fines/lumps into pellets.

Quote
sorry i am very new to the sector. It was very hard to keep up. :(
I am too.

You know what... I'm starting to feel that this is really hard.  There is a lot of esoteric knowledge involved and this information is not on Google.  I still don't know how to figure out the smelter deductions/quality deductions.  I've read some university textbooks on mine engineering but they don't cover that aspect of project economics.
Mining companies have teams of specialized engineers who all do different things.  Doing due diligence on juniors is freakishly hard when you don't have access to all the technical data and lack knowledge about several *different* fields of engineering.
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on October 29, 2012, 05:17:15 PM
As I stated earlier the spike in cash cost at Bloom Lake is over how they have implemented their new strategy and
their cash cost will come down now...

Dazel.

Hmm there may be a disconnect between what Cliffs says it will do and what it actually does:

Quote
For the full year 2012, Cliffs said it anticipates Bloom Lake iron ore concentrate sales and production volume to be approximately 8 million tons, with a revenue rate of approximately $170 - $175 per ton, based on current iron ore spot prices. With the additional volume expected and resulting fixed cost leverage, Bloom Lake's 2012 cash costs per ton are anticipated to decline to $45 - $50.

In addition, Cliffs anticipates 2012 capital expenditures related to Bloom Lake to be approximately $350 million, including sustainable and expansion capital.
http://ir.cliffsnaturalresources.com/releasedetail.cfm?ReleaseID=582597

2012 is almost over and it looks like Cliffs will definitely miss their target.  Part of it is cost inflation that every miner is experiencing (this trend will likely continue as the shortages of labour and equipment are likely to continue).  The rest is "optimism".

Of course Cliffs' press release coincided with Cliffs selling its shares.
Title: Re: ALS.TO - Altius Minerals
Post by: Ross812 on October 29, 2012, 08:14:19 PM
It seems that the ideal level of manganese is different for different types of steel?  For steel that will be welded, manganese should be lower than 0.8%.  There are other types of steel where more manganese is better.... most of the world's manganese mined is used as a additive for steel.

2- The Platts index specifies sulphur below 0.02% for one of its indexes but not the others.
PDF of the specification here:
http://www.platts.com/IM.Platts.Content/MethodologyReferences/MethodologySpecs/ironore.pdf

Beyond that the index would make some kind of adjustment to normalize for the difference in quality.

3- Strathcona wrote a report for the government regarding the Wabush mine and problems with the manganese content in its ore.


Low sulfur is important for electric arc furnaces primarily used in the US. Every European contract i have looked at specifiies sulfur below 0.05% which is the standard. There is nothing wrong with 0.053% sulfur as long as there is manganese in the ore to help fix the sulfur. The rules in Europe are what they are but are an old rule of thumb. The chinese are not as picky and just want it to work. If their steel passes its astm tests they can export it. The price difference between fines and pellets is essentialy the price to sinter the fines. The chinese would rather sinter their own pellets than pay for our more expensive energy costs to do it at the mine. There is three ways to look at iron ore. Dso ore is hematite that come out of the ground at 60+ %Fe. It is broken onto small pieces and shipped dso=direct ahipping ore. In canadian fe mines the ore is not dso, it is beneficiated. It is ground up and separated woth magnets. Here they use magnetite and low grade hematite. Magnetite is more magnetice than hematite so it can be separated in larger pieces than hematite which undergoes a second fine grinding before it can be separated. Magnetite is much cheaper to process because it is separated on the first pass.

This is a huge difference between the cliffs operation and alderon. Alderon is 60-70% magnetite where cliffs is 80-90% hematite.



Title: Re: ALS.TO - Altius Minerals
Post by: Ross812 on October 29, 2012, 08:34:06 PM
"Cleveland-Cliffs have previously examined the possibility of installing a manganese reduction plant
that would reduce the manganese content of ore processed to allow production of the current pellet
products to continue, with their manganese content of either 1.2% or 2.0%, from ores that would
contain up to 4.0% manganese."

from with in the old Strachcona report.

Alderon is at 1.6% maganese well with in the range of 1% or 2 % that Cliffs is desiring at Wabush. It explains their high cost 40 year
old mine ($125 cash cost a ton last quarter) with very little desirable reserves left without the additional cost and hence why they bought Thompson Consolidated...where once they get operations on track they will do very well.

Not sure why Wabush is being compared to Alderon or Bloom lake very different.

dazel.

Exactly right! Structural steel should be <4% Mn or greater than 8 percent Mn. Going from 62 to ~100% Fe in steel means Mn is concentrated by a factor of 1.6. In order to stay below 4% Mn the ore must be 4/1.6. = <2.5%. Greater than 4% and Mn starts making steel very ductile. We can't have our bridges sagging! To use high Mn steels other elements need to be alloyed into the steel and you start to get into specialty steel.
Title: Re: ALS.TO - Altius Minerals
Post by: nostradamus on October 30, 2012, 03:48:31 AM
http://www.alderonironore.com/_resources/news/2012-10-29-NewsRelease.pdf

Alderon also announces that while the progress of the feasibility study on the Kami Property continues to advance, certain engineering studies and optimization analyses within the overall feasibility initiative are taking more time to conduct and finalize than originally anticipated. The results of the study may still be released during the fourth quarter of 2012, but in any event, the results of the feasibility study will be released prior to January 31, 2013. This delay will not affect Alderon’s project development timeline.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on October 30, 2012, 01:55:18 PM
http://www.bloomberg.com/news/2012-10-29/sandstorm-bets-on-buying-not-finding-gas-gold-corporate-canada.html?cmpid=yhoo


The guy at Sandstorm was interviewed by Jim Cramer....he is the darling of the royalty business right now...their capital for investing is about half of what the Altius war chest has despite their $1.2 billion dollar market cap...They are now entering nontraditional royalties area as "the world's first diversified streaming business." sound familiar?

I guess the question is he and his team smarter than Brian Dalton and his team? At a fourth the price we like Altius odds but it is frustrating to watch for sure.

Note: if Dalton is ever interviewed by Cramer we will sell the next day.
Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on October 31, 2012, 06:21:15 AM
http://business.financialpost.com/2012/08/23/royalty-firms-strike-gold/

Interesting article.....Sandstorm raised the capital they have...

We know that Altius has looked at many deals...it will be interesting to see if they pull the trigger sooner or rather than later.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: hohi on October 31, 2012, 01:04:54 PM
I am also a shareholder of both the Sandstorm companies. I'm not sure if you realized that there are two of them - one that only makes deals on gold streams and another one that makes deals with all the other resource companies. Although Altius is 2nd largest portfolio position (and I plan to build that up over the next few years if the prices keep this low) I am pretty sure that the Sandstorm guys are a lot more experienced on the financial side of deals. But they are a lot more aggressive also and that brings risk with it.

Anyway, Altius will yield some 15%+ at current prices once Kami is up and running and they are dividending out the revenues from that. It's a very low risk play on ressources in my view and I just love the current prices to build my already big position to an even larger one ;).

Cheers!
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on October 31, 2012, 01:18:23 PM
I think Sandstorm understands that you should sell stock when it is overpriced.  Those who get into the pyramid scheme will actually make money.  But if you are late...

2- Altius is one of the few companies in the mining space that actually buys back its shares.  (But even Altius understands that you should sell stock when it is overpriced.)  Teck, Potash, Northfield Capital are other companies that buy back shares.  Teck didn't do so in 08/09 because of too much debt.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on October 31, 2012, 02:37:03 PM

Nolan Watson of Sandstorm was CFO at Silverwheaten did over a billion in deals...

They own a royalty on the former Altius property Ming mine (Rambler metals)....



Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on October 31, 2012, 03:05:12 PM
This is what Virginia mines has been up to:

http://minesvirginia.com/en/index.php/press-en/virginia-and-franco-nevada-jointly-acquire-the-initial-royalty-on-the-eastmain-property-11/

They are Altius partner below...


http://altiusminerals.com/press-releases/view/261


It is likely that Altius will now rotate it's exploration towards precious metals...hence the partnership with Virginia mines and slowly entering south America. Would be nice to have a successful exploration season....

Dazel.




Title: Re: ALS.TO - Altius Minerals
Post by: hohi on October 31, 2012, 11:20:59 PM
A few weeks back I talked to Chad from ALS and he told me that they expect a lot of future JV's/Royalties to come out of Chile. He did also mention that they are not specifically looking for Copper/Gold, but that it was more because of the business environment that brought them "down there".

Thanks for all your input guys. This is truly one of the most informative and least spammed boards I know :). Keep it up.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on November 01, 2012, 03:47:10 AM

They are entering chile Smartly....$14 million non recourse loan in a jv with Zeus capital. It fits their seasonal staffing mandate as well as the weather in their northern climate is prohibitive in the winter time. The exploration team is the backbone of the company so it will likely also help with keeping good people around.

 It also has little to no effect on capital structure as noted by the non recourse loan...chile in effect is trying to bring more mining activity to the country.

Interestingly, Rick Rule of Sprott was asked where he thought mining was politically safe in the world... had only one answer chile.



Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: hohi on November 01, 2012, 05:14:35 AM
Rick Rule also happens to be one of the smartest Investors in the Sector. And he also happens to own a lot of Altius. And he also happens to love Altius' Management. That let's me sleep even better at night...

Cheers.
Title: Re: ALS.TO - Altius Minerals
Post by: nostradamus on November 01, 2012, 05:23:28 AM
http://www.vocm.com/newsarticle.asp?mn=2&id=27964&latest=1

Shareholders in one of the province's most successful companies were told at their annual meeting yesterday that the company is expanding into South America.
Altius Minerals of St. John's is in a strong financial position with approximately 162-million dollars in cash and nearly 300-million dollars in total assets.
It's their 15th anniversary, and president and CEO Brian Dalton told shareholders the company will be expanding its operations into Chile. He says they have a deal with Zeus Capital of Santiago, and plan to do business in a big way.
Dalton says they are also still focused on Newfoundland and Labrador, especially the Julienne Lake iron ore deposit. Altius controls the extensions of that deposit.
Altius has eleven active mineral exploration partnerships, many of them with some of the major players in the mining industry.

Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on November 05, 2012, 12:48:02 PM
http://canadianinsider.com/node/7?ticker=ALS

Share count continues to come down...Great buybacks at these prices...


Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on November 07, 2012, 05:25:53 AM
http://www.theglobeandmail.com/globe-investor/franco-nevada-to-buy-weyburn-oil-stake-for-400-million/article5008775/


Royalty companies will go where the value of cash streams are...Franco touted as a precious metals royalty shows here that they will buy where there is value.

That is why we continue to think Altius and it's assets are attractive to all royalty companies precious metals or not. When cash is cheap for some companies (royalty) they will spend it on assets that trade at discounts...as they should.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on November 08, 2012, 06:03:55 AM
http://www.marketwatch.com/story/alderon-signs-engineering-procurement-and-construction-management-agreement-2012-11-08-6173315


Let's get this mine rolling....

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: hohi on November 12, 2012, 12:07:20 PM
Soon the deadline for Julienne Lake development proposals is over. I know that Altius wanted to bid (together with a partner) as they own the property with the deposits extensions. Could  bring a positive surprise if we are successful with our bid. That deposits hosts 1 Bt+ @ 34% Fe + everything we own in the extension...

Further info can be found here:
http://www.nr.gov.nl.ca/nr/mines/Julienne/index.html

cheers
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on November 13, 2012, 06:06:18 PM
http://beforeitsnews.com/press-releases/2012/11/century-iron-mines-announces-filing-of-second-fiscal-quarter-financial-results-reporting-a-gain-of-approximately-53-5-million-on-deemed-disposal-of-a-subsidiary-2608764.html


Century has booked a $53m gain on a sale of a subsidiary...in the release above they say they have sold 80% of the Astray property they acquired from Altius. Allthough they claim 100% ownership they have not acquired the asset yet because they have not spent the $7m on exploration... So technically, Altius still owns it...there has to be some sort of negotiation going on...we think....

We will look into it... For two reasons obviously, Altius' end and what the $53m gain is from...it would put a figure on Altius project values...certainly the $53 m cannot be from the one Astray property.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: nostradamus on November 15, 2012, 04:57:57 AM
Any views from the board on whether the following news is a net positive or negative for the development of the Rocky Brook and Topsails uranium properties of Altius?

JNR Announces Agreement to be Acquired by Denison Mines Corp
http://www.jnrresources.com/s/NewsReleases.asp?ReportID=557372&_Type=News-Releases&_Title=JNR-Announces-Agreement-to-be-Acquired-by-Denison-Mines-Corp.

On the positive side Denison seems to have a greater capacity to fund future exploration. However, the Chairman of Denison gives the main reason for the acquisition of JNR as the advancement of its goal to become the preeminent exploration company in the Athabasca Basin (in Saskatchewan). So is there a risk that they simply mothball the Altius properties (in Newfoundland)?

N.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on November 15, 2012, 06:03:25 AM


The fact there is some action on jnr is positive. Denison is a company in much better shape.

Commodities and any company involved in them have been hit by the fiscal cliff scare...China etc.

 Those that are smart will pick up good assets for great prices right now.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on November 15, 2012, 06:15:00 AM
http://www.bloomberg.com/news/2012-11-14/best-metals-forecaster-smirk-sees-china-recovering-commodities.html


Interesting calls from the top metals forecaster since 1999..he called the drop in iron ore this year..he is calling for $170t by June.

Dazel.

Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on November 15, 2012, 06:46:52 AM
http://www.bloomberg.com/news/2012-11-14/posco-studying-bid-for-arcelormittal-canadian-iron-ore-mines-1-.html


Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on November 16, 2012, 01:10:50 PM
$9.35. Mr. Market really doesn't like Altius right now.
Title: Re: ALS.TO - Altius Minerals
Post by: naboo on November 16, 2012, 02:26:29 PM
$9.35. Mr. Market really doesn't like Altius right now.


I think this is a holiday gift for someone who has cash to buy ALS shares at the price.  For me, I have no cash, all my cash was used yesterday to buy another gift: FFH
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on November 16, 2012, 04:59:45 PM
Did that feasibility study for Alderon ever came out, I tough it was due in Q3 2012...? I can't seem to find anything on Alderon's web site.

BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on November 16, 2012, 05:14:22 PM
The quarterly MD&As of juniors are definitely worth reading as they often make important disclosures in them.  Normally I don't advocate reading quarterly reports as it is too short-term focused but I would advocate skimming the MD&A for information regarding the development of a junior's deposit.  Selwyn Resources for example disclosed that its feasibility study was a failure in its MD&A; it did not disclose that in a press release until much later on.

Quote
As for the feasibility study on the Kami Property, we had been expecting, as indicated in prior MD&A’s, to
complete this study during the third quarter of 2012 and to release the final results during the fourth quarter of
2012. However, while the progress of the study itself has continued to advance, certain engineering studies and
optimization analyses within the overall feasibility initiative are taking more time to conduct and finalize than we
had originally anticipated. The results still may be released during the fourth quarter, but in any event, the results
of the feasibility study will be released prior to January 31, 2013.

In some cases, juniors will delay and delay the release of feasibility studies if the project is not remotely economic.  I don't think it is the case here as Alderon's partner likely did their due diligence and the feasibility study will likely be heavily manipulated anyways (if Consolidated Thompson is any indication).
Title: Re: ALS.TO - Altius Minerals
Post by: alertmeipp on November 16, 2012, 06:23:11 PM
how much they have left in their buyback program?
Title: Re: ALS.TO - Altius Minerals
Post by: hohi on November 18, 2012, 01:58:09 PM
how much they have left in their buyback program?

Hi alertmeipp!

As I understand it their buyback program is open-ended and automated. A broker is repurchasing in their name so that they can repurchase at all times - even before some important news is going to be posted.

Here's a link to the original news from ALS website:
http://altiusminerals.com/press-releases/view/259

cheers,
hohi
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on November 19, 2012, 05:58:43 AM



Beer baron,


Feasibility study was delayed...to end of the forth quarter...they went ahead with procurement and the production schedule is unaffected.

http://finance.yahoo.com/news/alderon-signs-engineering-procurement-construction-113000403.html

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on November 20, 2012, 04:43:55 AM
As Coal Mines Shut, 'Big Iron' Gets Dirt Cheap
http://online.wsj.com/article/SB10001424127887324073504578106911739318182.html

Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on November 20, 2012, 05:44:55 AM
http://www.marketoracle.co.uk/Article37381.html

Article on uranium from Rick rule.


Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on November 20, 2012, 07:00:46 AM
http://finance.yahoo.com/news/paladin-energy-substantial-shareholder-143035004.html


Interesting.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: nostradamus on November 20, 2012, 09:18:05 AM
Obviously there is the potential for some signficant near-term newsflow that could have a positve effect on the stock price (eg Kami feasibility study and subsequent funding, Julienne lake proposal).

But another thing that had dropped off my radar was their NLRC interest. This is clearly less significant than the above, but may not be immaterial. From the altius website:

On November 20, 2009 the Court accepted an NLRC proposal to the creditors for a project care and maintenance plan for up to 36 months and dismissed all further requests for creditor's claim adjustments for voting purposes. NLRC continues to seek qualified interested parties for the potential purchase of its refinery project and associated permits

So the creditor standstill ends around now. Looking back at their annual reports it seems that Altius have a $30m secured loan to NLRC on the books at zero. From their 2008 report:

In December 2007, the Corporation loaned $30,093,000 in the form of a convertible demand loan to NLRC. The non-interest bearing demand loan is secured by the assets of NLRC and is convertible at the Corporation’s option into 1,440,000 shares of NLRC. NLRC used the funds to make a milestone payment to IJK consortium regarding the purchase of steel and manufacture of heavy wall vessels, which are considered long-lead time items required for the proposed oil refinery project.

Does anyone on the board have any more information on this that might help work out how much Altius could get back? Or whether NLRC are likely to apply for a further extension of the creditor protection?

N.
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on November 20, 2012, 12:27:49 PM
Obviously there is the potential for some signficant near-term newsflow that could have a positve effect on the stock price (eg Kami feasibility study and subsequent funding, Julienne lake proposal).

But another thing that had dropped off my radar was their NLRC interest. This is clearly less significant than the above, but may not be immaterial. From the altius website:

On November 20, 2009 the Court accepted an NLRC proposal to the creditors for a project care and maintenance plan for up to 36 months and dismissed all further requests for creditor's claim adjustments for voting purposes. NLRC continues to seek qualified interested parties for the potential purchase of its refinery project and associated permits

So the creditor standstill ends around now. Looking back at their annual reports it seems that Altius have a $30m secured loan to NLRC on the books at zero. From their 2008 report:

In December 2007, the Corporation loaned $30,093,000 in the form of a convertible demand loan to NLRC. The non-interest bearing demand loan is secured by the assets of NLRC and is convertible at the Corporation’s option into 1,440,000 shares of NLRC. NLRC used the funds to make a milestone payment to IJK consortium regarding the purchase of steel and manufacture of heavy wall vessels, which are considered long-lead time items required for the proposed oil refinery project.

Does anyone on the board have any more information on this that might help work out how much Altius could get back? Or whether NLRC are likely to apply for a further extension of the creditor protection?

N.

Here is the update I got from Chad about 2 months ago:

Quote
Sorry for the tardy reply.  NLRC remains in creditor protection and as per our quarterly MDnA filings on pg 9 - http://altiusminerals.com/uploads/fs_1331242067.pdf
 

“…NLRC

The Corporation currently holds a 39.6% equity interest in NLRC, a private company that has earned permitting rights to and proposed the construction of a new 300,000 barrel per day crude oil refinery at Southern Head, Placentia Bay, Newfoundland and Labrador, Canada. NLRC is currently operating under a creditor standstill period with a mandate to sell its assets or complete financing of the project.

NLRC continues to seek out a strategic partner or buyer for the refinery project. Efforts of late have focused mainly on Asian based state owned interests.”
 
There have been a lot of legal challenges in the structure of the Legal Claim filed by SNC and as such the Claim is yet to be heard by the Court and probably never will as it will die due to lack of credence.
 
No news because there has been little to report and at this stage of the Claim it is essentially immaterial from an Altius perspective.
 
If you like to better understand please feel free to call me at 1.877.576.2209.
 
Regards,
Chad
 

BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on November 20, 2012, 03:25:57 PM
http://www.gurufocus.com/news/198413/gmos-jeremy-grantham-third-quarter-letter--on-the-road-to-zero-growth

This thread will specifically be interested in his continued tremendous concern for long term resource scarcity and how high the cost of these could rise..

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on November 20, 2012, 03:35:35 PM
Anybody has the latest Iron Ore spot price? I wish it could be easily available...

BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on November 20, 2012, 03:43:45 PM

$121/mt

It has been around this price for a month....


Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on November 20, 2012, 05:01:10 PM
Weird why is Alderon being valued lower every day then...

BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: Green King on November 20, 2012, 05:11:57 PM
Don't know.

Maybe Mr. Market want us to exploit his emotions.
Or it can be in the stars.

Fear ?
Fraud ?
or Free Money ?


:)

http://www.nasdaq.com/symbol/axx/short-interest
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on November 20, 2012, 05:45:45 PM
http://www.reuters.com/article/2012/11/20/quebec-budget-business-idUSL1E8MKF7L20121120?type=companyNews&feedType=RSS&feedName=companyNews&rpc=43

This is good news for Mining and investment in Quebec.

Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on November 20, 2012, 07:56:25 PM
Here is one place to look at the spot pricing for iron ore:
http://www.infomine.com/investment/metal-prices/iron-ore/

Title: Re: ALS.TO - Altius Minerals
Post by: Ross812 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.
Title: Re: ALS.TO - Altius Minerals
Post by: Green King on November 21, 2012, 09:09:06 AM
corporate video
http://www.youtube.com/watch_popup?v=sn1MwLYO5gc&vq=medium#t=104
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on November 22, 2012, 06:24:18 AM
http://www.bloomberg.com/news/2012-11-22/china-manufacturing-may-expand-for-first-time-in-13-months-1-.html

Is Jim Rogers right again?
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel 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.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio 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?
Title: Re: ALS.TO - Altius Minerals
Post by: nostradamus 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.

 
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel 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.




Title: Re: ALS.TO - Altius Minerals
Post by: Dazel 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.
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap 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.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio 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"
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on November 25, 2012, 11:04:39 PM
Quote
1. Is the sector (commodity sector in this case) in long-term secular decline?

- not according Jimmy Rogers or Jeremy Granthem
According to Jimmy Rogers, you should invest in commodity futures.
Commodity stocks are extremely difficult to invest in and I do not believe that he does it.  Futures outperform stocks by three times.

If you really want to understand mining, here is some reading I would recommend:
http://glennchan.wordpress.com/2012/11/04/reading-round-up-books-on-mining/

The mining sector in general is a value trap.  Especially the juniors.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on November 26, 2012, 04:43:38 AM
It's value trap,

Jim Rogers owns a commodity index bit of a conflict of interest...when you see him sell it...you will know he thinks the cycle is over.

This is not a junior mining thread...but I agree 90 % of juniors are a value trap...That is why there are very few operators that create value. They are widely known and Brian Dalton is one of them...

We like you are drawn to the royalty side...Rogers is getting is his royalty on his commodity index...same premise.

We could see Grantham investing In companies like Altius...however, he is huge at $100 billion...he would need scale.

The royalty company huge premium in the market is because investors are hedging against inflation less risk from mining operations and income. We do not expect these conditions to stop anytime soon.

The junior Mining capital destruction you mention is to the benefit of Altius as they will simply wait until the opportunity is right...as Royal Gold has done with Thompson Creek...

Dazel.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on November 26, 2012, 01:58:18 PM
Altius is my largest position right now.

Here's an interview with Rick Rule that is relevant to the sector:
http://www.thedailybell.com/4334/Anthony-Wile-Rick-Rule-on-Gold-Silver-and-Why-Junior-Mining-Stocks-Have-Languished

Title: Re: ALS.TO - Altius Minerals
Post by: BargainValueHunter on November 27, 2012, 10:35:13 AM
Rick Rule on Altius:

Quote
If you talk to a prospect generator, Altius Minerals Corp. (ATUSF.PK) might be an example, its exploration budget this year may be $20M, and joint venture partners are going to spend $17M of that. So its net exploration expenditure is $3M. Its G&A budget is $2M. So it needs to find $5M and it has $180M in cash and securities. The question is answered. You have a yes. You see another company, however, that is operating on its own nickel, whose budget is five or six times the cash it has, and if it can't give you a very, very, very good answer as to where it is going to get the money, you get to walk away.

http://www.theaureport.com/pub/na/14773
Title: Re: ALS.TO - Altius Minerals
Post by: nostradamus on November 28, 2012, 06:48:04 AM
Hi all

I just listened to the following presentation by Tayfun Eldem at the Scotiabank mining conference.

http://www.newswire.ca/en/webcast/play/1078703/1174817

The vast majority of the presentation is simply stating what is already included in the slides of Alderon's corporate presentation. Regarding the DFS he says that the delay is to continue work on pit optimisation to ensure they are choosing the highest value options for the projects. He also says that "it is expected to conclude in the coming weeks, at the latest early January."

However, more importantly, in the last minute of the presentation he is asked about the delivery of the feasibility study and how this relates the next tranche of funding from Hebei. In response he says that there are four conditions that the DFS needs to meet to complete the transaction with Hebei and these relate to:

1. Timing of delivery of DFS by end-Jan
2. Total capital
3. Size of resource/minable reserves
4. Handful of specs around product quality

He then goes on to say that "we have already covered this ground and know that we meet all of these criteria and therefore there is absolutely zero risk in terms of delivering what Hebei is looking for to complete the rest of the transaction."

Regards

N.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on November 28, 2012, 07:32:26 AM
Meanwhile at Cliffs, things are pretty rough..

http://www.canadianbusiness.com/article/107288--cliffs-natural-resources-delays-expansion-at-bloom-lake-mine-in-quebec

Quote
Cliffs Natural Resources Inc. has delayed portions of its Bloom Lake mine expansion in Quebec while also idling some production at two of its U.S. iron ore operations. [...] The postponement will reduce Cliff's Eastern Canadian iron ore sales volumes to between nine million and 10 million tons for 2013 compared with an earlier expectations for 13 million to 14 million tons
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on November 28, 2012, 06:02:11 PM

http://www.mining.com/wuhan-iron-and-steel-to-raise-usd2-4-billion-for-purchase-of-iron-ore-assets-78569/

Interesting...Wisco is all over the Labrador trough and owns 25% of bloom lake.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on November 28, 2012, 06:53:27 PM
http://www.prnewswire.com/news-releases/leucadia-national-corporation-and-mk-resources-company-announce-inmet-mining-corporation-to-acquire-70-interest-in-las-cruces-project-leucadia-and-mk-resources-also-announce-merger-agreement-54247532.html

http://www.miningweekly.com/article/inmet-agrees-to-buy-rest-of-las-cruces-mine-2010-11-30


http://www.bloomberg.com/news/2012-11-28/inmet-mining-rejects-4-9-billion-offer-from-first-quantum-1-.html

This is a timeline of Leucadia's stake in inmet mining....they would have made a fortune on the take over today...well more of fortune than they have made already.


Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Green King on November 30, 2012, 11:35:30 AM
Harper announces Muskrat Falls loan guarantee

http://www.cbc.ca/news/canada/newfoundland-labrador/story/2012/11/30/nl-muskrat-falls-loan-guarantee-1130.html
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 03, 2012, 06:12:02 AM
Muskrat Falls

This is a big deal for all power needs in eastern Canada...Altius was involved as many as 7 years ago in putting proposals forward for financing the project. The government loan does not cover the total cost of building the project.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 04, 2012, 04:51:16 AM
http://canadianinsider.com/node/7?ticker=ALS


You have to love buying back shares at these prices...

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: hohi on December 04, 2012, 07:35:11 AM
You have to love buying back shares at these prices...

Just imagine they could deploy $100+ Million in these buybacks. We would be all rich men once they dividend out the Kami royalty to us. I am still hoping we can buy back until we got 20M shares outstanding. But thats probably just my wishful thinking ;).

cheers,
hohi.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 04, 2012, 07:44:49 AM


Yes wishful thinking...but the share count will drop daily...until we are fairly valued.

We like the buy backs but our wish path is more at  one or two more dirt cheap royalties streams...
Something unique would be nice...there are a lot of companies starving for capital...

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: hohi on December 04, 2012, 08:37:41 AM
Yeah, some near term cash flowing royalty would probably be even better. But the competition for long-life near-term royalties is also growing. Even BlackRock is buying IronOre royalties these days. More and more people figure out the deadly effects of cost-push inflation... But maybe we get lucky - although some cheap aquisition will in my opionion more likely be a few years away from production.

cheers,
hohi.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 04, 2012, 04:57:06 PM
http://www.metalbulletin.com/Article/3126579/Iron-ore-and-coking-coal/Posco-seeks-15-stake-in-ArcelorMittal-Mines-Canada.html

Yes there is demand....and deep pockets out there...Buffett owns or owned Posco.


Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 05, 2012, 05:57:11 AM
http://www.metalbulletin.com/Article/3126794/Iron-ore-and-coking-coal/Spot-635-Fe-iron-ore-prices-up-on-improved-sentiment.html


Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 06, 2012, 04:05:58 AM

http://finance.yahoo.com/news/commodities-super-cycle-not-ending-151801007.html;_ylt=Asrw9h6WY32S.P1257huz2.iuYdG;_ylu=X3oDMTN1OTExYzhrBG1pdANGaW5hbmNlIEZQIE1lZ2F0cm9uIDIEcGtnAzA1MTViMDIzLTk0YzgtMzhmYS1iZTAzLTkyNjE3ODZlNzhlZARwb3MDMQRzZWMDbWVnYXRyb24EdmVyAzg1ODBiOTMzLTNmOWMtMTFlMi1iYmY1LTQ2MzQxZjdiZDQyYg--;_ylg=X3oDMTFpNzk0NjhtBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25z;_ylv=3

Goldman says super cycle not ending.

Jeremy Grantham


Jim Rogers

Leucadia

What are the odds that they are all wrong?

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on December 06, 2012, 06:17:10 AM

http://finance.yahoo.com/news/commodities-super-cycle-not-ending-151801007.html;_ylt=Asrw9h6WY32S.P1257huz2.iuYdG;_ylu=X3oDMTN1OTExYzhrBG1pdANGaW5hbmNlIEZQIE1lZ2F0cm9uIDIEcGtnAzA1MTViMDIzLTk0YzgtMzhmYS1iZTAzLTkyNjE3ODZlNzhlZARwb3MDMQRzZWMDbWVnYXRyb24EdmVyAzg1ODBiOTMzLTNmOWMtMTFlMi1iYmY1LTQ2MzQxZjdiZDQyYg--;_ylg=X3oDMTFpNzk0NjhtBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25z;_ylv=3

Goldman says super cycle not ending.

Jeremy Grantham


Jim Rogers

Leucadia

What are the odds that they are all wrong?

Dazel.

Of course there is always a chance they could be wrong. In the long run I think they will eventually be right because it makes sense to me. What seems uncertain is the timing.

Its tough for me to make money in commodities- I have to keep reminding myself that this situation (project generator/merchant bank, royalty company, great balance sheet, owner operators) is different than buying the usual mining company

Its comforting that these guys agree as they are way smarter than me.

Thanks for your continued good posts.

Best of luck to all on the board.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 09, 2012, 04:16:53 PM
http://www.metalbulletin.com/Article/3128369/Iron-ore-and-coking-coal/Spot-635-Fe-iron-ore-prices-up-by-4-this-week.html


Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 10, 2012, 05:29:58 AM
http://www.metalbulletin.com/Article/3128953/Iron-ore-and-coking-coal/Chinas-November-iron-ore-imports-are-the-second-highest-in-history.html


The reality of some of the numbers coming out of China are a lot different than the ones that are making headlines with regards to their appetite for commodities.

Iron or spot price today is $125.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 10, 2012, 06:45:52 AM
http://www.reuters.com/article/2012/12/08/us-cnooc-nexen-idUSBRE8B619M20121208?feedType=RSS&feedName=innovationNews&rpc=43

Canada's approval of the Nexen deal will be positive for the Hebei transaction. Hebei being a state owned enterprise was waiting to see if the Canadian government would approve the deal. I would expect that you will see the feasability study and more importantly the beginning of the financing flow through to Alderon.

In fact this deal for Altius is extremely positive as they are involved with SOE throughout the Labrador trough....the development of the area...will need capital from china...

When you look at the longterm outlook...the new port, Muskrat falls and a possible railway from CN are the infrastructure pieces needed for a longterm strategy...they will bring down costs of production and make the trough a world class asset. All the pieces are coming together and this deal opens the door to a green light from the Canadian government on SOE's in Canada.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: globalfinancepartners on December 10, 2012, 06:59:01 AM
"this deal opens the door to a green light from the Canadian government on SOE's in Canada."

I thought it was just the opposite.  Going forward it would be less likely that an SOE could gain approval to buy out Alderon in it's entirety.  Which is a net negative for Altius - right?
Title: Re: ALS.TO - Altius Minerals
Post by: matts on December 10, 2012, 07:31:14 AM
I agree, the Nexen decision is a negative for Alderon, not a positive. The Government made it very clear that they would be coming out with new rules that would be more stringent than the previous ones (which were used for Nexen and Progress).

Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 10, 2012, 07:54:35 AM

These were attached to oil sands investments...china now controls 10% of the oil sands...the new rules will reflect this. other investments
will be done on a case by case investment. Alderon is hardly a national security issue...The chinese governemnt were very happy with the approval. They (China) also approved the Viterra deal the same day as Nexen was announced. That looks like a good government relationship and hardly would have Hebei or Wisco or any other "SOB" thinking Canada is not a good place to do business. The iron ore business in Canada is exremely small with foriegn companies already owning the majority of the assets...Rio Tinto, mitsubushi, Cliffs Natural, Arecellor Mitel,Tata steel etc..now Posco...

These are very different rules than the oil industry...

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 10, 2012, 08:04:55 AM
http://business.financialpost.com/2012/12/07/nexen-progress-canada-oil-sands-state-owned-firms/


In order for this deal to be approved the United States will have to sign off on it. We know as Canadians..our large oil assets are pretty much
controlled by our big brother to the south of us...These new rules simply state the obvious...oil, water, Potash, banks...are of national security issues to both the Canada and the United States.

The fact this deal was approved is very good for Canada and China relations and hence Altius.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on December 10, 2012, 03:03:21 PM
I don t know that china buying out Alderon in its entirety is that important for us shareholders.

Canadian government and us shareholders want to sell + export iron, the more the better.

I am going to vote that the Nexen deal helps- my vote is biased though.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 13, 2012, 12:13:22 PM
http://www.mbironoreindex.com/Article/3130927/MBIO-Index-13-December-2012-Index-sees-further-strong-rise-up.html

 Iron ore has been climbing steadily and quietly almost $130.... There will be some very disappointed tax loss sellers.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 14, 2012, 06:26:02 AM
http://www.fool.com/investing/general/2012/12/13/news-encana-petrochina-enter-into-exploration-deal.aspx


We expect many deals to be announced with china like the one above soon in Canada...oil sands are off limits but the rest of the country will seek to produce the commodities that china will need for their Rebound.

As Jim Rogers has said for 2 years...the Chinese have had their foot on the breaks in order to slow inflation and their economy. He said if anyone does not see this they are stupid!
They are now taking that break off...all of their numbers are at 14 month highs and moving up...all commodity prices will rise in this environment...as we have seen with iron ore rising 50% since September.

Altius does not need iron ore to rise above the $130 it is at now...it will however, benefit from the other rises that will take place.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: hohi on December 14, 2012, 08:13:39 AM
As expected ALS bid for the EML (Julienne Lake) with an undisclosed partner. Hope this works out! ;)

Cheers,
hohi.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 16, 2012, 03:05:06 PM
http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/first-quantum-boosts-bid-for-inmet/article6458719/


Looks like Leucadia will cash in some more on their foray into mining!

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 16, 2012, 05:39:09 PM

http://www.businessspectator.com.au/bs.nsf/Article/Paladin-shares-surge-on-Japanese-election-result-pd20121217-32W3Y?opendocument&src=rss

Japan's new government are pro nuclear...uranium could have a huge year...2013 is the end of the U.S- Russia decomissioning  of nuclear weapons for use in nuclear power plants. This is a huge part of the world uranium supply coming out of the market...you add a restart in Japan with this and the demand from the new plants coming on line...it is a perfect storm for uranium...and repricing of Altius' uranium assets.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 17, 2012, 05:55:14 AM
http://www.metalbulletin.com/Article/3132174/Iron-ore-and-coking-coal/Spot-635-Fe-iron-ore-prices-gain-5-per-tonne-on-bullish-sentiment.html

We have seen virtually zero coverage of the the straight up rise of iron ore prices. Looks like Alderon may hit it right with their feasibility study timing....

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Ross812 on December 17, 2012, 07:23:38 AM
Let's wait for the feasibility study. They will assume a long term spot price anyway. The movement of the spot price up or down over the last two months has nothing to do with it. Let's not count our tonnes of Fe ore before there is a feasibility study!  ;)
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 17, 2012, 07:37:41 AM


Agreed.
However, bankers are fickle...spot price and sentiment do matter when you are raising $700 million or so! Study, then the next off take agreement, then debt raise. Muskrat falls is supposedly getting formal green light tonight according to CBC....

 Altius  long-term spot price number is $115 in their projections we are happy with that...we are around $135 right now.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on December 17, 2012, 07:55:02 AM
Alderon has raised like a rocket ship in the last week but Altius stayed flat, anybody arbritaging? I have calculated that every penny alderon loses or wins should add/remove at least 500k to their Market cap.

BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 27, 2012, 06:14:50 AM
http://www.bloomberg.com/news/2012-12-26/iron-ore-rallying-most-since-10-as-china-rebounds-commodities.html?cmpid=yhoo


Cheers to 2013.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 27, 2012, 06:31:01 AM
http://www.metalbulletin.com/Article/3135150/Iron-ore-and-coking-coal/Spot-635-Fe-iron-ore-prices-rise-further-to-140-142-cfr.html


Altius is sitting in the sweet spot for a rebound in china...which is happening. Iron ore has sky rocketed yet iron ore stocks and headlines are muted. When this happens companies start buying up cheap assets. It appears that this will be the case as the investing public is oblivious to the strength of this rally.


Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on December 27, 2012, 07:23:54 AM
different view on china from Kuppy.

http://adventuresincapitalism.com/post/2012/12/24/How-Many-Malls-Does-China-Need.aspx

the music may stop one day in China + there may be big problems as a result.

ALS + Alderon may hopefully be out of the iron play by then.

Or perhaps all this and other infrastructure that people worry about will be used once all those billions of people move to more affluent lifestyle i.e. build it + they will come.

The western world needs these 3rd world countries to thrive. For their and our sake I hope they succeed. Hopefully the corruption will not get in the way.

Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 29, 2012, 11:03:57 AM


http://www.mining.com/china-to-buy-major-african-iron-ore-project-for-1-45-billion-79462/


The resource is under a billion tons and is in the Congo....smaller than Alderon...The Chinese acquisitions continue unabated.

Say what we will about the economy and the future of china...money talks in my mind. They obviously need the resources or they would not continue to buy them at an incredible pace.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: hohi on December 30, 2012, 08:40:45 AM
The tonnage may be lower but it's 57% Fe. But still 1,45 billion dollar for some project in the middle of Africa without the infrastructure...

Also some comments from our CEO about Altius and China:
http://www.vocm.com/newsarticle.asp?mn=2&id=29496&latest=1

cheers,
hohi.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on December 31, 2012, 06:29:57 AM
http://www.metalbulletin.com/Article/3135484/Iron-ore-and-coking-coal/Spot-635-Fe-iron-ore-prices-jump-5-on-Monday.html


Almost touching $150....

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 01, 2013, 06:29:46 PM
http://www.theglobeandmail.com/report-on-business/asian-led-group-takes-11-billion-stake-in-arcelormittal/article6830959/


$1.1 billion for 15% stake...of annual production of 15 million tons...

Alderon is looking  to produce 16 million tons in annual production...it has obvious production start up costs etc...however, this latest transaction gives an example of what these mines are worth to steel producers...once they go to production...there is massive upside to Alderon amd Altius if iron ore prices remain where they are.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on January 01, 2013, 07:42:54 PM
Did I get that right, they valued the MT Open pit at 7.3B$ ? What's the expected lifetime of that pit at 15MT/Y?

BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 02, 2013, 04:47:50 AM

Beer baron,


You have it right...Mont Wright mine has a billion tonne of iron ore resource at 30%. very similar to that of Alderon...same time period for lifetime of the mine at 25 years.

Altius and Alderon are going to appreciate many times. They are clearly ridiculously priced...iron ore stocks globally are skyrocketing on the 85% rise in iron ore pricing in the last 3 months. it looks like Posco got a good deal in the Labrador trough as they started bidding for assets in September when the credit agencies got on large producers to cut debt. They would not get that deal today.

We expect 2013 to be extremely rewarding....

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on January 02, 2013, 04:24:15 PM
http://greatinvestors.tv/video/how-to-use-hidden-options-to-beat-inflation-with-matthias-ri.html

How to Use "Hidden Options" to Beat Inflation, with Matthias Riechert of Polleit & Riechert

This is sort of how I was thinking of ALS. as far as protection from inflation

If Alderon was to do a similar deal as noted above at $7.3 billion , ALS share would be 25% or ~$1.8 B or ~ $60 per share (+ the royalty).

I am not including capital needed for mine

Wow this seems too good to be true (I have been saying this since the beginning of the thread). Even at half the valuation this would be a homerun.
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on January 02, 2013, 04:54:10 PM
You have to account for the different economics of the mines.  If you look at Cliffs' various operations, operating costs vary a lot.

You might compare Alderon to Bloom Lake... the reality so far has been that Bloom Lakes' opex and output has been much lower than originally claimed by Consolidated Thompson and Cliffs.  They claimed opex of around $30-$40+/ton and production of 8MT/yr expanding to 16MT/yr.  Opex will likely be around $80/ton, production is barely hitting 8MT/yr.  I'm not sure why but Cliffs has decided to postphone its mine expansion:
http://www.cbc.ca/news/canada/newfoundland-labrador/story/2012/11/19/nl-1119-bloom-lake-layoff.html

The MT mine might have 24 MT/yr of production (15MT concentrate and 9MT in pellets).  I am guessing that their operating costs will be lower than Alderon.  I believe that have some infrastructure in a private railroad and (presumably) a pelletization plant.

2- Here's my back of the envelope calculation for Alderon:

http://www.cbc.ca/news/business/story/2011/01/11/consolidated-thompson-iron-mines-takeover.html
Bloom Lake was purchased for $4.9B

I'm not sure exactly how much capex was put into Bloom Lake at the time but let's assume $0.9B.  (I'm too lazy to check SEDAR.)  So now you have $4B.

There is risk to mine development and Alderon's cash flows don't happen right away so you need to discount Alderon further.  Who knows what the right discount rate is.

But say at $2B, Alderon is still worth far more than its current market cap (around $200M).  Of course iron ore prices are much lower now than when Cliffs bought Consolidated Thompson/Bloom Lake.

In the stock market, iron ore miners are not getting very high multiples.

3- Of course Alderon (EDIT: Altius, not Alderon) has a lot of leverage to iron ore prices because it has a lot more land.  The Julienne Lake project may be promising and could be worth a lot.  It has many joint ventures exploring for more iron ore.  It has a lot of upside exposure to iron ore.

4- Altius continues to buy back shares.  It's trading near book value but some aspects of its book value are understated, e.g. the nickel royalty has a carrying value that is too low, the Alderon/Kami royalty is worth more than book, etc.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 02, 2013, 05:51:56 PM
It's a Value Trap,

For 3. I think you meant "Altius" has a lot of land....and I agree...Altius has huge exposure to the Labrador iron ore trough...

4. Agreed on book value being understated...all of the royalties have 0 cost bases for the most part...under our assumptions whatever you price Alderon at $1,2 or $3 billion...production makes the royalty to Altius a home run...with a cost of 0...roi would be the highest in the royalty industry...

Every one billion of market cap at Alderon almost doubles Altius' current market value with their 25% ownership stake....

*cliffs cancelled expansion during the same time fortes cue arcellor bhp and vale cut back on expansion plans...the iron ore price is up 85% since then...

As I said earlier I think Posco was opportunistic with their purchase...they tried to buy a company in Australia and were rejected.

Iron ore Stocks are following the price upwards and multiples will expand with continued stability in the iron ore price at current prices around $150... All of the big producers are up very big from their bottoms in October...BHP is at a 52 week high.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: no_free_lunch on January 02, 2013, 08:09:54 PM
Have been doing some digging on this one and it does sound promising however I have a few questions.  I am very much a complete novice when it comes to mining companies so please take my comments below in that context.

In regards to the comparison to other mines, I have read that there are issues with the quality of the iron concentrate at Alderon's upcoming mine.  According to the articles I have read, there are higher levels of Manganese than is standard and as such it has to be sold offshore as North American plants won't process it.  The articles also suggested that there could be a $15 price reduction as a result of the quality.  However, this would seem to contract Hebei's agreement to purchase 60% of the product at a 5% discount to spot.  What is your guys take on this?  Will the remaining 40% go for a lower price?

Also the fact that the product needs to be shipped to China will add some $25 / MT to costs, I wonder if the comparable mines are selling to North America or not?
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on January 02, 2013, 08:23:12 PM
Those issues have been discussed in this thread before.  (I don't think we ever really reached a conclusion though.)

I'd note that Hebei's agreement is to purchase the first several million tons at 5% off the benchmark price.  If a mine only produces less than 8MT/yr (which is likely in my opinion, given what happened with Bloom Lake; there is a connection between Bloom Lake and Alderon as both used BBA for technical reports and the management teams of both are associated with Forbes and Manhattan).  If the mine produces less, Hebei will be buying more than 60% of the output at a discount.
I presume that Hebei will receive a lower price based on the level of manganese in the ore.  It's standard practice for there to be smelter deductions.  You pay a lower price based on the level of unwanted elements in the product.

The off-take agreement also gives Hebei an option on the remaining 40%.  This option is probably worth something.

Also the fact that the product needs to be shipped to China will add some $25 / MT to costs, I wonder if the comparable mines are selling to North America or not?
A lot of iron ore in the world and in the Labrador Trough is being sold to China.  Drybulk shipping rates have fluctuated enormously in the past and have affected the iron ore trade.

In Alderon's case, the Hebei price is based on a benchmark price for iron ore delivered to a certain port in China.  So Hebei would be paying for shipping.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 03, 2013, 03:46:05 AM


http://www.bloomberg.com/news/2013-01-03/arcelormittal-deal-fuels-iron-ore-rally-corporate-canada.html?cmpid=yhoo

This is why this deal within the Labrador Trough is so important..It gives us  a direct comparison and shows us what kind of demand for iron ore their is globally. Steel suppliers know the difficulty involved in mining iron ore and they know what it was like to try to ge supply at $190 a ton. They are willing to put up capital to ensure supply.

The fact is mining is expensive...infrastructure costs are massive...location matters. As Brian Dalton has stated "Alderon" is advantaged because it has the right address. They do not have to be the highest quality mine in the world...but they have to be make sense on capital cost to bring to production  and over the Long term bring down costs of production to make their shareholders a nice profit on the spread. The economics of your location are everything in mining.

We know the demand is there...and we know the capital is there....execution matters...

As for Altius...if the entire labrador trough gets built out...They become the Gina Rinehart of Canada...they are the largest holders of land leases in Newfoundland Labrador.

http://en.wikipedia.org/wiki/Hancock_Prospecting





Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Ross812 on January 03, 2013, 08:01:53 AM
In regards to the comparison to other mines, I have read that there are issues with the quality of the iron concentrate at Alderon's upcoming mine.  According to the articles I have read, there are higher levels of Manganese than is standard and as such it has to be sold offshore as North American plants won't process it.  The articles also suggested that there could be a $15 price reduction as a result of the quality.  However, this would seem to contract Hebei's agreement to purchase 60% of the product at a 5% discount to spot.  What is your guys take on this?  Will the remaining 40% go for a lower price?

I would like to read the articles you read about manganese content in the Kami ore. Can you provide a link?

Here is what I came up with earlier:
Smelter deductions as far as I can tell don’t really come into play with respect to iron ore. Smelter credits/deductions are given to compensate the smelter for waste above a certain benchmark. For iron smelting this is usually in the form of credits or deductions above an agreed upon %Fe. The factory has to use the same amount of energy regardless if 58% Fe or 64% Fe ore is used and the recovery from 58% Fe ore is lower and waste higher so a credit/debit is given in the form of $5/%Fe to compensate. Sulfur and Manganese are not smelter deductions because they are actually incorporated into the steel (not a waste product).  Quality deductions may come into play. Most European iron ore contracts I could find state a max allowed sulfur % at 0.05. As far as Manganese goes, 0.4-1.1% is desirable. Alderon ore will have 1.6% Manganese and .053% sulfur which means it will probably be blended with lower manganese/sulfer/fe content ores during sintering. The ore as-is is acceptable to make steel in China, but blending a lower quality 60% Fe Indian ore with Alderon’s 65.5% Fe ore would create a product that could be sold in Europe. Manganese does not start affecting the quality of the steel produced until ~4%. 65.5% Fe 1.6% Mn or can only produce 2.45% Mn steel. Sulfur and the grain size distribution are the two main detractors to this ore’s marketability.

The grain size distribution means the ore would have to be formed pellets before it could be used in North American electric arc furnaces. The quality factors make the Ore unusable in the US without blending sintering then pelleting the ore. There is really no reason to do this because the US already has an ample supply of DSO and acceptable ore pellets from Canada. The grain size distribution is not a problem in China as they sinter and use blast furnaces. China is primarily concerned with the %Fe. Chinese iron plants can buy cheap ore with low sulfur and low manganese from India. The problem with Indian ore is it has a low Fe content 56-60%. This is solved when blending it with hi Fe Canadian ore.

Kami ore is also 65.5% Fe which means it would be priced at a premium to the 62% Platt price. This is about +$5-5.50/%. Which means Kami ore could fetch a price at Platt + $17.5. Hebei was smart when they locked in a price at 95% Platt. Manganese levels do not particularly matter when selling to China. Sulfur levels are just outside the range of what is acceptable in Europe (6% too high), but they are not selling to Europe anyway. Prices for ore are negotiated directly; Hebei gets preferential treatment at 95% Platt. I don’t think other companies are going to get this sweet heart deal. I would look for Platt + $5-17 for everyone else.
Quote
Hebei is not stupid. They would not have negotiated a price of 95% Platt if they could get Platt - $15. The Platt price is based off 62% Fe. Alderon ore is 65.5% which would fetch a premium of Platt + $5/%Fe if pricing gets really competitive. Using Platt for the product price assumption seems pretty reasonable and a little conservative.
Title: Re: ALS.TO - Altius Minerals
Post by: no_free_lunch on January 03, 2013, 05:38:23 PM
Quote
I would like to read the articles you read about manganese content in the Kami ore. Can you provide a link?

http://glennchan.wordpress.com/2012/08/08/iron-ore-miners-mainly-in-the-labrador-trough/

The article has a link to a scotiabank analysis of Alderon as well.  Well the link is purportedly from scotia, it's actually hosted on a different site which is kind of strange.  In it, they include the $25/MT transport cost to China so they are assuming the pricing is on a delivered basis.

http://www.grandich.com/wp-content/uploads/2012/07/Iron-Ore-Report-July-2012-ADV-only.pdf

The transport cost is unfortunate but the pricing might actually be higher than spot based on these comments:

Quote
• Hebei will purchase 60% of the annual production

up to a maximum of 4.8Mt of the first 8.0Mt of

iron ore concentrate produced at the monthly

average price per DMT for iron ore sinter feed

fines quoted by Platts Iron Ore Index (including

additional quoted premium for iron content

greater than 62%
) less a 5% discount.

• Hebei will also have the option to purchase

additional tonnage at a price equal to the Platts

Price, without any such discount.

Quote is from page 8 in this document:

http://www.alderonironore.com/_resources/presentations/ADV_PPT.pdf
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on January 03, 2013, 05:52:50 PM
Quote
Hebei is not stupid. They would not have negotiated a price of 95% Platt if they could get Platt - $15.

I think what will happen is this:

Hebei gets the Platt benchmark price
They may pay extra if the Fe% is high, as specified in the benchmark.
There will likely be quality deductions as outlined in the Kami technical report.  Maybe it's $15/ton... who knows.
In general, deductions are based on the level of unwanted elements in the ore.  Over the life of the mine, the quality of the ore will vary.  By using a variable price, the smelter will pay less for bad one.  Using a fixed price would be stupid... otherwise the mine could sell some really crappy ore to the buyer and they could adjust the processing circuits to output more concentrate at the expense of delivering lower quality concentrate.

2- The other question is whether or not you should trust Alderon's management, BBA, etc.  The mining world is full of people who overpromise and underdeliver.  I would take the Kami technical report with a huge grain of salt considering what happened with BBA's technical report on Bloom Lake.  The economics of the project may not be as good as outlined in the technical report.

There is (a small amount of) metallurgy risk.  The concentrate may have lower than 65% Fe.  Sometimes we don't know how well a processing plant will perform until it is actually built... look at the failure that is Vale's Goro project (e.g. acid spills, environmental damage, etc.).  What happens on a bench or pilot scale doesn't necessarily extrapolate to production scale.  If you want to fudge the economics of a project, you would make minor tweaks to your metallurgy assumptions.  Of course, the Goro project is an extreme example where technological risk was very high because that type of processing is cutting/bleeding edge.

3- You can read skim through this book if you are masochistic:
http://www.scribd.com/doc/23475626/Wills-Mineral-Processing-Technology

Basically...
- What happens on a bench or pilot scale doesn't necessarily extrapolate to production scale.
- Mineral processing engineers have to optimize for getting rid of unwanted elements versus not getting rid of valuable ore.  Mineral processing techniques usually remove a lot of waste and a small amount of wanted ore... you have to find the right balance between getting rid of unwanted waste and throwing away less ore.

Quote
http://glennchan.wordpress.com/2012/08/08/iron-ore-miners-mainly-in-the-labrador-trough/
That's my blog by the way ;)
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on January 03, 2013, 06:00:58 PM
Quote
The article has a link to a scotiabank analysis of Alderon as well.  Well the link is purportedly from scotia, it's actually hosted on a different site which is kind of strange.
Technically those analyst reports are the intellectual property of the firm that put it out.  Sometimes there are bootleg copies floating around because there are people who want to pump a stock.  Sometimes you will find copies of analyst reports hosted (presumably with permission) on a junior's website.

Of course the analysts generally suck up to juniors because the analyst's investment bank may raise capital for the junior and collect big underwriting fees.  So I never trust analysts.  There may be academic studies that show that you should do the opposite of analyst recommendations.  Check out this book:
http://www.amazon.com/Confessions-Wall-Street-Analyst-Information/dp/0060747706
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 04, 2013, 06:18:18 AM
http://finance.yahoo.com/news/alderon-release-feasibility-study-kami-110000386.html

http://www.metalbulletin.com/Article/3136976/Iron-ore-and-coking-coal/Spot-635-Fe-iron-ore-prices-jump-13-this-week.html


Prices are now above $150....this is extremely positive for all involved in iron ore...Alderon's timing on the feasibility study has worked out very well.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 04, 2013, 06:40:40 AM
Its a value Trap,


I enjoy your posts...so please do not take this the wrong way...

To take Cliffs production costs for a mine "bloom lake"  where they have had nothing but operational troubles and a change in strategy for a couple of quarters is "wrong". I looked at your blog...you have asia pacific production costs at half of what they are. Your timing of your report is at the crash point of the iron ore market...your assumptions are on prices that are unsustainable for producers in the market globally not just the Labrador Trough.

Example of the Alderon bash was that they used $115 in their PEA...instead of the market price of $135 at the time of production....
"which may indicate that they think the price of iron ore is coming down over time"....should they use $170 for the feasibility study if they think it will go up from the current $155?

Sounds a bit off does it not?

As for the bloom lake and Alderon bashing you have been doing...I will give you the benefit of the doubt as you and everyone else that joined the crowd in being wrong on iron ore pricing in August to October...

We are talking about nothing when prices are this high...bloom lake production costs will come down and Alderon will be a successful mine.

Sorry have to call a spade a spade...you are wrong on bloom lake and Alderon...

And in your genius you will make a fortune on Altius!!!!
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on January 04, 2013, 07:21:15 AM
Dazel, ItsaValueTrap, love your posts + recent debate- please continue.

This seems to be the case where nobody knows exactly how the mine will turn out i.e unknown & unknowable- it seems like the current valuation gives a lot of room for error.

I can see both your points + ALS still working out well for all of us i.e heads we win, tails we don t lose too much + probably win still -just a smaller amount



Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 04, 2013, 08:28:37 AM

I am a business man.

So I will give you a hypothetical question on your business "bloom lake" mine.

You have made a large sum of earnings last year " 2011" because you are very profitable...

You have some operational trouble in your expansion of the mine "capital cost"....

For your 2012 year where you see that the iron ore price drops precipitously making your expansion plan that has operational issues look pretty bad...how do you book it for tax purposes?

As capital expenditure that depreciate over 25 years or do you book it as operational production cost for the 2012 and incur the full tax expenses of it in 2012?

If you are a business man you know the answer to that question. That would inflate the production cost now even though most of the work went towards expansion or capital cost for future production. It is smart business and tax strategy but it makes short term productions cost look bad...however, future production cost will fall and look stellar...making you look great. Analysts don't understand business because they have models and straightline thinking.

Anyone involved in business knows that quarterly and even yearly numbers can be massaged how you want them...and why everyone happens to hit their numbers..by a penny! That is nonsense...it is the longterm "cash production" that matters.

It's a value Trap.....I agree  with you that 80% of juniors are a ponzi scheme....producers are business people.

Dazel.



Title: Re: ALS.TO - Altius Minerals
Post by: Green King on January 04, 2013, 10:47:04 AM

I am a business man.

So I will give you a hypothetical question on your business "bloom lake" mine.

You have made a large sum of earnings last year " 2011" because you are very profitable...

You have some operational trouble in your expansion of the mine "capital cost"....

For your 2012 year where you see that the iron ore price drops precipitously making your expansion plan that has operational issues look pretty bad...how do you book it for tax purposes?

As capital expenditure that depreciate over 25 years or do you book it as operational production cost for the 2012 and incur the full tax expenses of it in 2012?

If you are a business man you know the answer to that question. That would inflate the production cost now even though most of the work went towards expansion or capital cost for future production. It is smart business and tax strategy but it makes short term productions cost look bad...however, future production cost will fall and look stellar...making you look great. Analysts don't understand business because they have models and straightline thinking.

Anyone involved in business knows that quarterly and even yearly numbers can be massaged how you want them...and why everyone happens to hit their numbers..by a penny! That is nonsense...it is the longterm "cash production" that matters.

It's a value Trap.....I agree  with you that 80% of juniors are a ponzi scheme....producers are business people.

Dazel.
Great hypothesis and all.
How do you prove that is what happened ?
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 04, 2013, 11:37:24 AM

GK,

Its not a hypothesis...it's what I would do if it was my business...they would be idiots if I could prove it! Cliffs shuttered production in the U.S where production costs are much lower....only time will tell at bloom lake what the production cost will look like...but a couple of quarters is ridiculous to speculate over production costs in a mine or any business. My bet is costs drop significantly for a number of reasons...this being one of them...and when that happens and they get too low...they will also be wrong! It is what they average out to be over time that matters.

I have no interest in Cliffs...

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Green King on January 04, 2013, 12:15:50 PM

GK,

Its not a hypothesis...it's what I would do if it was my business...they would be idiots if I could prove it! Cliffs shuttered production in the U.S where production costs are much lower....only time will tell at bloom lake what the production cost will look like...but a couple of quarters is ridiculous to speculate over production costs in a mine or any business. My bet is costs drop significantly for a number of reasons...this being one of them...and when that happens and they get too low...they will also be wrong! It is what they average out to be over time that matters.

I have no interest in Cliffs...

Dazel.

Just trying to be scientific. :) Big bath accounting has been one of the common tools just wondering if there was way to see it other than Gaming the mind of the operator.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 04, 2013, 01:12:11 PM

Gk,

companies accounting is something that can be altered...usually to the companies advantage....so scientific is tough...as for a mining company...cost allocations...you can imagine the swing you could have as I pointed out.

Big bath describes it well... Does anyone care if Cliffs has production cost of $69 in the third quarter 2012? The answer is no...if they do in the first quarter 2013 with prices at $155...and they predict them falling to $60 over the year...the analysts jump up and down and raise the stock to outperform etc...it takes off...if it's high enough they go out and raise money etc...miners are cyclical...

In this case the investment community wrongly bet the cycle was over...if I am right about the Cliffs example they have loaded up future earnings during the good price environment where we are now at $155... Huge margin and cash-flow for 2013.

Short sellers jumped all over iron ore with both feet...end of the cycle...production costs too high etc...I still have not seen much on the massive upward move in iron ore prices..or in the price of the miners shares...

If Cliffs did what I think they did it will be home run at Bloom Lake this year....but no one will hear about it or care unless you were involved in the Cliffs short squeeze or profited from the raising share price on the incredible margin they pulled off. Cliffs by the way raised $500m from bond investors during this period in the blink of an eye.

The only reason I am talking about this is too help some not be afraid of the short seller headlines...do your homework...when the headlines come out...they drive the price down...no uptick rule and they cover on the fear.

Bloom Lake was brought into this short argument and Alderon was dragged in as well...as a comparison. Wrongly...in my opinion.

Altius is easy to understand...and as many here on this board have learned...it is a good way to invest in iron ore without worrying about the above games that go on in the stock market everyday.

Dazel.

Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on January 04, 2013, 07:55:05 PM
Quote
To take Cliffs production costs for a mine "bloom lake"  where they have had nothing but operational troubles and a change in strategy for a couple of quarters is "wrong".
I guess I am cynical... :P  There are a lot of companies that overpromise and underdeliver.  You can always blame failures on "operational troubles"... every mine has them.

Quote
I looked at your blog...you have asia pacific production costs at half of what they are.
I don't know.  I could definitely be wrong but I don't know which part you are talking about.

Quote
Your timing of your report is at the crash point of the iron ore market...your assumptions are on prices that are unsustainable for producers in the market globally not just the Labrador Trough.
I really don't know where iron ore prices are headed and I don't have a strong opinion on it.

Normally I'd rather not mess with iron ore because the price of iron ore and production of iron ore has gone up several times over the past few years.  This is highly unusual... theoretically you might expect a wave of overbuilding to eventually occur.  But... it's possible that iron ore prices don't crash.  Apparently China's infrastructure isn't overbuilt... even though they have too much high speed rail, real estate (their RE is the most overpriced in the world), too many malls, etc. they are lacking in other areas of infrastructure (e.g. sewers).  So I really don't know.  China is a huge anomaly in the iron ore/steel market and it could stay that way for a long time.

Quote
Example of the Alderon bash was that they used $115 in their PEA...instead of the market price of $135 at the time of production....
"which may indicate that they think the price of iron ore is coming down over time"....should they use $170 for the feasibility study if they think it will go up from the current $155?
The standard practice is to use the 3-yr trailing average.  I believe that's what the engineers are taught in school.

If they are assuming a low iron ore price, it makes the economics of the project look worse than if you assumed a higher commodity price.  So the technical report may potentially be understating the economics of the project.

At the end of the day... my thesis is that the Alderon/Kami mine will have economics slightly worse than Bloom Lake (take Bloom Lake's opex and add $15/ton).  That is my wild ass guess.  We'll see what happens...!  At current prices, I think I would rather be long Alderon than short it if I was forced to pick a side.

Quote
As for the bloom lake and Alderon bashing you have been doing...I will give you the benefit of the doubt as you and everyone else that joined the crowd in being wrong on iron ore pricing in August to October...
I don't really know where iron ore prices are headed.

Quote
We are talking about nothing when prices are this high...bloom lake production costs will come down and Alderon will be a successful mine.
I don't think Bloom Lake's opex will come down much.  I don't think that they will find operational efficiencies because they should have found them all after a few years of operation.  Larger operations (BL is expanding) will reduce opex since there are some economies of scale to larger operations.

Over time, opex will likely go up due to cost inflation, a higher strip ratio (*depends on the geometry of the deposit and the pit), lower grade ore, etc.  Inflation in mining costs has been much higher than the CPI over the last decade and I expect this trend to continue.  We are only finding lower quality deposits... they take more people and machinery to mine.  Higher demand for people and machinery is pushing up costs.  There hasn't been major technological advances that have pushed down exploration or mining costs (e.g. technology like what 3-d seismic did for oil/gas, shale exploitation for natural gas).

I do think that a Kami mine will be built.

Quote
And in your genius you will make a fortune on Altius!!!!
Yes we are both long Altius... why are we arguing!!  ;)

Cheers
Title: Re: ALS.TO - Altius Minerals
Post by: GlennAS on January 04, 2013, 08:34:47 PM
Dazel and ItsAValueTrap, like Biaggio, I must say I really appreciate the back and forth. After holding off for months now on taking a position in Altius, I established a full position this week at an average cost around $10.30.

Looking very forward to Alderon's cc next week. Excellent value in Altius shares, and now seems like as good a time as any to go "all in".

Kind regards,
glenn
Title: Re: ALS.TO - Altius Minerals
Post by: original mungerville on January 05, 2013, 02:26:01 AM
I echo those comments and am also thankful - I'm into Altius as well as of this week for a around 10.20 avg purchase price.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 05, 2013, 06:55:12 AM

It's a value trap,


I appreciate your time and effort...and I would like you to continue to speak your mind. That is what this board is all about...I think it is likely the one of he best educational mining conversations on the planet.

Thankfully, we both own Altius which is not really a mining company but the lowest cost royalty company on the planet....

Having said that...my point is t hat Alderon " may" be a 5 to 10 bagger...Thompson consolidated was a 20 bagger....so if you think that Kami's economics are a little worse than Bloom Lake well I can live with that. Bloom Lake was sold when the price of iron ore was $190 a ton in 2011. Cliffs immediately tried to expand it to take advantage of high prices...there is no way to know what was capex and what was production cost so I feel the cash production costs are wrong for now..the mine does not have scale yet.

Either way Kami gets built....Altius collects a royalty  in their estimates at $115 is around $30m a year...double that at a full 16  mta production. I will not bother to do the math on the price now at
$155 a ton. That as we know is nirvana to the stock price.

Kami will gain world interest as did Consolidated Thompson...I do not know that Altius equity investment will be another 5 bagger...or exactly what their cash cost will be...however, there is an extremely good chance with the rebound in iron ore prices against everyone's belief.... that Altius and Alderon are home run's. Right place right time and ton of work pardon the pun.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on January 05, 2013, 07:42:18 AM
Quote
Cliffs immediately tried to expand it to take advantage of high prices...there is no way to know what was capex and what was production cost so I feel the cash production costs are wrong for now..the mine does not have scale yet.
In the press releases for earnings, I believe that Cliffs states operating costs along with D&A.  That suggests that they separate out capex from production costs.

Of course, you can always play games with what to capitalize and what not to capitalize.  If they are leasing equipment or (this wouldn't make sense for Cliffs) using contract mining / renting equipment, it could unnecessarily inflate their opex... though the technical reports for Consolidated Thompson would state their intentions regarding leasing or contract mining.

- Consolidated was in the process of expanding the mine when Cliffs bought them out.  I think they were thinking of expanding in the feasibility study stage.

- If one were to really do the legwork, you could probably get a rough idea of opex between ~16MT/yr versus ~8MT/yr.  I am guessing that it is at most a 20% difference... it still doesn't bridge the gap between BBA's feasibility study numbers and actual numbers.
BBA's technical reports might give estimated opex for 16MT/yr versus 8MT/yr... I haven't checked.
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on January 05, 2013, 08:14:51 AM
In general, to predict the economics of a mine (to figure out what a mining project is worth):

- You could do a feasibility study.  This often takes millions of dollars as you do a lot of tests to optimize the processing plant's design, the mine's design, etc.  Some tests involve obtaining a bulk sample of the ore, make a pilot scale processing plant (which can cost tens or hundreds of millions of dollars for unproven processing technology), etc. etc.
The feasibility study should be pretty close, though there is always uncertainty (e.g. Vale's Goro project).  Engineering is not a perfect science (think of all the infrastructure projects that have crazy cost overruns).

- You could do a preliminary feasibility study / economic assessment.  Less accurate, less costly.

- If a mining company has done a full-blown feasibility study, then you could simply double-check their work.  Senior miners generally do this. 
If you look at the Bre-X scandal, Freeport Mcmoran didn't get burned because they sent a time in to double-check that the ore was real.  Normally, at the very minimum, you run assays on a number of drillcores (this is relatively) cheap).  Bre-X (this is highly unusual) destroyed all of their drillcore.  So Freeport brought in their own drilling team and duplicated Bre-X's drilling (drilling is expensive... at the very minimum Freeport spent several thousands of dollars).
As far as I can tell, institutional investors generally do NOT do this level of due diligence.  I definitely am not doing this level of due diligence.

- In the wake of the Bre-X scandal, various regulations were implemented.  NI 43-101 is the most relevant.  Unfortunately... I don't think you can really rely on NI 43-101 compliant technical reports.  There's a lot of charalatanism going on with such reports in my opinion. 

----------------

You know... I feel like a huge idiot when it comes to these mining stocks.  I can't say that I have really done my due diligence on them (compared to what many senior miners do).  So far, I rely on the following shortcuts:
a- Is management ethical?  The problem here is that very, very few managements in the junior space are ethical.  Almost all of them are undercapitalized and have to be promotional to raise capital.
b- Compare the project to something similar.  Hopefully they are similar enough that you can make a wild guess about the economics.  The accuracy of this is far below a preliminary economic assessment or pre-feasibility study.
c- Did somebody else do their due diligence?  Sometimes large mining companies will take a strategic stake in a junior.  (In Alderon's case, Hebei made a strategic investment.)  Sometimes they don't actually do their own due diligence and they get burned.
d- Read through the technical report and see if there is anything dopey.  Peter George's reports for example are generally dopey.  But this is an unreliable method as I didn't see anything dopey with BBA's work.

Are these shortcuts a good idea?  I don't think so.

Though here's a shortcut that may work:  If you look at Altius, it is buying back its own shares and isn't buying Alderon shares any more.  This would imply that Altius has a lower price.
Title: Re: ALS.TO - Altius Minerals
Post by: Phaceliacapital on January 05, 2013, 09:18:16 AM
I have been following ALS for a while now, and with the upcoming feasibility study of Alderon thought it worthwhile to do a write up. For those interested:

http://phaceliacapital.com/AltiusMinerals_PhaceliaCapital.pdf

Don't mind the blog, it is very under construction..
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 05, 2013, 09:20:19 AM
Its Value trap,

I do not pretend to be a mining expert and appreciate the points you have made on due diligence. I also know that Leucadia are not mining experts. Yet
they are two for two in home run's in the mining sector. My approach i think is similar to their thinking...is their a margin of safety? At fortescue they backed a self promoting stock broker Andrew Forest. why? because the economics at worse would give them their money back. Iron ore took off...home run.

Studying Leucadia led us to Altius...I think we are allowed to go back in time and get the positions that Leucadia had...with knowledge of where commodities have gone.
I look at Altius as Leucadia...except Altius is in a better position. why?
Because Brian Dalton and Altius bought their land leases before Leucadia did and they have many more of them (you cannot get these leases anymore without paying up...Leucadia's profitable hand has been played!)....fortescue gambled big time on taking on $10 billion in debt for a quick build out...and won...Altius has been slow and precise with Alderon...remember how long they have owned the land...they have not spent anything..they have I believe $2m into this project...that could produce a billion dollars in market cap for Altius...I do not know of anything like that anywhere...Leucadia spent $400m and took out about 7 times that...Inmet I am not sure how much they have made...(it is still ongoing with a bidding war for Inmet happening now)..."yummy"returns as Cummings from Leucadia said.

ethics-Altius checks out with the top tier in the industry

ethics Alderon- it checks out because of Altius' full backing...why would you bank your future on a royalty if you did not believe in it? they have played the long game

BBA- and other feasablilty studies? well I know Anglo American is $6b over budget in Brazil...it does happen...and I have seen some that are ridiculous.

Hebei- the fact is that they are securing iron ore...they are not playing a fools game..they need the product whether Alderon stock is a homerun or not

short cut: It is tough to buy something after it has doubled in price...so you can imagine what it would feel like for Altius to directly buy more at this stage.

In fact, they are buying more of Alderon through buying their own shares...They have spent $5m buying back their own stock over the last 12 months (sadly that is the most they can buy per day!)...We think that is the best investment they can make because not only are they buying a portion of Alderon's equity which they own they are buying back the royalty and all of the other projects and royalties for pennies on the dollar. We "Love" stock being bought back at these levels...we wish they could up the buy back.

To "believe" is to trust Brian Dalton and his team...the value (margin of saftey) is in the land leases they secured a decade ago and the cash they have generated internally. The "home run" is in the execution of Dalton (Dalton is in the alderon picture for the Hebei deal and I would think has been instrumental in that contract and any new ones that are signed) and his team... We are betting on both in a big way!

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 05, 2013, 09:45:27 AM
phaceliacapital,

thanks for the link...well done...I like your conservative approach...

I would add a couple things to people's thinking... on the upside of course our downside is covered. Mining Royalties trade at massive premiums
for good reason...(ITs A Value Trap) and I have beaten it to death...It is extremely difficult to produce an economical mine. The royalties are heavenly and inflation protected...they will be sought after like no other when the bond bubble bursts. Market mulitples take the value of the royalty up many fold...Leucadia had a problem here...their royalty at Fortescue had a timeline and Forest was trying to dilute them...Altius does not have those issues. Look at the average multiple of a royalty company...crazy.

another catalyst is uranium...more on that later.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 07, 2013, 04:33:22 AM
http://canadianinsider.com/node/7?ticker=ALS


Great buys!
Title: Re: ALS.TO - Altius Minerals
Post by: nostradamus on January 07, 2013, 07:11:46 AM
Hey Dazel

I would be very interested to hear your views/analysis of Altius' uranium assets. I find it hard to get overly excited and would like to be proved wrong.

I have no idea how to estimate the annual production of the Aurora/Michelin deposit that Paladin bought and on which Altius retains a 2% GSR.

However, Paladin's annual production is currently 8Mlbs of U3O8. So, let's say, for the purposes of illustration, that the Michelin deposit allows Paladin to double their production through mining another 8Mlbs (this would seem like an optimistic assumption). The current price for U3O8 is USD43.5/lb.

So if Paladin were producing 8Mlbs from Michelin today, this would give Altius a royalty of 8 * 43.5 * 2% = USD7m per year. Certainly great to have, but small relative to the kami royalty.

What am I missing?

N.



Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 07, 2013, 10:41:41 AM


N.

I will get back to you...uranium spot price is 43... Long term price is 60......there is a supply and demand misbalance about to happen...prices in the spot market move quickly...Altius will not collect at below 70 or 80...because that is what it will take to get production out of Michelin.

I agree...it is no Alderon...the economics there are crazy good.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 07, 2013, 11:09:01 AM


http://www.247bull.com/in-the-next-18-months-uranium-stocks-are-likely-to-rise-by-50-to-70/

Look at the chart of 2006 to 2007...

I do not like predictions in prices..but with Japan coming back online, Russia u.s nuclear arms dismantlement agreement ending, china and India build outs, energy costs globally...

With supply constraints taking place globally...it is a perfect storm. The high in 2007 that looks like a complete bubble only hit the 1976 currency adjusted price of 140...2008 and Japan have happened since then....oil has gone from 30 to 100...while the uranium price has been in free fall...all the
supply that was supposed to happen did not. The Japanese not only stopped their demand in their tracks they sold their inventory of uranium into the spot market...flooding supply...with a Japanese restart they will have to buy back inventory as well current supply for their plants...double their normal demand...

This is free at Altius as we know the 2% royalty is on the entire central mineral belt...tey have other uranium properties in their inventory of projects and leases.... at current prices this is
 a non event...we think that will change quickly.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: nostradamus on January 07, 2013, 11:26:40 AM
Cheers Dazel

I'm not really in a position to judge whether uranium prices are on the way up, but your points are quite compelling. If prices did return to their recent peak, I guess the properties would start to look a bit more like another Kami. The great thing is that this is just one of the many free options in Altius.

Back on iron ore, interesting to note that Mamba have raised some more funds to accelerate their exploration of the Snelgrove Lake Iron Ore Project:

http://www.reuters.com/finance/stocks/MAB.AX/key-developments/article/2670090

Other than Kami, what I'm really interested to hear some news on is the Julienne Lake project. It seems to me that even if Altius and their undisclosed partner were unsuccessful in their bid to develop it, their rights to the Altius owned extention will be worth a lot to whoever is successful...

N.
Title: Re: ALS.TO - Altius Minerals
Post by: Phaceliacapital on January 07, 2013, 01:05:09 PM
Anyone else excited for January 9?

+

Do not know for sure whether it has already been discussed but anyone seen their september presentation by Chad?

Link: http://altiusminerals.com/uploads/2012-Sept-Chicago.pdf

Cliffs:

(http://www.phaceliacapital.com/uploads/Kamiroyaltygraph.png)

And what do they mean with "Jurisdictional expansion underway "
Title: Re: ALS.TO - Altius Minerals
Post by: GlennAS on January 07, 2013, 01:13:48 PM
((And what do they mean with "Jurisdictional expansion underway"))

Exploration alliances outside of Newfoundland/Labrador - specifically, (i) alliance with Virgina Mines in Southern Labrador and Eastern Quebec, but more importantly (ii) alliance with Zeus Capital in Chile.

glenn
Title: Re: ALS.TO - Altius Minerals
Post by: Phaceliacapital on January 07, 2013, 01:41:53 PM
Oh bummer, I misread it and thought it hinted towards more clarity concerning the Julienne lake property, thanks!
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 08, 2013, 06:03:14 AM
http://www.metalbulletin.com/Article/3138029/Iron-ore-and-coking-coal/Spot-635-Fe-iron-ore-prices-now-at-158-160.html

Iron ore hits $160!!!!!!!!
Title: Re: ALS.TO - Altius Minerals
Post by: Phaceliacapital on January 08, 2013, 11:12:47 AM
Incredible, I bought additional shares Altius today at around 11

http://www.grandich.com/2013/01/grandich-client-alderon-iron-ore-18/

Quote
What does this mean for Alderon?  Well, the above deal implies a value of $7.3B for 100% of the asset (15% for $1.1B), which is located approximately 17km from Alderon’s Kami Project.  Using a spot price of $110/tonne of concentrate (current price is around $140/tonne), mining analysts estimate the EBITDA to be $1.2-$1.3B annually.  This would in turn imply an enterprise value/EBITDA of approximately 5.5x.  Assuming the same spot price of $110/tonne, EBITDA for Alderon’s 75% interest in the Kami Project should be approximately $370M after general and administrative expenses.  At 5.5x, this works out to an implied enterprise value (EV) of just over $2B.  Using the results of Alderon’s Preliminary Economic Assessment, Alderon’s 75% share of the capital expenditures for the Kami Project is $800M.  This would work out to a market cap of about $1.2B once the project is in production – current market cap is only $240M.

Another way to value the Kami Project is to look at the implied EV/tonne of annual production.  The AMMC mine can produce 15M tonnes per year (mtpy) of iron concentrate.  If you assume a cost of $2.5B for the pellet plant and rail/port infrastructure, then the mine and mill would be valued at $4.8B ($7.3 – $2.5 = $4.8).  Based on 15mpty, this works out to $320 per tonne. Alderon plans on producing 8mtpy (they plan on ramping up to 16, but I’ll ignore that for this exercise) from Kami.  75% of 8mpty translates to 6mpty.  Multiplying that by $320 per tonne gives an approximate value of $2B.  Subtract the $800M capital cost and you also have an implied future market cap of $1.1B – again, current market cap is only $240M

The numbers are discussable of course, but I guess we all agree upon the upwards potential :)

Concerning the Feasibility study, in contrast to the PEA this study accounts for Rose central + North Rose
This adds an additional 500m tonnes to the equation..
Title: Re: ALS.TO - Altius Minerals
Post by: zippy1 on January 09, 2013, 04:39:23 AM
Quote
Alderon Announces Feasibility Study Results Demonstrating $3.244 Billion NPV and 29.3% IRR for the Kami Project
http://finance.yahoo.com/news/alderon-announces-feasibility-study-results-080500452.html (http://finance.yahoo.com/news/alderon-announces-feasibility-study-results-080500452.html)
Title: Re: ALS.TO - Altius Minerals
Post by: Phaceliacapital on January 09, 2013, 05:02:06 AM
Quote
"The study demonstrates robust economics on the Kami Property and the results meet all of the threshold criteria under our agreements with Hebei. Our schedule anticipates receipt of permits toward the end of 2013 and construction to follow immediately, with initial production in Q4 2015."

Very good news!

Thanks!
Title: Re: ALS.TO - Altius Minerals
Post by: Phaceliacapital on January 09, 2013, 05:19:03 AM
Really striking that the news is not even related to Altius on any of the news sites.
Title: Re: ALS.TO - Altius Minerals
Post by: GlennAS on January 09, 2013, 06:14:44 AM
Importantly for Altius investors, the Kami BFS projects a life-of-mine of 30 years, up from 20 years in the PEA. That's another 10 years of royalties on the 8 mtpa production.

glenn
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 09, 2013, 06:43:15 AM
Alderon's conference call was very informative.

All of the questions we had were answered.

Major one Bloom Lake vs. Kami. on costs.

-Alderon is being designed in the same operational scope as IOC. ( which makes sense since they have the man who constructed IOC's expansion)
hence they have a different design than Bloom Lake. It was very apparent that they are using their IOC knowledge and experience in this project...not comparable operationally to Bloom Lake.

Bloom Lake high costs
-they fly in labour (like IOC, Alderon will employ and house locals)
-they have 3 rd party managers...Alderon will be doing it in house
-Cliffs as a large organization has associated costs (this is likely a nice way of describing my accounting theory)
-They truck out tailings
-they boat material and then load to ship
-rail deal at Cliffs is not as good as Alderon is looking for...(there was a question asked on the call on how Alderon think they will get a better deal)

Study facts
-the study uses $115 and backs out shipping and the discount to Hebei..$107 (1-5 years) $102 (afterwards)
-255mt at mill lake not incuded in the study...When asked if there is upside to the 30 years. "absolutely"
-Hebei now has 15 days...$120m in early Febuary.
-higher start up costs associated with the extra build out of the 500 mt added to the study

questions answers
-Hebei has seen ore samples
-debt equity raise next year between 45% to 60%...
-looking for a strong top tier equity- off-take partner for remaining production
-do not need financing before economic assesment
-long lead equipment will be purchased now in anticipation of construction start up
-rail contract in 2013 likely
-hydro contract in 2013 likely

management was confident and knowledgeable....

Dazel.

Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 09, 2013, 06:46:56 AM

Glenn,

"-255mt at mill lake not incuded in the study...When management was asked if there is upside to the 30 years. "absolutely" "

This makes me giddy for Altius!

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: zippy1 on January 09, 2013, 07:07:20 AM
Alderron is actully down almost 9% right now.  Wow! so expectation must be really high there.
Title: Re: ALS.TO - Altius Minerals
Post by: PullTheTrigger on January 09, 2013, 07:15:25 AM
Duetsche Bank Commodities Outlook:

http://www.commodities-now.com/news/power-and-energy/13497-deutsche-bank-commodities-outlook-2013-.html
Quote
Bulk Commodities: Iron ore markets have moved sharply higher over the past month and we believe that prices could reach USD170/tonne over the next quarter.  This reflects a combination of expected re-stocking in China and possible weather issues affecting supply in Brazil over the next few weeks.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 09, 2013, 07:16:21 AM

The market was expecting Hebei to release the $120m...thinking that Alderon would have already submitted the study 15 business days ago to them....I may "personally speculate" with a short term trade on Alderon...

Hebei will gladly fork over the $120 m...they are going to do very well on their transaction.


Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Phaceliacapital on January 09, 2013, 07:18:51 AM
Thanks Dazel, very informative.

What are the chances that a call transcript will be available??

On a TA side of view: ADV crossed its 200 DMA at 2.2, I think atm algos and other TA traders are "testing" this level, its down to 11%, there is no rational explanation.
Title: Re: ALS.TO - Altius Minerals
Post by: Phaceliacapital on January 09, 2013, 07:19:46 AM

The market was expecting Hebei to release the $120m...thinking that Alderon would have already submitted the study 15 business days ago to them....I may "personally speculate" with a short term trade on Alderon...

Hebei will gladly fork over the $120 m...they are going to do very well on their transaction.


Dazel.

Thinking the exact same thing but I would have to move cash around, upside at, 20% ST?
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on January 09, 2013, 10:48:22 AM
The feasibility study states operating costs of $42.17 per ton of concentrate.  This includes transportation costs to Port of Sept-Iles and loading/port costs ($25.98/ton without those costs).  This would make Alderon one of the lowest-cost iron ore mines in the world.  Yeah right.
This will likely be a repeat of history considering BBA authored this report.  Real-world operating costs will likely be slightly above those of Bloom Lake.  (If you compare BBA's reports for Kami versus Bloom Lake, Kami has slightly higher opex and quality deductions.)

If you simply compare Kami to Bloom Lake/Consolidated Thompson, I think Alderon's stock still looks undervalued.

2- Hebei's investment in Alderon is a big vote of confidence in it in my opinion.  They likely have done a very high level of due diligence on Alderon.  Technical reports by BBA are a joke... Hebei likely did their own homework.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on January 09, 2013, 01:33:06 PM
The feasibility study states operating costs of $42.17 per ton of concentrate.  This includes transportation costs to Port of Sept-Iles and loading/port costs ($25.98/ton without those costs).  This would make Alderon one of the lowest-cost iron ore mines in the world.  Yeah right.
This will likely be a repeat of history considering BBA authored this report.  Real-world operating costs will likely be slightly above those of Bloom Lake.  (If you compare BBA's reports for Kami versus Bloom Lake, Kami has slightly higher opex and quality deductions.)

If you simply compare Kami to Bloom Lake/Consolidated Thompson, I think Alderon's stock still looks undervalued.

2- Hebei's investment in Alderon is a big vote of confidence in it in my opinion.  They likely have done a very high level of due diligence on Alderon.  Technical reports by BBA are a joke... Hebei likely did their own homework.

Trap, thanks for balancing discussion.

"the Feasibility Study ("FS") on the Rose Deposit of the Kamistiatusset ("Kami") Iron Ore Property in western Labrador. The FS was completed by BBA Inc. ("BBA") located in Montreal, Quebec, Stantec Consulting Ltd. ("Stantec") located in St. John''s, Newfoundland & Labrador and Watts, Griffis and McOuat Limited ("WGM") located in Toronto, Ontario, and is effective as of December 17, 2012 "

-would having 3 different firms involved in the evaluation  not help with the validity of the analysis, roughly speaking. Am I naive to think that a smart (I assume), sophisticated buyer like Hebrei would do a very thorough evaluation i.e. personally I am banking on Dalton + recent buy in by Hebrei that there is a very good project there.
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on January 09, 2013, 02:15:34 PM
Here's how a senior miner would usually do due diligence on the project:

A- Re-assay some of the drillcore.  Freeport Mcmoran essentially did this when they wanted to buy out Bre-X... that is why they didn't get burned unlike the institutional investor community.

B- Check that the resource model is appropriate.  You need a copy of their computer files and a competence resource modelling engineer.
Oftentimes, companies have overly aggressive resource models.  The drillholes only sample a very tiny % of a resource body.  Everything else is a guess.  There is room to get pretty crazy with that guess.  Peter George / Barkerville would be an extreme example.  (Oh yeah... he is not in jail.  The bar to actually end up in jail is extremely high so there is a lot of bad behaviour that you can get away with.)

C- Check the engineering assumptions.  You need to a copy of all their work and a team of specialized engineers (metallurgy, infrastructure, mining, etc.).
There is a lot of room here to get overly optimistic.  Remember that any errors in predicting the economics of a mine can be multiplicative (is that a real word???)... so you could throw out some crazy numbers without getting into legal trouble.  Like what happened with Bloom Lake / Consolidated Thompson / BBA and the mythical <$40/ton opex.

D- Check that the title to the property is good.  Which requires a lawyer.

Clearly... I am not doing this level of due diligence.  I don't have a copy of all the technical data.  In theory I could calculate esoteric stuff such as whether or not Alderon's pit slope angle is reasonable (this affects mine economics)... but to do that, you would need information on soil characteristics (how elastic it is, etc.).
And I do not have a team of specialized engineers.

Quote
Am I naive to think that a smart (I assume), sophisticated buyer like Hebrei would do a very thorough evaluation
In rare cases, companies don't actually do due diligence when buying a junior.  There was some example in Pierre Lassonde's book on gold which I forget.

Crazy Eddie (the electronics retail mega-fraud) is an example of private equity not doing enough due diligence.

Warren Buffett bought GenRe... got burned on their derivatives unit.

You can't always assume that the buyer did thorough due diligence.

Quote
Can you tell the board why IOC has costs in the range that Alderon is talking about? And go through the points from the conference call that describe the high cost structure at Bloom Lake.
I didn't listen to the conference call... hopefully there is a transcript.

Because I don't have access to technical data and a team of specialized engineers... I don't have a very good idea about what the Kami project's potential economics will look like.

Regarding Alderon versus Bloom Lake... you could always make claims about Alderon/Kami having better economics even if it were the other way around.  Many of the economic assumptions are *subjective* and you won't end up in jail for being ridiculously optimistic.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 09, 2013, 02:24:28 PM

I erased a message for you Trap...i will send later..i don't want to waste your time...we are both Altius backers and production for 30 plus years is well
a home run...enough said.

I feel it is important to relay the message that Alderon shareholders were given today...Alderon is an IOC copycat not Thompson Consolidate or Cliffs...is $42 costs possible? not likely for a long time...I think you would add the discounts you often refer to the costs...They have taken them off revenues..bringing them to $107 and $102...so likely add $8 and $13 to costs.


*Alderon also had Bectel engineers look at the study ( conference call)...

I will post some IOC information for us all...I have seen their margins...they are impressive. As an Altius investor it is in our best interest for management to build out Kami and stay on as operators...One problem with Bloom Lake is that all the operators got rich and left. Cliffs hired third party contract operators with nothing at stake...as you will note they fired many of them recently.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on January 09, 2013, 02:29:11 PM
ItsaValueTrap, thanks for the post. Its good to have knowledgeable posters like you and Dazel.

FWIW, I feel reassured that a poster with a name ItsaValueTrap, is also long ALS.
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on January 09, 2013, 02:57:11 PM
Quote
-they fly in labour (like IOC, Alderon will employ and house locals)

Fly-in fly-out labour:
I could be wrong here as I only researched this today.

Bloom Lake mine is at
52°50'11"N   67°17'1"W
According to google maps, this is a 16min drive to Fermont.  38min drive to Wabush.

I am guessing that Cliffs is flying people into Fermont/Wabush where they live for their rotation.  There they drive to work.  Presumably the shortages of labour is bad enough that they can't find enough Fermont/Wabush residents to fill all the roles.  (And/or they can't convince people to move their families to Fermont.)
This job posting:
http://www.infomine.com/careers/jobs/job865760/reliability.engineer.flyin.flyout.montrealfermont.aspx
suggests that Cliffs will hire you if you move your family to Montreal; they will fly you in and out of Fermont.

I am guessing that Kami will also need fly-in/fly-out labour???????  Maybe they are on some pipe dream where they train locals so that they can fill more of the skilled jobs?

If the Kami project starts up in the area, I would expect even more shortages of accommodation, labour, etc.  These shortages already exist???

Quote
-Cliffs as a large organization has associated costs (this is likely a nice way of describing my accounting theory)
I would figure that Alderon would have higher G&A as a percentage of its market cap.

Forbes and Manhattan-related companies (and anything Stan Bharti-related) tend to have very high G&A, overpaid board members, etc.  They're on the more ridiculously overpaid side of the spectrum.

All of the directors get paid six figures.  Dalton pulls in almost a million dollars in options grants... not bad for a part-time job!!!  But he is not the highest-paid part-timer there.  F***ing obscene.

The highest paid Cliffs director was paid $225,933.  Of course, Cliffs market cap is far higher than Alderon's.

Junior mining... makes me angry sometimes.  Lol.  I try not to look at circular filings on SEDAR.

Quote
-they have 3 rd party managers...Alderon will be doing it in house
-They truck out tailings
-they boat material and then load to ship
-rail deal at Cliffs is not as good as Alderon is looking for...(there was a question asked on the call on how Alderon think they will get a better deal)
dunno

----------------
On the metallurgy side, you would expect Kami to have higher costs.  They will likely do more processing on the ore to get the manganese content down.

More processing also means they throw away more iron ore.  This will raise mining costs since they have to mine a little more to get the same amount of concentrate/product.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 09, 2013, 04:05:48 PM
Trap,

You are making me work...not sure why since I am Altius investor....information good or bad always helps...and I am sucker to find it.

Conference call...Part of the increased capex cost at Kami was that their housing complex they initially had planned was too small...it will have to be larger...they will not be flying workers in and out. They will be following IOC's business plan.

Bharti...is gone from what I can see ( he is not well liked) Morabito remains...the only Consolidated Thompson guy on the management team is the geologist...which is very smart of course...

The management is an IOC team. They know what they are doing (Richard quesnel from Thompson consolidated had no experience in Labrador- more on that later) as Carol Lake is about the same distance from Alderon as Bloom Lake....Alderon and Carol Lake are both closer to Labrador city...as you will remember kami is 2 km from a paved road...easy to get in and out.
Happy to pay Dalton....he is the one in China.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on January 09, 2013, 07:10:39 PM
Quote
Conference call...Part of the increased capex cost at Kami was that their housing complex they initially had planned was too small...it will have to be larger...they will not be flying workers in and out. They will be following IOC's business plan.

The housing complex seems to be for non-local construction workers during the construction phase.

IOC has been trying to get their union workers to allow them to have some fly-in/fly-out (FIFO) workers.  There has been a lot of resistance to that plan because:
A- If you don't allow FIFO, then maybe the supply/demand situation will force higher wages and there will be more jobs for the union workers.
B- Arguably, FIFO workers create issues for the community (crime, not invested in the community, etc.).
It looks like IOC won't have any FIFO workers in the meantime.  They'd need to hire people who choose to move their families to Wabush/Fremont/Labrador City.
C- Part of it is preserving the social fabric of the town(s).  Without jobs, things will get painful for the community.

The labour and housing situation there is a little crazy.  If you make less than $65k, you are eligible for affordable housing programs.  Rents have skyrocketed due to the need for a lot of labour in that area... non-locals (or their companies that are paying for them) are driving up rents.
Title: Re: ALS.TO - Altius Minerals
Post by: Phaceliacapital on January 10, 2013, 04:19:30 AM
http://finance.yahoo.com/news/nalcor-confirms-power-supply-alderons-113000223.html

Quote
"This will fulfill a major infrastructure requirement for the Kami Project and will allow us to continue to move forward on our development timeline. We are now engaged with Nalcor in a process that will lead to the completion of detailed engineering and conclusion of a mutually acceptable Power Purchase Agreement. This is very positive news for Labrador West, as this project will bring tremendous benefits to the region. We are pleased that Nalcor recognizes the importance of supplying power for industrial development right here in Labrador."
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 10, 2013, 06:31:53 AM

Trap,

IOC has advertised in Ireland a great deal to move families there to work at Carol lake. They are looking to create a continuity in the labour force....through experience they realize the Importance. More importantly management needs to know what they are dealing with in the environment. It looks to me like Bloom Lake has blown this since the beginning....from Quesnel on through...great asset but the people matter as you know.

Thanks. I would not have gone in this deep without you Trap...After digging into Bloom Lake...it looks Quesnel was an outsider and building the first mine in the area in sometime you have to cut him some slack i guess...Cliffs picked up where they left off...as we know Cliffs Wabush mine is a disaster

It looks like Morabito learned from this and hired IOC intelligence and local expertise. To me it looks like the management team at Alderon is the Canadian Olympic hockey team (NHL included) which is proven over time (IOC)...compared to the Russian Olympic team who have great talent but you have brought them into Canada to work for 4 years...they are great in Russia and other places but they do not know the lay of the land nor would the people cut them any slack. They lack longterm view because they know they will be leaving shortly.

Sorry...with NHL coming back on line could not help it!

It looks like the media and myself included have been wrong in our comparison of what Alderon's intention is. They are not looking to Bloom Lake to duplicate it...they are looking to Carol Lake to duplicate it using Bloom Lake asset value as a measuring stick.

In other words...they do not want to be the son of Consolidated Thompson....they want to be the brother of Carol Lake.

As an Altius shareholder this what we want to see...longevity.
More to come...

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on January 10, 2013, 07:01:59 AM
They talk a good game but then you look at how insiders at Alderon are paid... these guys (Stan Bharti, Forbes and Manhattan) are charlatans who overpay themselves.  How are they going to keep costs down when they are paying their board of directors more money than a mega-corporation like Cliffs?

I think that once the mine is fully financed, Altius will actively look at selling their Alderon shares.  They are obsessed with royalties because they know that the equity is usually terrible... I don't think that Alderon will be an exception (just look at other Forbes and Manhattan companies like Aberdeen International... an example of not making money in a commodities bull market).
I think that Brian Dalton doesn't say anything bad about their joint venture partner because he wants Altius to sell its prospects to other piece of poo juniors out there (backstabbing your partners is not a good idea).  Because in any other world, it would not be unreasonable to fire Stan Bharti and all the other overpaid hacks at Alderon... and to bring other salaries down.

2- IOC's management has been trying to keep its costs down... that is why they keep asking for FIFO from their union.

The labour disputes between the union and IOC suggest that they haven't been great managers on the labour relations front... it seems the union has gone on strike multiple times in the past.

*I own a few hundred shares of Aberdeen International... I'm the idiot scalping that piece of poo trading below liquidation value.

Quote
as we know Cliffs Wabush mine is a disaster
Wabush is a very old operation... it has been around for decades.  A lot of its operational issues are due to age.  Its high operating costs have to do with ages... a mine's economics will get worse over time since you mine the best ore first and things like the stripping ratio usually increase over time.

I have no idea if Cliffs has been doing a good job at operating it.  Usually operational skill doesn't have too much impact on a mine's economics.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 10, 2013, 11:55:08 AM
http://www.labradorironore.com/files/Labrador%202011%20Annual%20Report_FINAL_v001_m6v0tt.pdf


http://www.theaurora.ca/News/2008-02-11/article-1564051/Largest-getting-larger/1

Alderon's management is stacked with Iron ore company of Canada former leadership that were responsible for IOC's numbers...see page 5 of the annual report linked above..

As Trap said old mines have issues...Tayfun and his team were responsible for the expansion at IOC. The numbers at IOC have been excellent.


Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on January 10, 2013, 10:32:35 PM
The market was expecting Hebei to release the $120m...thinking that Alderon would have already submitted the study 15 business days ago to them....I may "personally speculate" with a short term trade on Alderon...

Hebei will gladly fork over the $120 m...they are going to do very well on their transaction.

Dazel.

Dazel, watch out! You are probably having a psychological bias here. The market did not discount Alderon by 10% for a 15 days delay, even Mr Market is not that short sided! Take some time to think what you would think of the situation if you were short Alderon, maybe you'll get some balance. :)

BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: Green King on January 10, 2013, 11:07:36 PM
what will happen if Hebei doesn't pay ?
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on January 11, 2013, 03:49:33 AM
I think the stock would drop a lot.  It would imply that Hebei doesn't think that the project is economic (even after their sunk costs).

I think that Hebei will pay though... unless there is some subtlety / unexpected surprise that popped up in the feasibility study.
Title: Re: ALS.TO - Altius Minerals
Post by: original mungerville on January 11, 2013, 04:22:48 AM
I understand far fewer of the details than Dazel and Itsavaluetrap but from a bird's eye view, I would look at this whole thing like a series of independent probabilities for each independent event. Interestingly, if 3 of the big required events have a 90% chance of success, then the overall odds of success are low 70s% (ie 0.9*0.9*0.9). I would suggest those more familiar with Altius put some numbers to these events. This would be the mental framework I would use.

Anyway I might see these three things as roughly the following: 1) project funding, 2) guess?: environmental assessment, 3) implementation/operational issues

1) Project funding: Hebei paying (maybe 90% odds?) - I think Hebei paying is pretty key as with that plus the market cap of Alderon, there should be enough to work with to raise the equity and debt to fund the project (95% sub-odds here maybe; so virtually 100% so let's neglect the odds of raising the rest of the funding if Hebei pays in). Given the funding (which is likely post Hebei paying in), the next hurdle I see may be...

2) Environmental assessment? - do others agree this is the next big hurdle?...no idea but I would not put the odds higher than 80%,...then...

3) all other operational / implementation issues - odds no higher than 90% chance of success.


Before Hebei pays, I am at something like mid 60s% chances of success. Post Hebei payment, those odd rise to low 70s. Once the EA is done, I am at 90%.

I would expect Altius stock to rise with each of these hurdles, and as the discounted project implementation timeframe approaches continuously. From this perspective, I can see why the market is very focused on the Hebei payment.

Finally, I don't think the mine will be operational in 2015. I would guess 2016.

Now, wrap all that up and don't forget iron ore prices can either go up or down a lot in the meantime - so there is risk here too (to the upside and to the downside). On this front there is more risk to Alderon than to Altius. Same for the 2015 vs 2016 start and same for the operational issues.

I see the main risk to Altius being Hebei payment and the EA. (whereas Alderon, in additional, would have more exposure to the operational issues, and also a delayed start date.)

Would love Dazel and Valuetrap to puts some odds on the EA (and assess whether I have the right 3 components listed above or not)





Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on January 11, 2013, 04:42:13 AM
I don't think that the EA will be a big hurdle.  They will almost certainly get it... the question is when.  I don't believe there are any First Nations or environmentalist/NGO issues that would cause unusual delays to the EA.

I don't see operational issues as being that likely.  All the technology is pretty well understood.  There might be unexpected cost inflation due to shortages of labour and housing (if you make less than 65k you are eligible for affordable housing.... no joke) in the area... the feasibility study may have already taken some of this into account.  I wouldn't be surprised if Alderon underestimates cost inflation... it has been going up dramatically in the past decade.  On cost inflation you probably won't miss by more than 10%.
Of course the BBA feasibility study is a joke.  I think Hebei has a better idea than most people what the real numbers are.

The biggest factors likely would be:
1- Iron ore prices.
2- Risk appetite.  People will pay different prices for iron ore assets depending on how optimistic or depressed they are... it's just like Mr. Market.  Sometimes seniors will get into bidding wars over deposits because nobody knows what the correct price should be.
Mood swings among investors will affect Alderon's share price and its ability to raise equity financing.
Mood swings among senior miners will affect their appetite for M&A.  A lot of seniors right now are selling iron ore assets and their low share price makes it difficult for them to finance new mines.  In the future, this could all change.  (Plus, you usually want to buy at the bottom of a cycle anyways when everybody is fearful.)
3- The relative attractiveness between Kami and other deposits in the area could play a factor.  A better deposit could get bought out/financed first.
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on January 11, 2013, 04:53:50 AM
What I would expect to happen is this:

A- Hebei puts in the rest of their money.
B- Alderon will go ahead and start constructing the mine... even though they may not necessarily have all the permits and financing in place.  Because of A, they have the money to start early construction.
The benefit of being crazy like this is that it means that the mine will get built faster (assuming no permit delays and they get financing)... which increases the present value of an eventual mine.
C- They definitely do not have financing in place.  So they will really get aggressive about promoting the stock and trying to raise equity.
If senior miners were in the mood for M&A (many aren't), I am sure that Alderon would shop the project to them too.  Alderon wants to get bought out or to raise capital to build the mine themselves.
D- If the mine doesn't seem like it will be economic, the Alderon team may try to raise money and get it built anyways.  (But Hebei's investment in Alderon is a big vote of confidence assuming they did their due diligence.)

There is a good chance that Altius will not use its cash to help finance the mine.  Altius wants to be in the high-margin/high-value added prospect generation business (and royalties and what Cranberry is doing and royalty/stock flipping), not in the mediocre mining business.
Title: Re: ALS.TO - Altius Minerals
Post by: original mungerville on January 11, 2013, 06:29:00 AM
I guess my point from an Altius perspective is that the key issue is the Hebei financing, because once that payment is made, there is a far higher likelihood of the project going forward. Altius just needs it to go forward to get the royalties flowing. Their investment in the equity of Alderon is likely less important than the royalty, so they just need this thing to get done (delays and operational issues and the related additional financing those would require - either debt and/or equity - are more of an Alderon problem than an Altius problem).   

I would not dismiss the EA but I have no clue about how much of a factor this could be. I just would think those can be sensitive approvals at times. Having said that, if there was strong opposition, we would have seen it in local news by now probably...

Anyway, the point is that I think the Hebei payment is probably a big deal and it would probably make sense for Mr Market to be cagy until that comes in.
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on January 11, 2013, 06:48:17 AM
Hmm I forgot about the controversy over Muskrat Falls.

http://www.theglobeandmail.com/news/national/marathon-filibuster-over-muskrat-falls-hydroelectric-project-ends/article6691092/

It looks like the hydro project will go through, which means that Kami will have enough power.

Quote
Anyway, the point is that I think the Hebei payment is probably a big deal and it would probably make sense for Mr Market to be cagy until that comes in.
I honestly don't think it is a big deal.  It really comes down to the economics of the mine... if the economics are good, Hebei will buy in.  (They have sunk costs and the off-take agreement which makes it more economic for them.)  If the economics aren't good, then they probably will not unless they are stupid.

Iron ore pricing will make a huge difference on Kami's economics... this will come down mostly to luck.
Investor sentiment will affect Alderon's ability to get financing... as we all know, Mr. Market's moods fluctuate dramatically.

I think that the equity in Alderon is worth more than the royalty.  A simple way of looking at it is this:

If the profit margin on the mine is 10%, then the equityholders will see 70% of the profits and the 3% royalty holder will see 30%.  The equity should be worth 7/3 times that of the royalty.
If the profit margin on the mine is less than 10%... then in hindsight you should not have built the mine.  In practice, this can happen if iron ore prices drop in the future.  But one might expect that you only build a mine if the expected profit margin is at least 10% (preferably far more).

If the profit margin on the mine is higher than 10%, then the equityholders will see a greater share of the profits.

A rule of thumb in mining is to look for a minimum IRR of 15%.  (But then you could look at the abysmal performance of gold mining stocks... they collectively chased projects with poor economics.)
Title: Re: ALS.TO - Altius Minerals
Post by: original mungerville on January 11, 2013, 09:18:33 AM
Itsavaluetrap,

If Altius owns 1/4 of Alderon with a 10% profit margin on Kami, that's earnings for Altius of 2.5% of revenues from Kami. Then let's put a 8x p/e on that - so that's a market value of 20% of the revenues of Kami.

If Altius owns 100% of the royalties of Alderon and its a 3% royalty, that's earning for Altius of 3% of revenues from Kami. Then let's put a 10-16x p/e on that - so that's a market value of 30 - 50% (avg 40%).

So the Altius Royalty is worth double what its equity stake in Alderon is worth - and that's BEFORE cost overuns and delays (which will bring down the value of the equity stake due to dilution).

So figure on 3x instead of 2x more valuable. As an Altius investor, I would focus on the variables that drive the royalty, and not the equity value of Alderon. No?

Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on January 11, 2013, 11:43:16 AM
Hmm the value of the equity and the royalty are related to each other.

The equity is trading at a valuation that implies that there is a good chance that Kami does not turn into a mine.

2- In general, there are a few values of valuing an asset:
a- Discounted cash flow.
b- Public market value / comps.
c- Private market value.

For A, you plug in an iron ore price and the % chance that Kami becomes a mine.  But this model may not be entirely satisfactory since you have to estimate the proceeds of an Alderon financing.

C fluctuates wildly.  What would a senior miner pay for Alderon in a takeover?

B is difficult since mining assets aren't directly comparable.  A good valuation would have a range of possible values embedded in it I think.

---
My best guess for the royalty's value compared to the equity is that the royalty should be 3/7th to 3/17th the price of Alderon's market cap.  So 37M to 90M dollars with Alderon at $2.08.  I don't think you can justify a value above 90M... unless you can forsee that the Kami mine will get built even though it will be a financial disaster.

I think Alderon is underpriced.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 11, 2013, 12:37:10 PM

Beer Baron,

Agreed...very biased..I am going to put a clamp on my large mouth! There is only one short thesis..and that is Hebei not paying up...once they have...they will have secured an enormous resource...they are likely very excited about prospect as they rarely get a chance to profit from securing valuable supply...I think this is what is being missed.

Shorting Altius? Well I wish someone was...

Our recent excitement is in Alderon's IOC connection...take that for what it is worth...

As for the Alderon royalty vs. Equity valuation....for Altius it is heads I win and tails I win...

Don't underestimate what the Hebei money does to the market perception of both Altius and Alderon...they are both stupidly cheap...

I will be quiet for awhile until the Hebei money comes in...smiling and counting our shares.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 14, 2013, 05:16:43 PM
http://www.reuters.com/article/2013/01/14/uranium-one-private-idUSL6N0AJ0BA20130114?feedType=RSS&feedName=utilitiesSector&rpc=43



http://finance.yahoo.com/q?s=Pdn.to&ql=1


Sorry could not help myself...has nothing to do with Alderon! This is a major trigger for the uranium market as state owned Russian company is buying out Uranium One...

The state knows that they will not be renewing their uranium deal with the U.S...

Altius has tremendous expertise and land leases other than the former Aurora project in Uranium. They will be in demand soon.

The Michelin project does not seem like a big deal at about $9m a year...however, royalties trade at 15 to 20 times that amount...it would add market cap of over $100 million to the stock...not to mention the other deals they could create at $80 uranium..

Dazel.
Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: original mungerville on January 14, 2013, 11:53:58 PM
Dazel,

What kind of multiple does the market put on a royalty stream (which stream we should adjust to after-tax dollars) vs an after-tax earnings stream for a mining company?

Is it in the neighbourhood of 2x more - ie p/e of 14 vs 7 or something along those lines? Let's start with iron ore because its "on topic"....:).
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 15, 2013, 06:34:01 AM
http://finance.yahoo.com/q;_ylt=AhgtBucA9HFPFGbUFMe.vvWiuYdG;_ylu=X3oDMTIwOGJrNXZ2BG1pdANXaWRlIFF1b3RlcyBNb2R1bGUEcG9zAzEEc2VjA01lZGlhUmVjZW50UXVvdGVzUG9ydGZvbGlvc1dpZGU-;_ylg=X3oDMTFpNzk0NjhtBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25z;_ylv=3?s=LIF.TO


Mungerville,

There are not many iron ore royalties out there for public companies to compare multiples. Labrador iron ore royalty has both and trades at a PE of 21. It is very comparable to Altius because they are neighbors and the Alderon management ran IOC which is their only asset.

If you look at other royalties it is forward projected cash flows that trade at 15 times..Their current multiples are in the range of 30 to 50 times...obviously giving multiples that are 2 to 5 times greater than straight mining company multiples...

Mining royalty companies that have long lasting economical mines  are the greatest companies on the planet and they will continue to command superior multiples. They are inflation adjusted bonds...and in and environment of record low interest rates...we do not see that changing.

Dazel.


Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 17, 2013, 05:52:07 AM

Are there any Altius shares short? Is anyone that stupid? I have never bothered to check.

Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: Ross812 on January 17, 2013, 07:15:39 AM
Up 7% on 2x volume... I can't find any news. Alderon is flat. Does anyone know what is going on?
Title: Re: ALS.TO - Altius Minerals
Post by: Phaceliacapital on January 17, 2013, 09:21:56 AM
No clue, also no news on SEDAR
Title: Re: ALS.TO - Altius Minerals
Post by: Ross812 on January 17, 2013, 09:45:39 AM
So its up 14% on 6x the daily volume on the Toronto exchange and 10x volume on the pink sheets with no news? I guess it is under a million dollars in shares though. It may just be a fund getting in...
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on January 17, 2013, 09:50:28 AM
Dazel probably decided to load up the truck. Maybe he's getting close to control ownership by now :)

BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on January 17, 2013, 09:58:43 AM
I don't think that any big fund would get in that sloppy.

It could be anything really... this isn't a very liquid stock with a lot of different shareholders.  One of the Altius presentations lists major shareholders, many of them with 5-10% of the float.

Sometimes some rich retail guy just decides to buy up a lot of stock.  Look at the story of CMEDQ.
Title: Re: ALS.TO - Altius Minerals
Post by: value-is-what-you-get on January 17, 2013, 10:29:36 AM
Dazel probably decided to load up the truck. Maybe he's getting close to control ownership by now :)

BeerBaron

 . . . or maybe he went out for lunch today!!  ;)
Title: Re: ALS.TO - Altius Minerals
Post by: original mungerville on January 17, 2013, 03:02:37 PM
Thanks for the reply on the royalty valuations Dazel. Seems clear that the Altius royalty is going to be worth for more than the equity stake in Alderon.

Title: Re: ALS.TO - Altius Minerals
Post by: alertmeipp on January 17, 2013, 04:58:06 PM
might have something to do with Rio Tinto?
Title: Re: ALS.TO - Altius Minerals
Post by: hohi on January 17, 2013, 08:20:34 PM
It was a recommendation in a US newsletter. As there where no Alderon news I guess that probably was it - nothing more to it.

Cheers,
hohi
Title: Re: ALS.TO - Altius Minerals
Post by: Mark Jr. on January 17, 2013, 08:24:06 PM
It was a recommendation in a US newsletter. As there where no Alderon news I guess that probably was it - nothing more to it.

Cheers,
hohi

Which newsletter? I'm curious.
Title: Re: ALS.TO - Altius Minerals
Post by: hohi on January 17, 2013, 10:30:33 PM
It was a recommendation in a US newsletter. As there where no Alderon news I guess that probably was it - nothing more to it.

Cheers,
hohi

Which newsletter? I'm curious.

"Small Stock Specialist" of Stansberry & Associates
http://www.stansberryresearch.com/products/Small-Stock-Specialist
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 18, 2013, 02:56:31 AM

Wow..a little coverage from a newsletter gives us a pop above all technical ranges!? Imagine when the coverage universe gets a hold of the Altius story! Newsletter or not technical traders screens will be popping. Sadly, this is Wallstreet...but it is coming at a time when the Hebei financing is about to be announced...so whoever, wrote the newsletter did a hell of a job at a hell of time! If this is the spark that gets investors attention to value at Altius... great...if not..we will buy a boat load more shares back!

Stocks rise for the strangest of reasons...and even the great Ben Graham when asked by Congress could not explain how value was finally realized in a stock price.

"It is one of the great mysteries of our business..."

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: hohi on January 18, 2013, 03:44:32 AM
I actually was sad to see the price go up 10% as one of my goals for 2013 was to add substantially to my already large position in ALS. I'll probably to it anyway but I would have loved to do it at the discounted price levels we had over the last years... I just hope we get some extra time to position ourselves, because once Kami starts developing and people realize who owns the royalty this gem will at least double.

I am actually pretty optimistic that over the next 10 years at least one or two of our other iron ore properties will get developed while we can sit back and just watch it happen passively. Also I see good things happening in Chile over the next decade. Never mind deploying our cash and all the other good things happening.

I must admit that I see ALS as one of the safest bets I've made so far in my investment career. Once Hebei paid the money to Alderon, Altius is a no-brainer. Hebei not paying is like the only serious scenario I see where ALS is not undervalued by at least the factor 2. My current fair value lies at $ 23,55 and that is calculated very conservatively.

Anyways just wanted to share those thoughts with you guys. Keep up the great work!

Cheers,
hohi.
Title: Re: ALS.TO - Altius Minerals
Post by: hohi on January 21, 2013, 10:06:43 PM
Mamba begins drilling the 7th of february. Stock is also showing strength - it's near its all-time-high. Current Mcap of about $15M... once Altius gets its 20% stake that will be worth $3M+. I am pretty confident Mamba will hit some nice Fe intercepts as they are for sure trying to get investors attention to do another financing in a year or so. So they'll probably drill some higher risk holes to hit it big. 6 holes in total in Phase I.

http://www.reuters.com/finance/stocks/MAB.AX/key-developments/article/2677417

Cheers,
hohi.
Title: Re: ALS.TO - Altius Minerals
Post by: HJ on January 22, 2013, 08:00:42 AM
Any commentary on the just filed NI 43-101  Study by Alderon?  I guess that's the reason ALS has been popping.  Do they just all back date the filings on Sedar?  Since none of us saw the filing last week, but it shows up as filing on Jan 15.
Title: Re: ALS.TO - Altius Minerals
Post by: hohi on January 22, 2013, 08:31:12 AM
Any commentary on the just filed NI 43-101  Study by Alderon?  I guess that's the reason ALS has been popping.  Do they just all back date the filings on Sedar?  Since none of us saw the filing last week, but it shows up as filing on Jan 15.

The study shows royalty payments to Altius between $20M - $30M / year. Assumption are long term Fe prices of $102. Total some $700M+ for Altius @ $102 Fe.

Cheers,
hohi.
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on January 22, 2013, 10:25:12 AM
Quote
Do they just all back date the filings on Sedar?
In Canada, you are allowed to issue a press release and then file the actual technical report 45 days later.  I'm not sure why this is allowed but it is.

In the case of Barkerville Gold, they issued a press release about their technical report claiming a very, very large gold deposit (Bre-X sized).  Later, the regulatory authorities found many issues with the technical report and the stock was halted... AFTER the price spiked up on the press release.

It's just the way things are apparently.  Another approach would be for regulators to vet technical reports first.  The technical report would be available on SEDAR concurrent with the press release.  This would avoid investors getting hurt by bogus/problematic technical reports.  Then again... a lot of bogus technical reports are allowed anyways so the overall problem isn't fixed.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on January 22, 2013, 04:10:49 PM
Mamba begins drilling the 7th of february. Stock is also showing strength - it's near its all-time-high. Current Mcap of about $15M... once Altius gets its 20% stake that will be worth $3M+. I am pretty confident Mamba will hit some nice Fe intercepts as they are for sure trying to get investors attention to do another financing in a year or so. So they'll probably drill some higher risk holes to hit it big. 6 holes in total in Phase I.

http://www.reuters.com/finance/stocks/MAB.AX/key-developments/article/2677417

Cheers,
hohi.

Is ALS involved with Mamba?
Title: Re: ALS.TO - Altius Minerals
Post by: jjsto on January 22, 2013, 06:53:32 PM
Is ALS involved with Mamba?

http://altiusminerals.com/projects/snelgrove
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on January 22, 2013, 06:55:07 PM
Yes.

http://altiusminerals.com/projects/snelgrove

It has other iron ore projects in the works.  The Rio Tinto joint venture is more advanced and has decent drill results:
http://altiusminerals.com/projects/labrador-iron-ore
Title: Re: ALS.TO - Altius Minerals
Post by: Green King on January 22, 2013, 07:09:21 PM
can someone attach technical report for some reason i can't download it.

Thx
Title: Re: ALS.TO - Altius Minerals
Post by: Phaceliacapital on January 23, 2013, 06:58:42 AM
I will do it tonight, the report is too large to upload directly to the board.
Title: Re: ALS.TO - Altius Minerals
Post by: Phaceliacapital on January 23, 2013, 01:02:31 PM
Et voila http://phaceliacapital.com/uploads/TechnicalReportAlderon.pdf
Title: Re: ALS.TO - Altius Minerals
Post by: Green King on January 23, 2013, 11:31:34 PM
 :)Thank you
Title: Re: ALS.TO - Altius Minerals
Post by: Green King on January 24, 2013, 06:06:14 PM
Is The 15 days Business days or normal days?
Title: Re: ALS.TO - Altius Minerals
Post by: BRK7 on January 24, 2013, 06:53:30 PM
Is The 15 days Business days or normal days?

15 business days
Title: Re: ALS.TO - Altius Minerals
Post by: original mungerville on January 30, 2013, 02:01:05 PM
So is the 15 business days up today - ie Wednesday? or Thursday 31 January? They announced the feasibility study on Wednesday 9 January...

Or do they start counting the 15 business days from the date they file the feasibility study and not the date of the announcement?
Title: Re: ALS.TO - Altius Minerals
Post by: Green King on January 30, 2013, 02:19:20 PM
I made that mistake too. Read the http://www.alderonironore.com/_resources/Conference_Call_Transcript.pdf.
 :D
Title: Re: ALS.TO - Altius Minerals
Post by: original mungerville on January 30, 2013, 02:31:13 PM
So Hebei investment timing is sometime in the first, second (outside chance of third) week of February based on:


"As stated in our news release, the feasibility study results meet all of the threshold
criteria for Hebei’s project-level investment of $120 million dollars. We will be delivering
the official feasibility study to Hebei in the latter half of this month and expect to close lderon Feasibility Study Results – January 9, 2013  5
the next tranche of their investment sometime in February and this is consistent with the
timeline captured in our agreement. "
Title: Re: ALS.TO - Altius Minerals
Post by: zippy1 on January 30, 2013, 03:10:01 PM
So Hebei investment timing is sometime in the first, second (outside chance of third) week of February based on:


"As stated in our news release, the feasibility study results meet all of the threshold
criteria for Hebei’s project-level investment of $120 million dollars. We will be delivering
the official feasibility study to Hebei in the latter half of this month and expect to close lderon Feasibility Study Results – January 9, 2013  5
the next tranche of their investment sometime in February and this is consistent with the
timeline captured in our agreement. "
15 business days will point to Feb 7th. Chinese will have Feb 9th to 15th off for their New Year holidays.
Title: Re: ALS.TO - Altius Minerals
Post by: no_free_lunch on January 30, 2013, 05:20:58 PM
Quote
Nev Power, chief executive, said he expected the benchmark price to average US$120 a tonne in 2013, down from its current level of US$147.70. But he said the price would be underpinned around US$120 by the pro-growth policies of the Chinese government.
..
UBS expects the spot price to hit US$110 by the end of the year.

http://www.ft.com/cms/s/0/615da72e-65ef-11e2-bb67-00144feab49a.html#ixzz2JQgFcEs8
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 30, 2013, 06:27:17 PM
http://www.reuters.com/article/2013/01/29/vale-brazil-prices-idUSE5E8JA00120130129

http://www.bloomberg.com/news/2013-01-24/morgan-stanley-boosts-2013-iron-ore-estimate-as-demand-climbs.html

http://theconversation.edu.au/a-rebound-in-iron-ore-prices-who-knows-11627


Here are some other forecasts for what they are worth...the third is the most interesting.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on January 31, 2013, 03:43:56 AM
http://www.metalbulletin.com/Article/3149020/Iron-ore-and-coking-coal/Spot-635-Fe-iron-ore-prices-up-3-4-per-tonne-on-positive-sentiment.html


Prices have risen above $150 again....to be clear it is only the steel producers that know what they are willing to pay. We like being in bed with Hebei the largest steel producer in China because we know they are a proxy for the world steel market. They need the iron ore...whether it is $150...$180...or $100... Altius will do very very well.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 01, 2013, 06:00:18 AM
http://www.pimco.com/EN/Insights/Pages/Credit-Supernova.aspx


Altius is the perfect asset that Bill Gross is looking for.


Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: nostradamus on February 01, 2013, 08:09:19 AM
Any views on whether we will get a press release on Julienne lake soon?

http://www.nr.gov.nl.ca/nr/mines/Julienne/Julienne_EOI_Addendum1.pdf

The above states: "invitations to submit detailed proposals combined with terms of reference will be issued in January 2013". If Altius has been asked to submit a detailed proposal it would be interesting information for them to communicate to the market. Especially if they chose to disclose their partners. Is this likely at this stage?
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 02, 2013, 04:26:30 AM


No idea when or how Julienne Lake will play out...it looks like the timing is right for Altius to make a bid as the sector is not loved right now. In fact, it is so unloved even famed "Bear" Marc Faber is calling mining stocks cheap. He is recomending Ukraine, Vietnam, China and Mining stocks. His interviews are always entertaining. He is uncannily right on the markets...I found him years ago as Prem Watsa of Fairfax mentioned him and his commentary.

http://finance.yahoo.com/news/better-enjoy-market-rally-while-125151051.html

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: gurjot on February 06, 2013, 09:26:40 AM
alderon showing some weakness.  may be expectation of  bad news from heibi?

thanks
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on February 06, 2013, 10:36:52 AM
Junior stocks like Alderon tend to be crazy volatile.  A lot of the time the volatility means nothing.  You usually want to buy the dips and sell the rallies.

Take Queenston Mining for example.
http://www.google.com/finance?q=qmi.to&ei=VaESUZnLDse1qgGeYQ

Traded as low as <$3.20, bought out at over $5 in the same year.

2- Altius is easing back on the share repurchases a little now that the share price shot up by about a quarter:
http://www.canadianinsider.com/node/7?menu_tickersearch=als

Title: Re: ALS.TO - Altius Minerals
Post by: gurjot on February 06, 2013, 02:10:10 PM
heibi date extended!
wonder whats the real reason?

Title: Re: ALS.TO - Altius Minerals
Post by: naboo on February 06, 2013, 02:39:55 PM
heibi date extended!
wonder whats the real reason?

I didn't think 15 business days were reasonable, especially close to Chinese New Year. 

The Chinese New Year in this year is Feb 10, but in Chinese tradition, it started one week early (lunar year 12/23,  02/03/2013),  and will end (Lantern Festival, lunar year 01/15  02/24/2013) . Hebei (North of the Yellow River) is a province in North China, and people there celebrate Chinese year in a very traditional way, please don't expect anybody will do the serious work during this period of time. 
Title: Re: ALS.TO - Altius Minerals
Post by: zippy1 on February 06, 2013, 02:59:48 PM
heibi date extended!
wonder whats the real reason?

I didn't think 15 business days were reasonable, especially close to Chinese New Year. 

The Chinese New Year in this year is Feb 10, but in Chinese tradition, it started one week early (lunar year 12/23,  02/03/2013),  and will end (Lantern Festival, lunar year 01/15  02/24/2013) . Hebei (North of the Yellow River) is a province in North China, and people there celebrate Chinese year in a very traditional way, please don't expect anybody will do the serious work during this period of time.
I am long AXX myself. 

However, I feel quite uneasy about this delay.  Chinese New Year holidays are a bit like American Christmas holidays. The official time off this year is Feb 9th-15th.  So it is like American Christmas-New Year in terms of length, roughly.   

Also, it is not like business people do not know which days Chinese New Year(CNY) fall in advance.  So to have this CNY coming up as a reason, in my mind, is a bit strange.  We all plan our milestones here taking into account of CNY.  Someone has to be quite incompetent to not to do so.

AXX/Hebei could have set it at March 15th in the first place if CNY is really the reason.

I guess either AXX do not have good staff that "understands" Hebei or Hebei is using CNY as an excuse to delay payment, which is a known tatics in this part of the world anyway.
Title: Re: ALS.TO - Altius Minerals
Post by: beerbaron on February 06, 2013, 03:57:33 PM
I deal with China every day and altough CNY is stated to to from the 10th to the 15th in China it's usually much longer. For example some contract manufacturer stopped production on feb 1st and are starting back around the 25th. Office workers are starting backon the 18th at the earliest. No real work can be performed. I expect an answer around the 25th. One thing that needs to be understood about CNY is that most people that live in the cities go back to their family in the country, this is their one time a year to see their family and they don't care about their job.

I'm not surprised one bit there is delays, the 15 days was probably negociated at the signing of the first contract. Nobody could know that Alderon would send the results just prior to CNY.

BeerBaron
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 06, 2013, 06:53:19 PM
Agreed.
There is no advantage to rushing things...it does not touch the timeline of the build out and will give great credibility to the process. We are talking about a 30 plus year marriage and Hebei are smart people...They are going to want to see the numbers in the feasibility study and compare to the operational numbers to know how things things have played out and cover their jobs with their own analysis.

We expected this with Chinese new year. It is a much bigger deal than any holiday time we see in North America...

Iron ore prices are holding strong at $157 a ton...the project remains an incredible opportunity for Hebei.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: original mungerville on February 07, 2013, 02:34:32 PM
There is an advantage to Hebei doing what they said they would do by the time they said they would do it which they are not doing. That press release raises a lot of questions.

Feasibility came out 11 January, in the press release, Alderon has said, after discussion with Hebei, that they have agreed with themselves to extend to 15 March. That is either a poorly written press release or something weird is going on.

Chinese New Year is one week of vacation. 11 January to 15 March is 9 weeks. They said they would be it done in 3 weeks after the feasibility was released. Further, the feasibility released 11 January was already delayed from an earlier timeline giving Hebei even more time. You can't spin this positively. I hope their project management isn't this bad.
Title: Re: ALS.TO - Altius Minerals
Post by: zippy1 on February 07, 2013, 03:01:53 PM
There is an advantage to Hebei doing what they said they would do by the time they said they would do it which they are not doing. That press release raises a lot of questions.

Feasibility came out 11 January, in the press release, Alderon has said, after discussion with Hebei, that they have agreed with themselves to extend to 15 March. That is either a poorly written press release or something weird is going on.

Chinese New Year is one week of vacation. 11 January to 15 March is 9 weeks. They said they would be it done in 3 weeks after the feasibility was released. Further, the feasibility released 11 January was already delayed from an earlier timeline giving Hebei even more time. You can't spin this positively. I hope their project management isn't this bad.

I agree. I actually work at a large semiconductor company in this part of the world handling customers locating in North America, Japan and Europe. I have seen people here using CNY as the reason for a few days delay. But this is the first time I see people use it as the reason to push it out by 5 -6 weeks.

More importantly in my mind is what if Hebei wants to change the terms of the contract in timing or amount of money? Can AXX really go sell this thing to a higher or at least different bidder?  If I were to be Hebei, I will try to squeeze AXX if I could get away with it. 
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 07, 2013, 03:04:17 PM

Agreed.
Certainly not putting anything positive on this other than the original contract is a little stupid. Fifteen days really?!

It is not just $120 million...after you spend the first $190 million ( equity investment included) you are going to spend the other $200 million to get your discounted ore and keep your 25 % stake in the  project for over 30 years. So do you think you would have some questions when you are putting in almost half a billion dollars? And all this going on around Chinese New Year...silly...you need more time. Alderon was stupid with their press on this and rumour has it they have fired their PR team over it.
Hebei's normalized market cap is around $50 billion. This is as big as AIG!!!! 15 days...what were they thinking?
Dazel
Title: Re: ALS.TO - Altius Minerals
Post by: ItsAValueTrap on February 07, 2013, 03:20:17 PM
Maybe the 15 days was reasonable.  Presumably, Alderon could have been sharing the results of the feasibility study with Hebei beforehand.  What you really need to do is to double-check Alderon's work and see if their assumptions are correct... this goes far beyond what is printed in the technical report that they file on SEDAR.

I think that the real reason for the delay is that Hebei may be having cold feet.  Everybody else is cutting their expansion plans (e.g. Cliffs) due to the drastic drop in iron ore pricing.  The mining industry tends to exhibit herd behaviour.

If Alderon was overcapitalized and could build the mine themselves, they should kick Hebei to the curb and therefore get rid of the option that they gave/sold to Hebei.  Instead, they are effectively extending Hebei's option to invest in Alderon... it's sort of like giving away free money.  If Hebei doesn't invest in Alderon, it's a vote of no confidence and might make it very difficult for Alderon to raise capital.
Dalton and Baker are on Alderon's board... I am sure they know what's going on.  Altius is sitting on a lot of cash and has slowed down its repurchases and hasn't been buying Alderon stock.

2- In general, juniors will often extend options/warrants (and effectively give away free money to the options/warrant holders) because they badly need financing.  Extending options/warrants has less fees than an underwriting or a rights offering.  (Even a rights offering can be very expensive if you need somebody to backstop the warrants; on top of that, the brokers don't like it when you do a rights offering and won't pump your stock.)

3- To some degree, you need to be greedy when others are fearful.  You want to buy when share prices are really low and fears are overblown.  (Too bad Altius ran up and isn't as good a buy as it was before.)
Title: Re: ALS.TO - Altius Minerals
Post by: original mungerville on February 08, 2013, 12:17:24 AM
I would not hold Alderon stock. This is just one example of my earlier point (several comments ago) that the main value Altius holds is the royalty not the investment in Alderon stock. The latter will suffer dilution, etc as financing is raised whereas the former will not. Then the former will attract a higher P/E.

Anyway.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 08, 2013, 01:05:00 AM

Mungerville,


While we see big value in Alderon at these prices...we agree that Altius business model is exceptional...we do not see a better business on the planet than a royalty company especially in this environment (inflation protected). The problem... like any great company is that once the royalties are established the companies trade at such a huge premium we are unable to pay up for them.
Altius will be priced like this we agree with you....

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: no_free_lunch on February 08, 2013, 05:49:52 PM
Quote
Canadian National Railway Co has halted a study into the feasibility of building a C$5 billion ($4.99 billion) rail line to ship iron ore from northern Quebec to port, the railroad said on Friday, as miners delay projects due to low prices.

..
Iron ore prices plunged to $86.70 a tonne in September from above $180 a tonne in September 2011. Prices have since recovered to about $155 a tonne.

http://www.reuters.com/article/2013/02/08/cnrail-ironore-idUSL1N0B8FQS20130208

Price of iron ore is going to be volatile but if volatility causes investment in capacity to drop this can lead to a supply shortage.   Not that we are anywhere near one at this point but it is that line of thinking that can help to support pricing in the long-term.

Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on February 12, 2013, 01:19:52 PM
Alderon up almost 18% right now.

There's this news: http://www.alderonironore.com/_resources/news/ADVNR20130212.pdf
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 14, 2013, 05:22:16 AM
http://finance.yahoo.com/news/alderons-environmental-assessment-kami-property-113000964.html


Good timing....

Hebei will contribute the $350 million needed...$120 million by march 15th...for the build out of Kami...because the timeline is on schedule and they know if they don't someone else will. Fortes cue and all the majors stock prices are recovering...and they are printing cash. Everyone is looking for a deal and right now Alderon and Kami are up for grabs at these prices.

Fortes cue has an enterprise value of $27 billion right now! Andrew Forest made a large bet buying up more shares at the bottom in September which continues to pay off...those operators that know what they are doing will be fishing in this market we expect to see a lot of action in iron ore this year!

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: biaggio on February 14, 2013, 05:54:23 AM
I agree with your thinking. I am biased as I am betting that you re right.

But Hebei could change there mind if they don t think there is enough value there for them i.e.  environmental assessment was needed, but ultimately they could back out if they don t think its a good deal or if they think they can get a better deal
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 14, 2013, 07:06:25 AM

Biaggio,

Hebei rightly is checking things out at Kami....remember if Alderon gets bought out Hebei still owns 25% of Kami....as Wisco does at Bloom Lake. Hebei is making plans for a major iron ore source for 30 plus years...most of the value is in the resource and it's location as we know...execution is next..when this financing is done...it is full speed ahead...this is your best opportunity to gather information on the resource and it's composition and where Hebei will have their iron ore shipped etc...once this is done they are in....Alderon regains it's strong position and they together start this same process as a team...negotiating on outside financing, equipment, labour etc.

We will like Hebei a whole lot better when they confirm they are our partner nice to have a giant multinational when they are on your side!

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: jch548 on February 14, 2013, 09:31:17 AM
Has anyone seen Cliff's Bloom lake cash costs of $116 per ton last qtr? What are the relative dynamics between Bloom Lake and Alderon's Kami? Both are located in the same area. Shouldn't cash costs be a worry? Why would Alderon's be lower. Thanks.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 14, 2013, 09:56:26 AM


Jcb584,


I would suggest you scroll back through the thread to get some answers...Alderon addresses this directly in it's feasibility study conference call transcript...Alderon's management team is from IOC other than the chief geologist who was at Bloom Lake and is responsible for IOC's succesful expansion...they are not copying Bloom Lake the are copying Carol Lake.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Dazel on February 18, 2013, 05:34:37 AM
http://www.metalbulletin.com/Article/3156656/Iron-ore-and-coking-coal/Spot-635-Fe-iron-ore-prices-hit-160-per-tonne-cfr.html


Price update for iron ore.

Dazel.
Title: Re: ALS.TO - Altius Minerals
Post by: Liberty on February 22, 2013, 09:58:26 AM
food for thought from a VIC writeup:

http://www.valueinvestorsclub.com/value2/Idea/ViewIdea/87387

Quote
Iron Ore/Steel
It is instructive to look at the solar industry over the last two years for what is about to play out in the steel industry. In both cases, there is an industry where demand was being artificially boosted by government stimulus that has faded away, but not before the industry and supply chain totally mistook this non-normal boost of demand as an indication of an ongoing growth trend. The industry built out supply for growth rates off unsustainable demand levels creating a mistaken ramp up of supply with a long lead time. Compounding the problem as the dynamic starts to shift, will be unprofitable bad actors in China that exacerbate the issue and make it more difficult for the market to find a natural bottom. The core of the problem is that if China needed 100 million tons of steel and a mill produced 5 Mtpa, they would build 20 mills, forgetting that there was a year 2 (let alone year 10) of production. This pretty well sums up China in a whole but steel is perhaps the core of this problem.

The dirty secret on iron ore is that it is not a commodity that is becoming rarer or even much more expensive and harder to extract; the world is still awash in iron ore. It is just particularly capital intensive with long lead times to build out mines given the scale and infrastructure needed. 2013 is the turning point when the time to market and capital barriers end and a deluge of supply starts floodi