Author Topic: ALS.TO - Altius Minerals  (Read 1744049 times)

beerbaron

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Re: ALS.TO - Altius Minerals
« Reply #1080 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


Dazel

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Re: ALS.TO - Altius Minerals
« Reply #1081 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.

original mungerville

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Re: ALS.TO - Altius Minerals
« Reply #1082 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.

zippy1

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Re: ALS.TO - Altius Minerals
« Reply #1083 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. 

Dazel

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Re: ALS.TO - Altius Minerals
« Reply #1084 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

ItsAValueTrap

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Re: ALS.TO - Altius Minerals
« Reply #1085 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.)
« Last Edit: February 07, 2013, 03:22:20 PM by ItsAValueTrap »
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original mungerville

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Re: ALS.TO - Altius Minerals
« Reply #1086 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.

Dazel

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Re: ALS.TO - Altius Minerals
« Reply #1087 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.

no_free_lunch

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Re: ALS.TO - Altius Minerals
« Reply #1088 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.


Liberty

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Re: ALS.TO - Altius Minerals
« Reply #1089 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
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