Author Topic: ALS.TO - Altius Minerals  (Read 1744045 times)

Liberty

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Re: ALS.TO - Altius Minerals
« Reply #470 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
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value-is-what-you-get

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Re: ALS.TO - Altius Minerals
« Reply #471 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)

Liberty

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Re: ALS.TO - Altius Minerals
« Reply #472 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
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Eric50

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Re: ALS.TO - Altius Minerals
« Reply #473 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    


Liberty

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Re: ALS.TO - Altius Minerals
« Reply #474 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.
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value-is-what-you-get

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Re: ALS.TO - Altius Minerals
« Reply #475 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.

Dazel

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Re: ALS.TO - Altius Minerals
« Reply #476 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.

Dazel

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Re: ALS.TO - Altius Minerals
« Reply #477 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.

HJ

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Re: ALS.TO - Altius Minerals
« Reply #478 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?

Dazel

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Re: ALS.TO - Altius Minerals
« Reply #479 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