Author Topic: ALS.TO - Altius Minerals  (Read 1745566 times)

jjsto

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Re: ALS.TO - Altius Minerals
« Reply #600 on: April 13, 2012, 04:35:16 AM »


value-is-what-you-get

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Re: ALS.TO - Altius Minerals
« Reply #601 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.

Liberty

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Re: ALS.TO - Altius Minerals
« Reply #602 on: April 13, 2012, 07:06:56 AM »
Haven't read all the details yet, but seems like a very good deal.
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naboo

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Re: ALS.TO - Altius Minerals
« Reply #603 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
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Dazel

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Re: ALS.TO - Altius Minerals
« Reply #604 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.

Ross812

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Re: ALS.TO - Altius Minerals
« Reply #605 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...
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Dazel

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Re: ALS.TO - Altius Minerals
« Reply #606 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.



JAllen

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Re: ALS.TO - Altius Minerals
« Reply #607 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.

FFHWatcher

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Re: ALS.TO - Altius Minerals
« Reply #608 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?



Ross812

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Re: ALS.TO - Altius Minerals
« Reply #609 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)
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