Author Topic: ALS.TO - Altius Minerals  (Read 1904634 times)

Dazel

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Re: ALS.TO - Altius Minerals
« Reply #50 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


Dazel

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Re: ALS.TO - Altius Minerals
« Reply #51 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.

Mungerville

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Re: ALS.TO - Altius Minerals
« Reply #52 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.

RolfGunderson

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Re: ALS.TO - Altius Minerals
« Reply #53 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.

biaggio

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Re: ALS.TO - Altius Minerals
« Reply #54 on: February 12, 2011, 03:35:51 PM »
Nice job Rolf!

Dazel

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Re: ALS.TO - Altius Minerals
« Reply #55 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.

RolfGunderson

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Re: ALS.TO - Altius Minerals
« Reply #56 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

Dazel

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Re: ALS.TO - Altius Minerals
« Reply #57 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.

Dazel

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Re: ALS.TO - Altius Minerals
« Reply #58 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.


Dazel

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Re: ALS.TO - Altius Minerals
« Reply #59 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.