Author Topic: ALS.TO - Altius Minerals  (Read 1884154 times)

Dazel

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Re: ALS.TO - Altius Minerals
« Reply #270 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.


jjsto

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Re: ALS.TO - Altius Minerals
« Reply #271 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?

value-is-what-you-get

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Re: ALS.TO - Altius Minerals
« Reply #272 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.

Dazel

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Re: ALS.TO - Altius Minerals
« Reply #273 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.


Liberty

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Re: ALS.TO - Altius Minerals
« Reply #274 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 :)
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jjsto

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Re: ALS.TO - Altius Minerals
« Reply #275 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. 

Dazel

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Re: ALS.TO - Altius Minerals
« Reply #276 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.

Dazel

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Re: ALS.TO - Altius Minerals
« Reply #277 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

cwericb

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Re: ALS.TO - Altius Minerals
« Reply #278 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/
« Last Edit: August 03, 2011, 05:47:43 AM by cwericb »
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Dazel

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Re: ALS.TO - Altius Minerals
« Reply #279 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.