ALS.TO - Altius Minerals

[Dazel]

Shaleb,

You are correct Altius is on the right path at $150....it makes them very very valuable with their iron ore holdings....but capital flows are also important over the next two years as their properties become closer to production...
For example the PEA for Alderon is at $118 iron ore price....The $150 we are at now makes Alderon a huge economic success and altius' royalty payout high...there will be a lot of companies-investors chasing those economics with capital if it is available because there is virtually no yield out there...if a company were to leverage the Alderon project at these interest rates they would make a killing if the economics held...this is why Alderon is saying they could do off take agreements now but they want to wait so there is a bidding war.
If we get a loosening of capital and the iron ore remains here Altius will hit a perfect storm...right place right time.

Dazel

[value-is-what-you-get]

For example the PEA for Alderon is at $118 iron ore price....Dazel

I read $115 in the PEA (page 1-15).  To be clear though, this is not some sort of hurdle price under which things are not feasible, it is a number taken from long term iron ore price averages and at that level generates a 40.2% IRR with a 2.7 year payback of initial investment!  So at $115 it's a home run.  At an ongoing extraction cost before royalty of $44.87 (call it $50) any iron ore price above that is available for payback of initial capital.  Now I don't think it's realistic to say anything above $50 is a winner because it's far less attractive with longer payback of course, but it's also very do-able with iron ore prices BELOW long-term averages, especially in our current low-cost capital environment.

Of course with prices around $150 it's a no-brainer.

"Altius will hit a perfect storm . . . right place right time"  . . . again!

[Liberty]

http://www.alderonironore.com/_resources/news/2012-03-21-NewsRelease.pdf

[alertmeipp]

very interesting company.. but any near term catalysts?

[BRK7]

M&A activity in Labrador: Ridgemont to Acquire IronOne Inc.

http://tmx.quotemedia.com/article.php?newsid=49581494&qm_symbol=RDG

Mark Morabito is Executive Chairman of Ridgemont and also Executive Chairman of Alderon Iron Ore

[Dazel]

Re: ALS.TO - Altius Minerals
« Reply #563 on: Today at 07:14:02 AM »
Quote
very interesting company.. but any near term catalysts?


The feasibility study for Alderon will show incredibly good economics...remember the PEA was only for half the resource....the NPV will be in the range of $6 billion...this will be out in the next 3 or 4 months we think....with that comes the bids for he offtake iron ore and bidding likely on Alderon it's self if it does not become more valuable in the market...

More importantly when investors start taking Alderon seriously it will lead them to altius..the Alderon royalty is massive, and other iron ore properties...and then of course their other assets....we think they will do something very intelligent with their cash as well...these guys are not known...they will be.

Dazel

[alertmeipp]

Don't you think they are sitting on too much cash? Do they need the cash for some sort of cap exp? or they are waiting for deals?

[Liberty]

Don't you think they are sitting on too much cash? Do they need the cash for some sort of cap exp? or they are waiting for deals?

They spend very little and that's pretty much covered by their Voisey's Bay royalty anyway. They are sitting on the cash waiting for opportunities to deploy it when conditions are right, as they've done in the past. Note that the cash is self-generated and not raised from the equity market or debt..

[alertmeipp]

did they deploy any during last Oct - Dec?

I don't think they did, I see some buybacks but very light, probably constrained by the volume.

[Liberty]

did they deploy any during last Oct - Dec?

I don't think they did, I see some buybacks but very light, probably constrained by the volume.

Buybacks are indeed limited by volume.

I think they probably did deploy some cash during the last period of volatility (probably some via the partnership with Paul Van Eeden), but I have no idea where yet. They haven't disclosed anything so far, but they were pretty gung ho about it:

http://www.mineweb.com/mineweb/view/mineweb/en/page66?oid=133091&sn=Detail