Author Topic: ALS.TO - Altius Minerals  (Read 2064241 times)

biaggio

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Re: ALS.TO - Altius Minerals
« Reply #610 on: April 15, 2012, 03:28:50 PM »
Agree with Shalab + Dazel

Putting  #'s that Ross812 provided + corrected current asset value I get:


Current assets are 176 million 31 Jan 12. Of that 50.6 million is cash and taxes receivable.

Voisey BAy Royalty, NPV of 36.3m.

Alderon shares + Royalty NPV (8mt at $100, 0% G, 11% D)
112 + 218 = $330m


Millrock- 2.3m

Labrador Iron Props- 30m

Cranberry at 50% - 25m

Total - ~$599m + free options galore

29.8 million shares= ~$20 per share

~40% margin of safety at today's price

Seems like a good story + find by Dazel, have been adding in + now one of my biggest holdings. Thanks to all. (This proclamation should give us another buying opportunity in the near term)


Ross812

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Re: ALS.TO - Altius Minerals
« Reply #611 on: April 16, 2012, 06:10:13 AM »
Thanks everyone,

The cash position was confusing. Altius seems to be a pretty simple company, but it has a lot of moving parts.

Assuming the 124.4 million is government paper, this is trading for its liquidation cost at a minimum.

Current Assets @ 95%- 167m
Voisey Royalty @ 75%-  27m
Alderon Shares @ 60%-  67m
Alderon Royalty @ 20%-  44m
Labrador Props @ 60%- 18m
Cranberry @ 50%- 12.5m
Millrock @ 60%- 1.4m

total- 337m

There is a lot of guessing in there, but 337m seems like a conservative floor. The best part is this is not a cigar butt company and should be trading at a 600m market cap. At 600m there are still all kinds of free call options that could make Altius even more valuable. Being able to buy this near its liquidation value is remarkable.

Thanks Dazel


96% Fixed Income CDs, Muni, Corporate Debt - 4% SPX Options

Dazel

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Re: ALS.TO - Altius Minerals
« Reply #612 on: April 16, 2012, 08:03:03 AM »

What is missing? The value of the Alderon position...now that they have secured financing and things look like they are headed to production...here is what we see.

Look at a Labrador iron ore royalty for an almost exact model for Altius ownership positon in Alderon. Labrador iron ore royalty to us shows us looks like what a mature Altius would look like (on this one asset-Alderon).

So forget the rest Altius for now...this is a spin out scenario.

Labrador iron ore owns 15.1% of the iron ore company of Canada...they have been diluted like Altius will be for a smaller piece of a bigger market cap.Rio Tinto owns 58.72%, mitsubshi 26.18%.

Altius will get diluted as the project gets built out...so we use 15% ownership the same as Labrador iron ore and a 3% royalty compared to 7% at Labrador royalty.

Altius Royalty Corp (hypothetical spin out)

Royalty income
$28m (net of 20% Newfoundland royalty tax)
-8mtX$145t= 1.16b @ 3%=$35m @20% tax royalty tax= $28m

Equity income
Alderon- PEA numbers
8mtX$145-$45 (total operating costs)= $800m profit

We will use $500m.

Altius royalty Corp. Income $75m @22.5m tax (30%)
$52.5m

Total income to Altius
$82.5m

Labrador iron ore trades at 10 times income

Altius royalty Corp at this valuation
$825m

When Alderon reaches 16mt production you can double your numbers....
$1.65 billion market cap.

You can discount how you like as you see we have done with the income from Alderon....reducing it to $500m....from the $800m @30% tax=$660m

NO ONE is running the numbers on how huge Alderon is for Altius. We welcome negative scenario's including a drop in the price of Iron ore...please someone run some numbers...

Disclosure
We own a lot Altius shares.

Dazel.


Liberty

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Re: ALS.TO - Altius Minerals
« Reply #613 on: April 16, 2012, 10:47:13 AM »

Dazel

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Re: ALS.TO - Altius Minerals
« Reply #614 on: April 18, 2012, 09:29:21 PM »

For the china watchers...government letting the market know they are  loosening monetary policy.

http://www.bloomberg.com/news/2012-04-19/china-s-central-bank-to-ensure-liquidity-xinhua-says.html

Dazel

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Re: ALS.TO - Altius Minerals
« Reply #615 on: April 24, 2012, 07:01:51 PM »
http://www.businessweek.com/news/2012-04-24/coal-seen-rebounding-as-china-sets-steel-output-record


No one talks much about India but they have big plans for steel as you can see from the article.

Dazel.

beerbaron

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Re: ALS.TO - Altius Minerals
« Reply #616 on: April 24, 2012, 07:55:38 PM »
http://www.businessweek.com/news/2012-04-24/coal-seen-rebounding-as-china-sets-steel-output-record


No one talks much about India but they have big plans for steel as you can see from the article.

Dazel.

You sure are a preacher for this idea Dazel :)

Liberty

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prunes

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Re: ALS.TO - Altius Minerals
« Reply #618 on: April 29, 2012, 08:29:58 AM »
Random thoughts:

Alderon trades at a 90% discount to the NPV of its primary site. Anyone know of any comps for other junior miners at this stage in the development process? Is this fair? The market seems to be giving Alderon a 10% chance of hitting this plan.

I liked the slide in the Alderon investor deck showing Beijing / Shanghai steel consumption per capita compared to the interior cities.

Alderon still needs to find a large slug of capital to fund development. The Hebei deal is promising. Eventually Alderon will need to sell equity to one of the majors. At this point would we expect ALS to sell some of its equity to the major as well?

Agreed that the real value for ALS is in getting Alderon producing. The royalty will be very valuable and isn't being recognized by the market at all. What is Alderon's plan if China melts down before production starts?

Seems like there's a lot of key man risk at ALS. What's been the key to ALS's success at exploration and execution? Dalton is young and owns a decent chunk of the company so he's not likely to go anywhere. The other major key man risk would be with the geological staff I think? Part of the reason why the company has done so well is because ALS practices geographical specialization. How long before ALS needs to expand outside Newfoundland and Labrador? How can we evaluate how much the company's previous successes have been due to luck? How can we evaluate the odds that the company can repeat its successes in the future?

Seems like Alderon is the biggest catalyst for ALS but that value from this catalyst probably won't be recognized until 2015 at the earliest. Correct or incorrect?

Liberty

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Re: ALS.TO - Altius Minerals
« Reply #619 on: May 01, 2012, 07:59:01 AM »
http://www.marketwatch.com/story/alderon-receives-initial-results-from-final-drill-program-before-feasibility-study-2012-05-01-831150?reflink=MW_news_stmp

Quote
Alderon Iron Ore Corp. CA:ADV +2.46%  AXX +1.58%  ("Alderon" or the "Company") is pleased to announce the first set of assay results from the ongoing drill program on its Kamistiatusset ("Kami") Iron Ore Project in western Labrador. The majority of these results are from the North Rose area and are all within the currently defined mineral resource estimate. The program, which began in mid-January, has concentrated on infill drilling with the goal of upgrading the current mineral resource into the measured and indicated categories in preparation for the Feasibility Study expected in Q3 2012. Highlights include:



       
       
Code: [Select]
-----------------------------------------------------------------------
        -----
                                  From             To       Interval
        Drill Hole             (metres)       (metres)       (metres)   Total Iron %
        ----------------------------------------------------------------------------
        K-12-176A                242.0          305.0           63.0            27.1
        ----------------------------------------------------------------------------
          and                    338.0          593.2          255.2            30.1
        ----------------------------------------------------------------------------
        K-12-179                 281.0          398.3          117.3            28.0
        ----------------------------------------------------------------------------
          and                    398.4          527.8          129.4            32.6
        ----------------------------------------------------------------------------
        K-12-182                  85.5          111.0           25.5            31.2
        ----------------------------------------------------------------------------
          and                    177.0          430.4          253.4            29.3
        ----------------------------------------------------------------------------
        K-12-184                  59.0           98.0           39.0            29.3
        ----------------------------------------------------------------------------
          and                    182.0          452.0          270.0            31.1
        ----------------------------------------------------------------------------
        K-12-188                  66.0          101.6           35.6            31.7
        ----------------------------------------------------------------------------
          and                    126.0          237.0          111.0            32.3
        ----------------------------------------------------------------------------