Author Topic: ALS.TO - Altius Minerals  (Read 2069674 times)

Dazel

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Re: ALS.TO - Altius Minerals
« Reply #840 on: October 14, 2012, 03:58:16 PM »


Once again...

The bulk of the valuation on royal gold is Voisey's bay it's largest royalty...at a 50 plus PE....even though it is a gold co...

As we all know Altius owns the same royalty and when uranium comes out of it's free fall....you have another world class asset at Paladin's Michelin project.

The world is looking for yield...they do not care how they get it.

Dazel.


nostradamus

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Re: ALS.TO - Altius Minerals
« Reply #841 on: October 16, 2012, 04:37:11 AM »
http://member.afraccess.com/media?id=CMN://6A608326&filename=20121016/PDN_01343711.pdf

Includes some further information on the Michelin project (pasted below):

AURORA Ė MICHELIN URANIUM PROJECT, Canada

Drilling started at Michelin in late August. Two diamond core rigs are now operating on site and have completed 19 diamond holes incorporating 3,200m of core.

Initial infill drilling at Michelin intersected uranium mineralisation as expected. Detailed widths and grades will be reported after assays have been received and downhole gramma logs validated.

Ground geophysical surveys, geological mapping and prospecting were undertaken along the Michelin trend east and west of the main mineralised zone as well as the sub-parallel Rainbow trend, to the south and west all within 5km of the Michelin deposit. Early results show numerous uranium anomalies along this trend offering targets for future scout drilling. At this stage four scout drill holes have been completed at Running Rabbit Lake. All holes intersected some uranium mineralisation. Detailed results are still outstanding.

An updated mineral resource estimate for the Michelin deposit is expected early in 2013 after all assays have
been received and validated.

Dazel

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Re: ALS.TO - Altius Minerals
« Reply #842 on: October 24, 2012, 08:14:08 AM »



Iron ore prices are quietly back to the perceived global price floor of $120 per ton....you would not know that from the news headlines as the negativity in the space of the past 3 months has been overwhelming.

FYI

Altius' corporate presentation and assumptions for $27.5m and $55m royalty for 8mt and 16mt at Kami contemplate iron ore prices of $115 per ton.

Dazel.

ItsAValueTrap

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Re: ALS.TO - Altius Minerals
« Reply #843 on: October 24, 2012, 11:21:30 PM »
Hey does anybody know how smelter deductions are normally calculated? / How to get up to date pricing information?
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nostradamus

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Re: ALS.TO - Altius Minerals
« Reply #844 on: October 26, 2012, 01:57:24 AM »
Does anyone have any views on what the 3rd Quarter results for Cliffs means for the viability of Kami?

I am particularly thinking of the cost per ton of nearby mining operations:

Cash cost per ton in Eastern Canadian Iron Ore was $106.06, up 21% from $87.37 in the year-ago quarter. The increase reflected higher cash costs at Wabush Mine of $132 per ton, up 25% from the prior year's comparable quarter, due to higher labor costs and increased spending related to maintenance and repairs. Additionally, third-quarter 2012 cash costs at Bloom Lake Mine were $88 per ton, up 18% from the year-ago quarter, primarily driven by higher fuel, contract labor, and maintenance and supply costs. Cliffs indicated Bloom Lake Mine's cash costs per ton have improved over second-quarter 2012 results primarily due to increased production throughput rates at the mine.

http://ir.cliffsnaturalresources.com/releasedetail.cfm?ReleaseID=716089


ItsAValueTrap

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Re: ALS.TO - Altius Minerals
« Reply #845 on: October 26, 2012, 05:01:02 AM »
Bloom Lake's opex was $88 per ton for the quarter.

The Wabush mine has ore that is very high in manganese content.  I'm not sure but I think that Cliffs may be mixing the cleaner ore from BL with the Wabush ore to have a product that is reasonable in manganese levels.  So maybe you could just assume that Kami's ore will sell at a similar price to Cliffs' Eastern Iron ore operations...?  *BUT* that price is for 1/3 of the product being pellets, which has a higher price than fines.  With Cliffs, the operations produce a lot of (super) fines that are turned into pellets.  Kami may get a lower price without a pellet plant.

Revenue for the quarter was $110 per ton

Royalties and offtake will be at least $7 (it's 6% at 8MT/yr, slightly higher if it turns out to be like BL and production turns out to be 7MT/yr)

----
Capital cost of $989M, mine life 15.3 years. 
http://www.alderonironore.com/projects/kami/

simple D&A calculation
$1000M / 15 years / 8MTperYear = $8.33/ton D&A
-production might end up at 7MT
-cost inflation may push capex higher (actually you could probably read consolidated thompson's financials and cliffs' financials and figure out the real capex)
-mine life may be longer than 15 years

So at current prices:
$110 revenue
$88 opex
$6.6 royalty+offtake
$8.33 D&A

You have a profit of about $7.07 / ton on revenue of $117.  At 6% profit margin, I don't think this will go into production...?

Of course I am probably off by a lot... this is just a rough back of the envelope calculation.  Alderon will spend at least several million dollars on feasibility studies.  A real mining company would do due diligence that retail and institutional investors aren't doing if they wanted to buy this.
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Ross812

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Re: ALS.TO - Altius Minerals
« Reply #846 on: October 26, 2012, 07:42:14 AM »
Regarding Manganese content from Alderon Iron Ore Corp. NI 43-101 Technical Report:

The chemical analysis for the Kami concentrate, previously presented in Table 13.11, offers
mostly positive characteristics having a low concentration of the most typical gangue elements.
Silica levels are in line with those for concentrates from Mount Wright (4.5%) and Carol Lake
(4.2%). The sulfur level of 0.053% is indicated to be marginally higher than the acceptable limit
in Europe which is 0.050%. The Mn level is elevated and exceeds acceptable levels in many BF
operations. The expected MnO and S levels of the Alderon concentrate will make this product
difficult to market in Europe.

Stantec's Conclusions:

19.8 Conclusions
Considering that:
 The Kami concentrate may contain a higher proportion of fines than what is normally used
as a sinter feed;
 The Kami concentrate can be considered as a standard quality concentrate, with normal
silica levels, high-end sulfur levels and higher than standard manganese content;
 The Chinese market is the largest consumer of sinter feed material and the fastest growing
in demand;
 The Chinese market has the least quality restrictions.
It can be concluded, at this stage of the Project, and based on the information available to date,
that the most appropriate marketing strategy for Alderon is to actively explore and pursue
commercial opportunities with potential Chinese Customers.
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Ross812

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Re: ALS.TO - Altius Minerals
« Reply #847 on: October 26, 2012, 08:39:15 AM »
Table 21.2: Total Estimated Average Operating Cost ($/t concentrate)

Mining                                              20.36 $
Concentrator                                     6.28 $
Site Infrastructure (incl. Garage)          0.55 $
General Administration                       1.77 $
Environmental and Tailings Management 0.32 $
Rail Transportation                            13.51 $
Port Facilities                                    2.08 $
TOTAL                                             44.87 $

The accuracy range for the Capital Cost Estimate and the Operating Cost Estimate developed in this
Study is -20%/+30%.

So lets assume +30% = $58.33/ton OPEX + Royalties 6% of $120/ton = $65.53/ton

Bloom Lake's opex was $88 per ton for the quarter.

The Wabush mine has ore that is very high in manganese content.  I'm not sure but I think that Cliffs may be mixing the cleaner ore from BL with the Wabush ore to have a product that is reasonable in manganese levels.  So maybe you could just assume that Kami's ore will sell at a similar price to Cliffs' Eastern Iron ore operations...?  *BUT* that price is for 1/3 of the product being pellets, which has a higher price than fines.  With Cliffs, the operations produce a lot of (super) fines that are turned into pellets.  Kami may get a lower price without a pellet plant.

Revenue for the quarter was $110 per ton

Royalties and offtake will be at least $7 (it's 6% at 8MT/yr, slightly higher if it turns out to be like BL and production turns out to be 7MT/yr)

The Washburn Mine produces Hematite which is much harder (i.e. more expensive) to concentrate than Alderon's ore which is 70% magnetite.

This may help:
http://www.mineralresource.info/2012/08/24/iron-ore-looking-beyond-grade/
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Ross812

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Re: ALS.TO - Altius Minerals
« Reply #848 on: October 26, 2012, 08:58:30 AM »
Kami ore is also 65.5% Fe which means it would be priced at a premium to the 62% Platt price. This is about +$5-5.50/%. Which means Kami ore could fetch a price at Platt + $17.5. Hebei was smart when they locked in a price at 95% Platt. Manganese levels do not particularly matter when selling to China. Sulfur levels are just outside the range of what is acceptable in Europe (6% too high), but they are not selling to Europe anyway. Prices for ore are negotiated directly; Hebei gets preferential treatment at 95% Platt. I donít think other companies are going to get this sweet heart deal. I would look for Platt + $5-17 for everyone else. 
« Last Edit: October 26, 2012, 09:26:35 AM by Ross812 »
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ItsAValueTrap

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Re: ALS.TO - Altius Minerals
« Reply #849 on: October 26, 2012, 12:02:36 PM »
The same technical report calls for quality deductions of $15/ton.  Unfortunately, it seems like nobody on this forum knows how smelter/quality deductions are calculated.

2- The big issue is that these technical reports are a joke.  BBA did technical report work for Consolidated Thompson when it owned Bloom Lake and before Cliffs bought out CT.  The BBA technical report wasn't even close... it projected opex below $40/ton.  This quarter it is around $88/ton.  (How cash costs and operating costs are defined can make a difference... but does not explain the entire difference.)

Guess who is doing technical report work for Alderon?  BBA.

*I also own Altius.
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