Author Topic: ALS.TO - Altius Minerals  (Read 1901513 times)

Dazel

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Re: ALS.TO - Altius Minerals
« Reply #860 on: October 29, 2012, 04:04:11 PM »

sorry Wabush mine cash cost were $132 last quarter....

BloomLake was $88/ton ....last year this quarter it was about $70/ton at Bloom lake...

I have not looked but it is possible that Bloom lake changed strategy to mine higher premium
ore at Bloom lake to blend with the lower quality ore at Wabush.

As I stated earlier the spike in cash cost at Bloom Lake is over how they have implemented their new strategy and
their cash cost will come down now...

Dazel.


ItsAValueTrap

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Re: ALS.TO - Altius Minerals
« Reply #861 on: October 29, 2012, 05:02:19 PM »
Quote
Can you explain again how the high manganese matter ?
I'm not sure why but apparently it was a big deal for Wabush.  (As Dazel points out, Wabush's manganese content is far higher than Alderon.)

I suppose that non-Chinese smelters are not interested in making steel with high levels of manganese.

Quote
If you can just blend or build one of those plants for 40 million ?

To get rid of the manganese, I believe this is what they do.

You grind up the ore really fine.  Hopefully you don't have too many grains where manganese is stuck to something magnetic (e.g. magnetite/iron, hematite/iron)... it depends on the nature of the ore.  If you grind the ore finer, you will probably have less of those grains.  But it depends on the nature of the ore.

You use magnets to separate out magnetic material from non-magnetic material.  There are two different processes that can be used... high-intensity magnetic separation and low-intensity magnetic separation.
http://en.wikipedia.org/wiki/High_intensity_magnetic_separator

Grinding the ore:
- Depends on how hard the ore is.
- Grinding the ore finer costs more money
- Grinding the ore generates fines.  These receive a lower price since they cause problems in the furnace when iron ore is smelted.  Fines receive a lower price than lumps which receive a lower price than pellets.  You need a pelletization plant to turn fines/lumps into pellets.

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sorry i am very new to the sector. It was very hard to keep up. :(
I am too.

You know what... I'm starting to feel that this is really hard.  There is a lot of esoteric knowledge involved and this information is not on Google.  I still don't know how to figure out the smelter deductions/quality deductions.  I've read some university textbooks on mine engineering but they don't cover that aspect of project economics.
Mining companies have teams of specialized engineers who all do different things.  Doing due diligence on juniors is freakishly hard when you don't have access to all the technical data and lack knowledge about several *different* fields of engineering.
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ItsAValueTrap

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Re: ALS.TO - Altius Minerals
« Reply #862 on: October 29, 2012, 05:17:15 PM »
As I stated earlier the spike in cash cost at Bloom Lake is over how they have implemented their new strategy and
their cash cost will come down now...

Dazel.

Hmm there may be a disconnect between what Cliffs says it will do and what it actually does:

Quote
For the full year 2012, Cliffs said it anticipates Bloom Lake iron ore concentrate sales and production volume to be approximately 8 million tons, with a revenue rate of approximately $170 - $175 per ton, based on current iron ore spot prices. With the additional volume expected and resulting fixed cost leverage, Bloom Lake's 2012 cash costs per ton are anticipated to decline to $45 - $50.

In addition, Cliffs anticipates 2012 capital expenditures related to Bloom Lake to be approximately $350 million, including sustainable and expansion capital.
http://ir.cliffsnaturalresources.com/releasedetail.cfm?ReleaseID=582597

2012 is almost over and it looks like Cliffs will definitely miss their target.  Part of it is cost inflation that every miner is experiencing (this trend will likely continue as the shortages of labour and equipment are likely to continue).  The rest is "optimism".

Of course Cliffs' press release coincided with Cliffs selling its shares.
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Ross812

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Re: ALS.TO - Altius Minerals
« Reply #863 on: October 29, 2012, 08:14:19 PM »
It seems that the ideal level of manganese is different for different types of steel?  For steel that will be welded, manganese should be lower than 0.8%.  There are other types of steel where more manganese is better.... most of the world's manganese mined is used as a additive for steel.

2- The Platts index specifies sulphur below 0.02% for one of its indexes but not the others.
PDF of the specification here:
http://www.platts.com/IM.Platts.Content/MethodologyReferences/MethodologySpecs/ironore.pdf

Beyond that the index would make some kind of adjustment to normalize for the difference in quality.

3- Strathcona wrote a report for the government regarding the Wabush mine and problems with the manganese content in its ore.


Low sulfur is important for electric arc furnaces primarily used in the US. Every European contract i have looked at specifiies sulfur below 0.05% which is the standard. There is nothing wrong with 0.053% sulfur as long as there is manganese in the ore to help fix the sulfur. The rules in Europe are what they are but are an old rule of thumb. The chinese are not as picky and just want it to work. If their steel passes its astm tests they can export it. The price difference between fines and pellets is essentialy the price to sinter the fines. The chinese would rather sinter their own pellets than pay for our more expensive energy costs to do it at the mine. There is three ways to look at iron ore. Dso ore is hematite that come out of the ground at 60+ %Fe. It is broken onto small pieces and shipped dso=direct ahipping ore. In canadian fe mines the ore is not dso, it is beneficiated. It is ground up and separated woth magnets. Here they use magnetite and low grade hematite. Magnetite is more magnetice than hematite so it can be separated in larger pieces than hematite which undergoes a second fine grinding before it can be separated. Magnetite is much cheaper to process because it is separated on the first pass.

This is a huge difference between the cliffs operation and alderon. Alderon is 60-70% magnetite where cliffs is 80-90% hematite.



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Ross812

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Re: ALS.TO - Altius Minerals
« Reply #864 on: October 29, 2012, 08:34:06 PM »
"Cleveland-Cliffs have previously examined the possibility of installing a manganese reduction plant
that would reduce the manganese content of ore processed to allow production of the current pellet
products to continue, with their manganese content of either 1.2% or 2.0%, from ores that would
contain up to 4.0% manganese."

from with in the old Strachcona report.

Alderon is at 1.6% maganese well with in the range of 1% or 2 % that Cliffs is desiring at Wabush. It explains their high cost 40 year
old mine ($125 cash cost a ton last quarter) with very little desirable reserves left without the additional cost and hence why they bought Thompson Consolidated...where once they get operations on track they will do very well.

Not sure why Wabush is being compared to Alderon or Bloom lake very different.

dazel.

Exactly right! Structural steel should be <4% Mn or greater than 8 percent Mn. Going from 62 to ~100% Fe in steel means Mn is concentrated by a factor of 1.6. In order to stay below 4% Mn the ore must be 4/1.6. = <2.5%. Greater than 4% and Mn starts making steel very ductile. We can't have our bridges sagging! To use high Mn steels other elements need to be alloyed into the steel and you start to get into specialty steel.
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nostradamus

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Re: ALS.TO - Altius Minerals
« Reply #865 on: October 30, 2012, 03:48:31 AM »
http://www.alderonironore.com/_resources/news/2012-10-29-NewsRelease.pdf

Alderon also announces that while the progress of the feasibility study on the Kami Property continues to advance, certain engineering studies and optimization analyses within the overall feasibility initiative are taking more time to conduct and finalize than originally anticipated. The results of the study may still be released during the fourth quarter of 2012, but in any event, the results of the feasibility study will be released prior to January 31, 2013. This delay will not affect Alderon’s project development timeline.

Dazel

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Re: ALS.TO - Altius Minerals
« Reply #866 on: October 30, 2012, 01:55:18 PM »
http://www.bloomberg.com/news/2012-10-29/sandstorm-bets-on-buying-not-finding-gas-gold-corporate-canada.html?cmpid=yhoo


The guy at Sandstorm was interviewed by Jim Cramer....he is the darling of the royalty business right now...their capital for investing is about half of what the Altius war chest has despite their $1.2 billion dollar market cap...They are now entering nontraditional royalties area as "the world's first diversified streaming business." sound familiar?

I guess the question is he and his team smarter than Brian Dalton and his team? At a fourth the price we like Altius odds but it is frustrating to watch for sure.

Note: if Dalton is ever interviewed by Cramer we will sell the next day.
Dazel.

Dazel

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Re: ALS.TO - Altius Minerals
« Reply #867 on: October 31, 2012, 06:21:15 AM »
http://business.financialpost.com/2012/08/23/royalty-firms-strike-gold/

Interesting article.....Sandstorm raised the capital they have...

We know that Altius has looked at many deals...it will be interesting to see if they pull the trigger sooner or rather than later.

Dazel.

hohi

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Re: ALS.TO - Altius Minerals
« Reply #868 on: October 31, 2012, 01:04:54 PM »
I am also a shareholder of both the Sandstorm companies. I'm not sure if you realized that there are two of them - one that only makes deals on gold streams and another one that makes deals with all the other resource companies. Although Altius is 2nd largest portfolio position (and I plan to build that up over the next few years if the prices keep this low) I am pretty sure that the Sandstorm guys are a lot more experienced on the financial side of deals. But they are a lot more aggressive also and that brings risk with it.

Anyway, Altius will yield some 15%+ at current prices once Kami is up and running and they are dividending out the revenues from that. It's a very low risk play on ressources in my view and I just love the current prices to build my already big position to an even larger one ;).

Cheers!
Cheers,
hohi.

current resource positions: ALS.TO  //  NILSY  //  IVN.TO   //   DPM.TO   //   GAZ

ItsAValueTrap

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Re: ALS.TO - Altius Minerals
« Reply #869 on: October 31, 2012, 01:18:23 PM »
I think Sandstorm understands that you should sell stock when it is overpriced.  Those who get into the pyramid scheme will actually make money.  But if you are late...

2- Altius is one of the few companies in the mining space that actually buys back its shares.  (But even Altius understands that you should sell stock when it is overpriced.)  Teck, Potash, Northfield Capital are other companies that buy back shares.  Teck didn't do so in 08/09 because of too much debt.
« Last Edit: October 31, 2012, 01:21:03 PM by ItsAValueTrap »
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