ALS.TO - Altius Minerals

[Guest Dazel]

http://www.equities.com/editors-desk/futures-commodities/rick-rule-you-ve-suffered-through-the-pain-now-stay-around-for-the-gain

 

Rick Rule has been around to see the 80's and 1998 to 2002... Bear markets...Most have not...the average drop in resource companies is 75%! Now that is bad....Altius have done what they have done in this environment to the doubt of "everyone". They will continue to do well in this environment because of their management and model...but commodities do take off...

Look out!

 

 

 

[gary17]

I don't see in Sedi where Rick has a stake in this company...

 

Dazel are you from Europe?

[Guest Dazel]

 

 

75% of Altius holders do not have file publically in Canada.

[BRK7]

 

 

75% of Altius holders do not have file publically in Canada.

 

What is the basis for this 75% figure?

[SharperDingaan]

We don't see anything untoward with the articles; what we see is difference in opinion. Nothing wrong in this, or unusual.

 

Don't believe the $42/t. Qualified engineers wrote the feasibility study, they had access to data we don't have, & they were required to comply with the standards of their organization. A major shareholder subsequently invested 120M on the basis of that report, & committed a further 100M. Auditors have confirmed existence & verified the related factual content of MD&A relevant to the financial statements. All these parties had to do DD before they signed off, & all had to concur the conclusions of the feasibility study were reasonable. We can dispute the meaning of reasonable; but the series of independent & factual actions - say that it is.

 

Don't trust management. Management & their UW have probably had a more thorough grilling by this board, in the last 4 weeks, than they have had in the last 6 months. Very well versed people, blunt questions, no BS, no-where to hide, deliver the goods in short order - or get merged; & the recent changes & disclosures evidence just how effective this has been. All of which is highly desirable; because a Bre-X, would have buckled very early under this kind of scrutiny.

 

Reality. ADV management is in a very difficult place; they are not in financing control of the Kami Project, are constrained by confidentiality agreements, & cannot speak. ALS management is similarly affected, but is in a far worse position; they cannot fully defend themselves re the abusive capital raise, because they cannot disclose the rest of the related matter. Severe grilling is not a pleasant experience.

 

Mining is all about managing risk, & there are no guarantees. Development delays, cost over-runs, shut-ins, etc. are common - & inherent to the nature of the business. Hubris (Barrick), & slime (VSX), are part of the business. An investor either has the tolerance for this or does not; you cannot be a little bit pregnant. ... though the VSX might disagree.

 

To us this is just investor turnover, from value to institutional & momentum. There will be more of it as we go along, & the related dissonance is not necessarily a bad thing. Different strokes for different folks.

 

SD

 

 

 

 

 

[Guest Dazel]

You will also note that Mason Hill partners William Strong is a product of BenJamin Graham vis a v learning from the late great Bill Ruanne. Altius largest reporting shareholder...you will note that there are very few other reporting shareholders...Brian Dalton being the largest being required to report...

 

http://www8.gsb.columbia.edu/sites/valueinvesting/files/files/Graham%20%26%20Doddsville%20-%20Issue%2014%20-%20Winter%202012.pdf

 

So Gio....you are in good company...Bill Ruane of course famously was the only one that Mr. Buffett recommended to his original Buffett partners.

[ItsAValueTrap]

I always thought that their presentations were promotional and maybe that should have been a warning sign.

 

Well, imo what’s promotional and what’s not, in a presentation about a business that’s radically transforming itself, is… at least very subjective.

False information, on the other hand, is not subjective at all.

Therefore, I want to know: are we talking about something subjective, or about something that can be objectively proven false?

 

Gio

 

1- Global Mining Review states that it is an "independent news bulletin".  Figure it out.

 

2- Yes, mining is subjective.  If you make BS projections about the future, you will not go to jail for it.  This makes mining attractive for scumbag promoters... they can deceive investors without doing anything illegal.

 

Let's keep things in perspective.

On a scumbaggery scale of 0 to 10, where Barkerville Gold is a 9/10...  Altius would probably be a 2 out of 10.  Anything Stan Bharti, Forbes and Manhattan, King and Bay West would probably be between 4 and 7.  Sheldon Inwentash is an 8/10.  Bre-X is a 10/10.

Altius is not that scummy.  But it makes me uneasy.

 

I doubt their engineers would make an error of that magnitude when performing their due diligence.

BBA did technical report work for both Bloom Lake and Kami.

They did make an error of large magnitude with Bloom Lake.

Who knows what Kami's actual numbers will be.  I do not know.

 

Anyways, that issue has been discussed in this thread.

[Ross812]

I doubt their engineers would make an error of that magnitude when performing their due diligence.

BBA did technical report work for both Bloom Lake and Kami.

They did make an error of large magnitude with Bloom Lake.

Who knows what Kami's actual numbers will be.  I do not know.

 

Anyways, that issue has been discussed in this thread.

 

BBA was hired by Alderon to perform the feasibility study; Hebei would have their own engineers back check the BBA numbers before they committed $250M. If BBA was too far off, they would not have invested. 

[bizaro86]

 

BBA was hired by Alderon to perform the feasibility study; Hebei would have their own engineers back check the BBA numbers before they committed $250M. If BBA was too far off, they would not have invested.

 

There has been some discussion that the Chinese might choose to build the mine whether its economic or not to give them leverage against the big Fe producers/for 'strategic' security of supply reasons. If so, Hebei might invest even if the economics aren't there. I don't have the domain knowledge to evaluate whether BBA is correct, but I do know that assumptions at the front end of big projects are always wrong, the question is only by how much. (And very occassionally which direction)

 

As an ALS shareholder, it doesn't matter to me whether the mine is economic as long as it gets built and operated so the royalty gets paid. Of course, Alderon shares running up so ALS can sell them would be nice as well...

 

 

[Blue Macaw]

So below 14 today. On monday we will have a press release about the closing of the equity offering. I expect no other news then since they have stated most of it in the prospectus.

 

And then we wait....Julienne lake should be out first and I am expecting a positive response here. If there are no news before end of may we will see share price slide towards 13 as everyone will believe that all is over with Kami and Julienne lake. But of course it is not...It is actually quite funny how people tend to swing with their predictions. One day we will have all royalties producing and the next Kami is out because iron ore drops a bit and Altius is a fraud etc. We will see fluctuating prices on iron ore during construction as well. Only if very severe will the construction stop.

 

Bloom lake is not what everyone thought it to be. Cash cost at 87 + 25 in amort./depr makes this a losing mine. However I don´t know what is included in the last 25 neither the first 87. The other mines Cliffs have have cash costs at around 60 and amort/dep of 12. According to the last piece I read from IOC and Carol lake they had a cash cost of 60. Don´t remember about amort/dep. there but in total the mine is very profitable so of course it is possible to make Kami a similar one. (However Kami 30 %, Carol lake 39 %).

 

If Kami could have 60 in cash cost and freight 22 and amort. dep around 12 we would have total costs around 94. With a price over this we would see it built. Alderon´s off take is some % lower than normal price so for Alderon shareholder the margins would be low. Altius would however get their share and China as well. If China could lower the price generally it will be better for all the chinese. Could they ship the ore losing money on the trade? Yes I do believe the Chinese could do that as long as it is still cheaper than the ore they have at home.

 

 

[Guest Dazel]

http://www.labradorironore.com/News-Releases/Press-Release-Details/2014/Labrador-Iron-Ore-Royalty-Corporation---2013-Results-of-Operations/default.aspx

 

You can see IOC's 5 year numbers...since Alderon's management is from IOC they are going to try to replicate what they did at IOC...that looks like a lot less than $60 cash costs to me....from the numbers IOC has produced over the last 5 years...

 

It does not matter what you and I think it matters what the international partners think...they have been testing Kami's product in their furnaces to establish it's efficiency...management will have to be able to explain why they are different from Bloom Lake and closer to Carol Lake...they did a good job of the break down of cost differences between Bloom Lake and their feasibility study in their latest presentation. However, again it does not matter what I think or you think...If they can convince the integrated steel producers that they should be somewhere in between Carol Lake and Bloom Lake and everyone will be happy...Labour costs should be coming down as well.

[Guest Dazel]

http://www.alderonironore.com/_resources/presentations/ADV_PPT.pdf

 

http://www.alderonironore.com/_resources/Conference_Call_Transcript.pdf

 

 

For what it is worth:

Alderon's explanation of it's differences between Kami and Bloom Lake.....in the transcript they refer to IOC's cash costs being in the range of $42...they would know they produced them.

 

Once again it is the worlds major integrated steel makers like Hebei that will decide the fate of Kami and JL....not us on this board!

 

Dazel

 

 

[Blue Macaw]

http://www.alderonironore.com/_resources/presentations/ADV_PPT.pdf

 

http://www.alderonironore.com/_resources/Conference_Call_Transcript.pdf

 

 

For what it is worth:

Alderon's explanation of it's differences between Kami and Bloom Lake.....in the transcript they refer to IOC's cash costs being in the range of $42...they would know they produced them.

 

Once again it is the worlds major integrated steel makers like Hebei that will decide the fate of Kami and JL....not us on this board!

 

Dazel

 

Yes you are probably right. I read the transricpt and it was interesting. They really reiterate all the time that the projcet will not be like Kami but more like IOC. I could start to believe it. Carol lake is just fantastic and Labrador Iron ore Roualty company is also starting to look interesting with prices under 30 CAD per share. I do think that Kami will be slightly more expensive in cahs cost respective due to lower crade.

 

I also believe we will see a project but a lot of money needs to be put on the table and I think debt/ equity will be more like 40/60. It seems hard to get a loan these days. I also see the same scenario for the oilsand companies.

 

So with 95 M on hand and an additional 1100 M to be coughed up we could see could see a dilution like 660/1,5 (share offering price) =440 M more shares. So total share count would then be in the region 440+150 = 590 M. With this share count I still se at least a doubling of what you invest now (or at the price 1,5). Kami has passed everything now. Just the final deal. Lets keep our fingers crossed.

[Blue Macaw]

Actually it doesn´t have anything to do with fingers crossed. Just keep working lads!! We are on the right side of probability. If anything is to be built it is Kami.

[giofranchi]

1- Global Mining Review states that it is an "independent news bulletin".  Figure it out.

 

2- Yes, mining is subjective.  If you make BS projections about the future, you will not go to jail for it.  This makes mining attractive for scumbag promoters... they can deceive investors without doing anything illegal.

 

Let's keep things in perspective.

On a scumbaggery scale of 0 to 10, where Barkerville Gold is a 9/10...  Altius would probably be a 2 out of 10.  Anything Stan Bharti, Forbes and Manhattan, King and Bay West would probably be between 4 and 7.  Sheldon Inwentash is an 8/10.  Bre-X is a 10/10.

Altius is not that scummy.  But it makes me uneasy.

 

Thank you for your perspective, Glenn!

 

Of course, I was not talking about “doing anything illegal”… when I said “false information”.

Instead, by “false information” I meant providing its investors with too rosy a view about ALS’s future business prospects.

 

If you are sanguine and optimistic, but you keep forecasts of future profitability in check and don’t promise something truly out of reach, you might be labeled “promotional”, but I don’t see anything too bad. I myself am always such an optimist about my business prospects… and, please, don’t ask my partners if they agree!! ;D ;D ;D

 

On the other hand, if you go so far as to reach the point of promising something way too fanciful… even if it is not illegal… well, that would be a disservice to your fellow investors/partners, and shouldn’t be tolerated!

 

I was wondering if you think ALS’s management is just a bit too much sanguine about their business, or if they are actually doing a disservice to investors.

 

But I guess your last post is explicit enough! ;)

 

Gio

 

[gary17]

Regarding the Kami project... I'm seeing that it will cost $1.6b , targeted start is summer ... Financing lead by BNP with balance of equity offering.... Is this consistent with what others are projecting here?

Also, any idea if BNP the lender has done its own cost analysis ?

[alertmeipp]

Maybe Hebei will just do dim sum bond (hot these days), and get a big chunk of ADV near current market price to get it done. Hebei will look rather stupid if someone else get in Kami much cheaper than itself.

 

I own much more ALS than ADV. For me, get the project going is the key, royalty worth a lot.

 

 

[SharperDingaan]

Accept the numbers that have been put out; we must be fairly close to completion of financing, & they are the best estimate as at today.

Actual cost will differ from the estimate - as over the 2yr construction period sh1te will enevitably happen.

 

Keep in mind that the Kami Project is being financed, not ADV; which currently owns 75% of it. When it is over, ADV sharehlders may well end up with just a small royalty that is sold for cash, & the company ultimately wound up. Probably at a per share return of funds something above the convertibles conversion price.

 

Obviously, they will be very restricted in what they can say at present; so let them get on with it.

 

SD

 

Re Disclosure: We own shares in both ALS & ADV

 

 

 

 

 

[original mungerville]

So below 14 today. On monday we will have a press release about the closing of the equity offering. I expect no other news then since they have stated most of it in the prospectus.

 

And then we wait....Julienne lake should be out first and I am expecting a positive response here. If there are no news before end of may we will see share price slide towards 13 as everyone will believe that all is over with Kami and Julienne lake.

 

Blue Macaw,

 

Why are you expecting Julienne news to be out first and it sounds like end of May or June? Are they not working with government? If so, would the government act that fast? I mean would Julienne news not be more likely in the Fall rather than in the Spring? Why May?

 

 

[Blue Macaw]

So below 14 today. On monday we will have a press release about the closing of the equity offering. I expect no other news then since they have stated most of it in the prospectus.

 

And then we wait....Julienne lake should be out first and I am expecting a positive response here. If there are no news before end of may we will see share price slide towards 13 as everyone will believe that all is over with Kami and Julienne lake.

 

Blue Macaw,

 

Why are you expecting Julienne news to be out first and it sounds like end of May or June? Are they not working with government? If so, would the government act that fast? I mean would Julienne news not be more likely in the Fall rather than in the Spring? Why May?

 

:) Just a gut feeling. I have nothing to rely on really but I believe Kami will drag on for some time which is why I said Julienne lake will be first. I suppose the whole set up with the new JV is ready by now (Wisco, Xin and Altus 10 %) as well so therefore the only thing that is missing now are some negotiation between Gov. and JV to set up the financials.

[original mungerville]

I have no idea how long Julienne approval will take.

[Blue Macaw]

I think we will see longer time until approval than anticipated. This will make share price move down to 13.

[tombgrt]

I think we will see longer time until approval than anticipated. This will make share price move down to 13.

 

Are you sure your opinion is not going to change to a $15 target within the week?

[Guest Dazel]

 

 

Here is a call...if we hit $13.... We will be taken out with in a week! The royalty companies receiving a proper multiple would salivate.

 

 

 

 

[abyli]

I had a short phone talk with Chad last Friday. Here are my notes

(1) Kami Cost

Kami cost will be similar to IOC, $45s + $20 shipping = $65s per ton. Bloom lake hurried up into production because of bubble times. Bloom did not even have manganese separation facility, so their cost went way higher.

 

(2) Kami Financing

expect to be done in 30-60 days.

 

(3) JL

Already discussed for years! Will sit on the table again 5/17. Expect news in summer, worse case 9/2014 or 10/2014.

 

(4) equity deal

ALS planned to sell securities in hand, but 4 months was too short. $120M debt is the max they feel comfortable so they raised equity. 8% discount from previous close price. Brian has been sweating for 4 months for the coming dilution... Chad and Brian are 100% in Altius.

 

After deal is done, $120M debt, $10-$20M cash in hand, $8M cash flow a quarter.

$30M cash flow - $4-$5M expense - $5M tax = $20M for ALS.

 

(5) "We bought the best diversified portfolio on the globe. " CDP alone is worth the total deal cost. Will find partner for CDP, expect CDP news out in 6-12 months.

 

(6) Once Kami debt financing is done, ALS will monetize equity by selling to strategic partners, then use that to pay off debt. Expect that to happen in 12-24 months.

 

Bing