ALS.TO - Altius Minerals

[SharperDingaan]

Blue, you might want to think of an ADV with just 5% (or less) of Kami - & NO new issuance of ADV shares. Similar prospective share value, but everyone holds the Kami Project directly - & not indirectly through ADV. Most would expect existing ADV shareholders to sell their blocks to existing partners, who would wind up ADV for their proportional interest of the o/s 5% interest of the Kami project.

 

Focus on the Kami Project; size, & time to shipment of the first ore.

 

SD

[giofranchi]

Don't know if this was posted before, but this is interesting and Altius is mentioned about 3/4 of the way down.

 

http://www.mining.com/web/the-value-of-project-generators-in-a-low-probability-industry/

 

Thank you for posting!

And don’t forget that ALS no longer is only a PG… Now it is both a PG and a Royalties Portfolio Manager. The PG side of the business is where growth will come from; the Royalties Portfolio Manager side of the business in where steady cash flow will come from. It is the combination of opportunities (PG) and safety (Portfolio of royalties) that imo makes ALS very attractive today. :)

 

Gio

 

[naboo]

Don't know if this was posted before, but this is interesting and Altius is mentioned about 3/4 of the way down.

 

http://www.mining.com/web/the-value-of-project-generators-in-a-low-probability-industry/

 

Thank you for posting!

And don’t forget that ALS no longer is only a PG… Now it is both a PG and a Royalties Portfolio Manager. The PG side of the business is where growth will come from; the Royalties Portfolio Manager side of the business in where steady cash flow will come from. It is the combination of opportunities (PG) and safety (Portfolio of royalties) that imo makes ALS very attractive today. :)

 

Gio

 

 

Gio,  to me, ALS is still a PG(with some goodwill).  I won't feel relieved until I see big royalty income on ALS' earning report (hopefully, sometime this summer).  Show me the money!!!

 

I had bad experience from Sandstorm.

[gary17]

What is a PG?  ???

[BRK7]

What is a PG?  ???

 

PG = prospect generator

[Blue Macaw]

Heading towards 13 now..I will try to pick some up next week when I get some money. Either Altius or Maxim Power

[Blue Macaw]

There must be some more value to the CDP than what people think and that Sherritt must have sold to Altius. Assets are like 24 Million for the CDP so Altius must have paid 18 million i goodwill. Could there be some business/deal that is more or less finished that Sherritt was about to spin out?

[argonaut]

Just read how Pabrai bought and sold (too early) ALS...really likes Dalton but very limited liquidity was hard for his size fund.

[BRK7]

Just read how Pabrai bought and sold (too early) ALS...really likes Dalton but very limited liquidity was hard for his size fund.

 

Interesting.  May I ask where you read this?

[argonaut]

Annual report

[alertmeipp]

Close at 13.59. 3% discount to offering price. Not nice.

[original mungerville]

wake me up if it drops another $3

[Blue Macaw]

wake me up if it drops another $3

 

So you believe it is worth around 10? Equity wise if you look at their statement (book value) it is around 10. At the moment no one believes in Kami or iron ore for that matter. If you want to take a chance and believe Kami will be built then buy Alderon. If you believe it will be built but dare to take the full risk then buy Altius. In the feasibility study Alderon has calculated with 107 dollar per ton for the first years and then 102 dollars. So they are not too far off which means there is still a big chance it will be built.

 

I think Kami will be built and I am thinking about entering Alderon at these attractive prices. As I wrote yesterday I think a diluted valuation could be around 2,8 so that means more than 100 % in 2 years (26 months). Not a bad catch! There are however many of the mines that will not be built or at least not the next 10 years i Canada. Bloom lake is a huge disappoitment and the cost scenario scares the hell out of investors. Many mines in the north where drilling is on going has no infrastructure. Century iron is trying to develop a small scale mine (2 M tons per year) and with the money from that extend rail tracks further north. It could work but will take time.

 

So it is more likely that IOC continues to expand at Caraol lake. They have thoughts about going from current 23 M tons to 50 M tons. New Millenium will also go to 6 from current 2 in to 2016. Bloom lake is however stuck (badly with cash cost at 87 and D/A of 25) and Wabush is gone. (Something that wasn´t calculated with by the Canadian government. I read those 2 would produce over 18 M tons.) Here Kami will come in to replace those. There is a reason they have approved the power line as well. Julienne lake would be second choice and Fire lake north third. The rest will come on stream next comodity cycle in 20-30 years. Which means I believe around 95-105 dollars per ton is where we will have break even (new cheap australian ore entering the market - expensive chinese/other countries and smaller scale mines)

[Blue Macaw]

If price for iron ore stays around 100 for some quarters it is likely Bloom lake will hibernate meaning another loss of tax for the canadian government.

Remember Cliffs want to sell Bloom lake now.

[giofranchi]

Gio,  to me, ALS is still a PG(with some goodwill).  I won't feel relieved until I see big royalty income on ALS' earning report (hopefully, sometime this summer).  Show me the money!!!

 

I had bad experience from Sandstorm.

 

Ahahahahah!!! That’s what I call “a cautious approach”… ;)

 

I am not familiar: what happened with Sandstorm?

 

Thanks,

 

Gio

 

[Guest Dazel]

Altius valuation change will not be in 5 and 10 cent intervals...it will move very quickly....don't worry about the zigs and zags....is what Mungerville is saying...not it's going to$10.

 

It would be great if someone could do a comparison of Sandstorm to Altius...I think Sandstorm hit the high end of the royalty valuation...40 or 50 times ebitda in 2012...

 

Sandstorm even after it's 50% drop now trades at around 17 times ebitda from what I see...royalty income should trade at 20x...depending on  the royalties. At 17x Altius would trade around $16.50 on royalty income alone.

 

 

[original mungerville]

Right, let's not worry about small gyrations - even ones like from $16 to $13.70. This is pretty natural. The small and medium gyrations won't typically permit you to double down so they are not worth sweating about.

[SharperDingaan]

Just keep in mind that we may well be seeing a bid for ALS in the very near future.

 

The float remains tightly held, & this thing has sunk like a brick since the issuance - despite UW support.

Please tell me why we would not get a 30%+ premium to a 23x multiple - for an ALL-STOCK exchange of ALS for a FNV; and why this could not get done within a 6-8 week period - before Kami is even announced. We would also like to know why, were we an institutional buyer, we should not also be feeing just a little abused - at paying $14/share for something that appears to worth a lot less; & supporting any bid that would get us out of what appears to have been the UW from hell.

 

Royalty ownership is agnostic, we care only about the multiple - & that we are receiving the bulk of the CF as a cash dividend.

If an FNV can get 23x for it, & ALS can only get 13x; how long can it really be before ALS is either forced to sell those royalties for the 10x difference, or get gobbled.

 

The clock is ticking a lot faster than it was - & those cheap shares are not accumulating in friendly hands.

 

SD

 

 

 

 

[Otsog]

On the latest ALS presentation they still have Alderon as Q4 2015.  This is the response from ALS:

 

Hi Otsog and thank you for your query.  As I understand it Alderon is already breaking ground and has ordered long lead items but I admit I am uncertain as to when their 26 month clock began ticking??  I will address this internally and possibly amend the slide accordingly.  Thank you for pointing out this apparent inconsistency.

 

Regards,

Chad

 

The presentation link on the Altius website had been down for a bit there (week, week and a half?).  Not sure when it went back up, it has a date of May 6, but I've certainly checked it after May 6 and the link was still down. 

 

Anyway, since Chad's response the slide still says Kami estimated Q42015 (slide 11).  Assuming they did address this internally and concluded Q42015 was still likely that is very good news.  Of course financing and construction being full steam ahead would be much better news.

[alertmeipp]

Added today. This should provide better than cash return! I hope!

[SharperDingaan]

We don't post on the stock house board - however the market displeasure with the UW is abundantly clear.

 

45,127 shares crossed the TSX Friday, at $0.585 below the previous close. Over the 4 previous days 396,745 shares crossed the TSX at up to $0.05 below the $14.00 issue price. Most would posit these transactions are related, & they represent a net UW support purchase of approximately 351,618 shares (396,745-45,127), or 7.57% of the new issue of 4,642,857 shares. i.e: Fridays decline was because of an UW dump of inventory, that the selling group had been very well paid to hold.

 

Virtually every UW sold includes research reports highlighting the merits of the vision being sold - but apparently not this one. It is abundantly clear that the nature of ALS has materially changed with the royalty, there are game changing multiple & dividend valuations either already here - or imminent, & there are two very large future changing transactions being discussed that will settle over the summer - yet narry a report in sight. What exactly, did shareholders pay for - Larry, Curly, & Moe.

 

If a vendors sales rep is not meeting the needs of your account, you show your displeasure. Pretty soon thereafter, you either see something to make it up to you - or a new sales rep. Ok it was a best efforts UW, with associated business risk; but show shareholders that we are NOT talking to Larry, Curly, or Moe .... cause right now, we cannot tell the difference.

 

SD

 

 

 

[JAllen]

We don't post on the stock house board - however the market displeasure with the UW is abundantly clear.

 

45,127 shares crossed the TSX Friday, at $0.585 below the previous close. Over the 4 previous days 396,745 shares crossed the TSX at up to $0.05 below the $14.00 issue price. Most would posit these transactions are related, & they represent a net UW support purchase of approximately 351,618 shares (396,745-45,127), or 7.57% of the new issue of 4,642,857 shares. i.e: Fridays decline was because of an UW dump of inventory, that the selling group had been very well paid to hold.

 

Virtually every UW sold includes research reports highlighting the merits of the vision being sold - but apparently not this one. It is abundantly clear that the nature of ALS has materially changed with the royalty, there are game changing multiple & dividend valuations either already here - or imminent, & there are two very large future changing transactions being discussed that will settle over the summer - yet narry a report in sight. What exactly, did shareholders pay for - Larry, Curly, & Moe.

 

If a vendors sales rep is not meeting the needs of your account, you show your displeasure. Pretty soon thereafter, you either see something to make it up to you - or a new sales rep. Ok it was a best efforts UW, with associated business risk; but show shareholders that we are NOT talking to Larry, Curly, or Moe .... cause right now, we cannot tell the difference.

 

SD

 

 

Why do you believe Altius will imminently pay a dividend?  Debt will be 5-6X cash flow, and Dalton doesn't seem like he wants much debt at all.  Say he pays a dividend of 25% of the cash flow (using $5M/$20M) that's a 1.35% dividend yield.  1.35% is not something to get terribly excited about.

 

 

And why the incessant short-term speculation about the market price here that verges on promotion?  I thought we were long-term value investors happy to have price declines and not worried about where the price goes in the short-term.  I know I'm not.

[SharperDingaan]

ALS has repeatedly stated they will pay a div ASAP.

Re the CC; ALS will be selling securities to pay down debt - not organic CF.

ALS will be paying out 60-75% of their CF, & it will be discounted at 1-1.5%; or someone else will be paying it instead of them.

Continue at these prices & there will not be a ALS, they will be part of someone else.

 

We are agnostic as to whether we get the PRML & CDP royalty CF from a ALS, or someone else; but have already had the take-under experience thanks - & are not about to repeat it. If we ultimately have to accept the stock of someone else, we want the highest price possible for our shares, & are not going to be polite.

 

We will also not hesitate to call a bad UW experience when we have paid for it. The UW group was hired by the ALS board, & that board works for us - the ALS shareholder. It is highly likely that Fridays 45,000 shares are not in friendly hands - & that without an aggressive  response there could well be a lot more of them very shortly; you only need 70% of the 4.6M shares just issued to support a bid - & we are over the 10% reporting requirement (3.25M share threshold).

 

.... what do think will happen to the share price, if/when there is a bid.

 

SD

 

 

 

 

 

[nostradamus]

ALS has just posted some more information on their website on the Prairie Royalties and the CDP properties. Not read through yet, but looks like there maybe some new material for the board to analyse.

 

http://altiusminerals.com/prairie-royalties/overview

http://altiusminerals.com/projects/cdp

 

N.

[no_free_lunch]

I don't quite understand the rationale of how the royalties can be worth so much more than what was paid.  If they are worth double then why did Sherritt hand them over for such a bargain?  That would imply some serious incompetence on their part wouldn't it?  I understand that markets are not perfectly rational and sometimes people do get a deal but usually there is something to explain the difference.  It could be tax considerations, cost cutting, synergies, or perhaps the value becomes apparent over time as situations change but for Sherrit to just not know how to price the royalties seems bizarre.

 

I do see merit in the UW price as an analysis point as presumably the institutional investors understood what they were getting.  So if the discount to $14 continues to widen I will be a buyer based on that simple logic but it is difficult to believe that this is an immediate double.