Guest Dazel Posted May 21, 2014 Share Posted May 21, 2014 Gio, As any good management does they cut costs...they stopped producing annual reports. Their annual reports are that are filed on sedar... Dazel. Link to comment Share on other sites More sharing options...
giofranchi Posted May 21, 2014 Share Posted May 21, 2014 Gio, As any good management does they cut costs...they stopped producing annual reports. Their annual reports are that are filed on sedar... Dazel. Ah! Ok! Got it! ;) Thank you, Gio Link to comment Share on other sites More sharing options...
Guest Dazel Posted May 21, 2014 Share Posted May 21, 2014 http://www.newindianexpress.com/editorials/Speed-Up-Statutory-Nod-for-Iron-Ore-Mining/2014/05/21/article2235685.ece So in March the iron ore price got crushed when India approved iron ore exports (remember Indian iron ore content is poor)...from the headline above can you tell that the Indian government just shut down 100 million tonnes of iron ore production! Steel plants will have to close because they will not have the ore to produce. So how much Indian ore will be exported? 0 50 million tonnes a year are taken out of the market because mines become depleted (Wabush)..... Kami and JL will be built...steel producers want stability. Link to comment Share on other sites More sharing options...
Liberty Posted May 21, 2014 Share Posted May 21, 2014 May 21, 2014 Alderon Iron Ore Corp. (TSX: ADV) (NYSE MKT: AXX) ("Alderon" or the “Company”) is pleased to announce that The Kami Mine Limited Partnership (“Kami LP”), an affiliate of Alderon, has received Ministerial approval for a General Environmental Protection Plan, a Valued Ecosystem Component Environmental Protection Plan and an Environmental Effects Monitoring Plan (the “Plans”). These Plans meet three conditions required under the release from Provincial Environmental Assessment prior to commencing construction at the Kami Iron Ore Project (“Kami Project”). “We continue to work on several fronts to get ready for the start of construction planned for later this year,” says Tayfun Eldem, Alderon President and CEO. “The Province continues to strongly support our Kami Project and we look forward to a continued positive working relationship.” Alderon had to submit these plans to the Newfoundland and Labrador Minister of Environment and Conservation and receive Ministerial approval prior to start of construction. A Provincial Government interdepartmental review of the submitted Plans was completed in accordance with the Environmental Protection Act and it was determined that the Plans are acceptable and are therefore approved for the construction phase of the Kami Project. Link to comment Share on other sites More sharing options...
txitxo Posted May 21, 2014 Share Posted May 21, 2014 The way I look at ALS is basically the same way I look at BH: I like royalty and franchise businesses, and I think they have much in common. First of all they provide an able manager with a constant stream of cash that requires little capital to grow. Both the fast-food business and the mining business are here to stay (though the mining business might certainly be more volatile), and I don’t see them subject to any kind of disruptive change in the foreseeable future. Mr. Dalton and Mr. Biglari have proven to be very good at what they do, they are both very young, and still have plenty of time to create much value. Of course, they may encounter obstacles along the way: Kami for ALS and CBRL for BH… And there are risks: ALS is not truly yet a proven royalty business, it is becoming one; BH is not truly yet a proven franchise business, it is becoming one. Yet, overall I like what I see in both cases. I will keep buying as the prices of ALS stock and BH stock trend down (today included ;)). Gio I try to use the same criteria as I do with my mechanical screens, even if I apply them "manually". First, I look for markets which are not expensive. Canada has quite a high CAPE right now, but mining stocks have taken a beating in the last few years. Then I require the company to be cheap, at least statistically speaking. That is true for Altius, both in terms of multiples and optionality. Third, I look for some "quality" factor, not necessarily moats and crocodiles, but something which makes the company very unlikely to be mismanaged: Dalton has one of the best records ever. Fourth, I look at the 52w price action, stocks which are too low tend to keep falling, they provide good absolute returns but a worse rate of return over the years. The current price is still ~80% of the 52w maximum, which is OK. And the cherry on the pie is negative sentiment. You want to see people pissed-off, emotional, like FTP, SHLD or PBG. Therefore, my trigger to buy was SD's three-stooges posting. If Dazel were to start seriously dissing Altius management, then it'd be "balls to the wall"... You never know what is going to happen to the price, even if you spend 400h studying the company, but if you buy many stocks which fulfil the criteria above, good things will happen to you. Link to comment Share on other sites More sharing options...
giofranchi Posted May 21, 2014 Share Posted May 21, 2014 You never know what is going to happen to the price, even if you spend 400h studying the company, but if you buy many stocks which fulfil the criteria above, good things will happen to you. How many stocks are “many” enough? I don’t think your portfolio is made of 5 to 10 stocks like mine… Am I right? ;) Gio Link to comment Share on other sites More sharing options...
txitxo Posted May 21, 2014 Share Posted May 21, 2014 You never know what is going to happen to the price, even if you spend 400h studying the company, but if you buy many stocks which fulfil the criteria above, good things will happen to you. How many stocks are “many” enough? I don’t think your portfolio is made of 5 to 10 stocks like mine… Am I right? ;) Gio About 50. I buy a little every week, so I usually manage to get things which are in the top 0.5% of the stock universe I am looking at (countries with CAPE < 18). Link to comment Share on other sites More sharing options...
moody202 Posted May 22, 2014 Share Posted May 22, 2014 Fear and disappointment is starting to be seen on the boards which is a sign that the share price will be pushed lower than what they are worth. Which boards are you referring to other than this one? Link to comment Share on other sites More sharing options...
giofranchi Posted May 22, 2014 Share Posted May 22, 2014 http://glennchan.wordpress.com/2014/05/22/anybody-who-believes-this-slide-deserves-to-lose-money-in-junior-mining/ Glenn, It is not that I believe or don’t believe that slide… It is simply that I am not qualified enough to judge it! But… imo very few people are! Trying to dig too deeply into the technicalities of a business is dangerous… You might get the feeling you really know them… While instead you don’t! Most important of all imo is that you don’t have to, in order to recognize an outstanding management and a predictable business… In other words, you very often run the risk of missing the proverbial forest for the tree… Take for instance LMCA… Just a few days ago you told me you thought LMCA was easier for you to understand than ALS… Then you also wrote LMCA would buy back its shares and sell Live Nation… What really happened is that LMCA didn’t buy back its shares and announced the intention to buy 3,700,000 more shares of Live Nation… Probably you thought a better use of capital buying back its shares than investing more funds in Charter… Mr. Malone evidently thought otherwise… And probably you thought Live Nation is no longer a great investment… Mr. Malone evidently thought otherwise… I would never be able to understand all the technicalities of the businesses I like, but I like them nonetheless… I would never be able to foresee their next moves, but I think I am able to foresee that in the long run “good moves” will outweigh “bad moves”, and those businesses will create value… I am positive that, if I were to question every step management takes, I wouldn’t be able to invest in any business… Is there what I look for in the people I want to partner with? If the answer is Yes!, I let them do their work, and take both the good and the bad news as they come! Gio Link to comment Share on other sites More sharing options...
Guest Dazel Posted May 22, 2014 Share Posted May 22, 2014 http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/encana-expected-to-score-big-with-prairiesky-ipo/article18786620/ The prairie sky royalty multiple will be very high and investors cannot get enough of it...once again showing the value of royalties... Link to comment Share on other sites More sharing options...
Blue Macaw Posted May 22, 2014 Share Posted May 22, 2014 If you study the CDP power point slide where you can see the locations of the different porjects, you can see a clear cut path of which mines send their coal to export and which stay in the country. So we have Telkwa and Tower that might go to export (close to railway and port) and the rest will likely transport in the country. Now, I don´t know the need for coal in Canada but for export it is likely we see some chinese partners in a near future. There are significant deposits on the side which is very likely for export. China imported 300 M tons of coal last year and that is set to increase. Link to comment Share on other sites More sharing options...
Guest Dazel Posted May 22, 2014 Share Posted May 22, 2014 http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/encanas-growing-prairiesky-offering-lands-it-among-canadas-top-ipos/article18774781/ At least one prarie royalty is getting market premium multiple! Link to comment Share on other sites More sharing options...
gary17 Posted May 22, 2014 Share Posted May 22, 2014 seems like natgas is getting the premium - that's what the market likes right now Link to comment Share on other sites More sharing options...
SharperDingaan Posted May 22, 2014 Share Posted May 22, 2014 Re the CC timeline; by Monday next week - we are 2-4 weeks away from a Kami announcement. SD Link to comment Share on other sites More sharing options...
bizaro86 Posted May 22, 2014 Share Posted May 22, 2014 http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/encanas-growing-prairiesky-offering-lands-it-among-canadas-top-ipos/article18774781/ At least one prarie royalty is getting market premium multiple! I doubled my ALS position earlier this week, but I don't think this is especially comparable. Prairie sky's huge fee land base will support future drilling growth this year and every year in the forseeable future. The thermal coal royalties are similar quality, but are much less likely to experience growth, as all the new power plants being built in Alberta are either natural gas or renewables. Link to comment Share on other sites More sharing options...
Guest Dazel Posted May 23, 2014 Share Posted May 23, 2014 Bizzaro, They better have growth!!!!!!! A royalty is a royalty...whether it is music, publishing or resources they have implied values. http://www.bloomberg.com/news/2014-05-22/encana-raises-1-34-billion-in-largest-canadian-ipo-since-2000.html?cmpid=yhoo Altius should have used TD or CIBC.... as their equity offering was comical at Scotia Capital. Link to comment Share on other sites More sharing options...
Guest Dazel Posted May 23, 2014 Share Posted May 23, 2014 http://www.canada.com/story.html?id=8bfb00c7-880b-4545-974a-4a3b6cb53443 Franco Nevada is the second largest ipo...royalties are coveted assets. Link to comment Share on other sites More sharing options...
bizaro86 Posted May 23, 2014 Share Posted May 23, 2014 Bizzaro, They better have growth!!!!!!! A royalty is a royalty...whether it is music, publishing or resources they have implied values. http://www.bloomberg.com/news/2014-05-22/encana-raises-1-34-billion-in-largest-canadian-ipo-since-2000.html?cmpid=yhoo Altius should have used TD or CIBC.... as their equity offering was comical at Scotia Capital. My point was only that PrairieSky has excellent assets with highly visible growth, and their multiple reflects that. Would it be reasonable for Altius to trade at the same multiple? Sure, but then you can't add the growth as an extra, since that high multiple already accounts for the growth. If you use a "growthy" multiple for the existing assets, and then add a big premium for growth projects, you're double counting. Link to comment Share on other sites More sharing options...
Guest Dazel Posted May 23, 2014 Share Posted May 23, 2014 Bizzaro, Understood. I am simply showing royalty values...all royalties are different...but there is a bottom multiple and top multiple... Prairie Sky is going to trade on it's yield....as most royalty investors are seeking an income stream with some upside in equity. Altius does not have a dividend so this and the fact it is virtually unknown to the royalty investor community is likely why it is trading at the bottom end of the royalty multiples. When Altius initiates a dividend they will attract the largest investor group in the world which is the income investor. At that point we will get a better royalty valuation but the large upside is in the growth that Altius experiences... I bring up Prairie Sky as an sample of someone else entering the royalty sector with large fanfare and an IPO that is buzzing...Investors love stable royalties for income and this is playing out in the media right now....with the huge multiple they command they will likely start buying up other royalties with their shares to create more cashflow for their dividends...hence growth. Buy a royalty for 15 times when you command a 30 multiple...accretive immediately. Dazel Link to comment Share on other sites More sharing options...
SharperDingaan Posted May 23, 2014 Share Posted May 23, 2014 Keep in mind that with a successful Kami announcement - much of the uncertainty goes away. There will now actually be a mine, the production is actually pre-sold, a sale of related securities, & less debt on the book. There are off-takes; & they quantify,& guarantee the Kami royalty for the life of those agreements. Assured future FCF for valuation. There will be no defence if they choose not to pay out most of their FCF in dividends. You either think this is probable or you do not. SD Link to comment Share on other sites More sharing options...
bizaro86 Posted May 23, 2014 Share Posted May 23, 2014 I agree that once ALS has a stable royalty dividend it will trade on yield, and probably around a 2-2.5% yield. It'll be interesting to me to see how much of the newly acquired cash flow they're willing to dividend out. If they go with a high payout ratio the stock may pop right away, but that hurts their flexibility to spend money on project generation going forward. If they keep more of the cash internally, there is less immediate upside, but their record is good so I'm comfortable with that as well. Bizzaro, Understood. I am simply showing royalty values...all royalties are different...but there is a bottom multiple and top multiple... Prairie Sky is going to trade on it's yield....as most royalty investors are seeking an income stream with some upside in equity. Altius does not have a dividend so this and the fact it is virtually unknown to the royalty investor community is likely why it is trading at the bottom end of the royalty multiples. When Altius initiates a dividend they will attract the largest investor group in the world which is the income investor. At that point we will get a better royalty valuation but the large upside is in the growth that Altius experiences... I bring up Prairie Sky as an sample of someone else entering the royalty sector with large fanfare and an IPO that is buzzing...Investors love stable royalties for income and this is playing out in the media right now....with the huge multiple they command they will likely start buying up other royalties with their shares to create more cashflow for their dividends...hence growth. Buy a royalty for 15 times when you command a 30 multiple...accretive immediately. Dazel Link to comment Share on other sites More sharing options...
gary17 Posted May 23, 2014 Share Posted May 23, 2014 So would the catalyst be the announcement of the second off take or financing? Which would be more definitive the mine is going, ie, pass the point of no return, thx. Keep in mind that with a successful Kami announcement - much of the uncertainty goes away. There will now actually be a mine, the production is actually pre-sold, a sale of related securities, & less debt on the book. There are off-takes; & they quantify,& guarantee the Kami royalty for the life of those agreements. Assured future FCF for valuation. There will be no defence if they choose not to pay out most of their FCF in dividends. You either think this is probable or you do not. SD Link to comment Share on other sites More sharing options...
SharperDingaan Posted May 24, 2014 Share Posted May 24, 2014 Assume that anything related to the Kami project happens together. The real catalyst will be commencement of a dividend. SD Link to comment Share on other sites More sharing options...
alertmeipp Posted May 24, 2014 Share Posted May 24, 2014 Assume that anything related to the Kami project happens together. The real catalyst will be commencement of a dividend. SD hmm...you think the stock will jump if they just give out 1-2% dividend (similar level to FNV)? and Isn't the fact that the will do a dividend already well-telegraphed? Link to comment Share on other sites More sharing options...
Guest Dazel Posted May 24, 2014 Share Posted May 24, 2014 Bizzaro, They do not spend much money at all on project generation...it would not figure into the new cashflow because it has always been more than covered off by the Voisey Bay royalty. At $20 share price a 2% yield is .40 or about $12.5 million. When Kami comes on stream the dividend will increase and the share price with it. Dazel Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now