ALS.TO - Altius Minerals

[moody202]

Coal will survive

 

http://www.bloomberg.com/news/2014-06-02/coal-seen-surving-as-efficient-power-plants-boost-demand.html

 

[alertmeipp]

Selling still heavy but we have some serious buyers today. We are back to when the deal was first announced. Now uncertainty is gone and we raised money at 14. Yet this is lower

 

[SharperDingaan]

Some of the investment houses also removed margin eligibility on June 01.

So  .... margin sellers being forced to hit the bid are now pretty much over.

 

SD

[hohi]

This is a great time to remember the phrase: Use volatility to your advantage, don't be used by it.

 

If I had some extra cash right now I would buy more, but sometimes life's just a bit** ;).

 

Keep the emotions down and focus on the big picture. The world won't stop using coal, nor iron ore, nor potash nor anything else ALS is involved in. At least not in the forseeable future. No need to panik.

[giofranchi]

This is a great time to remember the phrase: Use volatility to your advantage, don't be used by it.

 

If I had some extra cash right now I would buy more, but sometimes life's just a bit** ;).

 

Keep the emotions down and focus on the big picture. The world won't stop using coal, nor iron ore, nor potash nor anything else ALS is involved in. At least not in the forseeable future. No need to panik.

 

I have been buying each day for the last week and a half.

 

Gio

 

[SharperDingaan]

Some of the investment houses also removed margin eligibility on June 01.

So  .... margin sellers being forced to hit the bid are now pretty much over.

 

SD

 

Margin borrowing would seem to have been re-established this morning.

Hail  .... the power of the board!

 

SD

[SharperDingaan]

Date            Open   High     Low      Close   Volume  Chg      % Chg

 

06/03/2014 $12.51 $12.89 $12.30 $12.87 131,031 $0.35 2.80%

06/02/2014 $12.82 $12.82 $12.52 $12.55 86,816 -$0.28 -2.18%

05/30/2014 $13.01 $13.02 $12.75 $12.83 171,856 -$0.18 -1.38%

05/29/2014 $13.25 $13.27 $12.84 $13.01 203,174 -$0.24 -1.81%

05/28/2014 $13.54 $13.54 $13.20 $13.25 108,990 -$0.09 -0.67%

05/27/2014 $13.11 $13.43 $13.10 $13.34 99,114 $0.25 1.91%

05/26/2014 $13.02 $13.18 $13.02 $13.09 8,229 $0.00 0.00%

05/23/2014 $13.30 $13.40 $13.04 $13.09 60,370 -$0.26 -1.95%

05/22/2014 $13.15 $13.38 $13.14 $13.35 69,703 $0.23 1.75%

05/21/2014 $13.14 $13.28 $13.10 $13.12 83,240 -$0.02 -0.15%

05/20/2014 $13.45 $13.68 $13.14 $13.14 108,421 -$0.26 -1.94%

05/16/2014 $13.61 $13.70 $13.40 $13.40 45,127 -$0.19 -1.40%

05/15/2014 $13.94 $13.94 $13.59 $13.59 74,524 -$0.36 -2.58%

05/14/2014 $13.95 $13.95 $13.90 $13.95 65,444 $0.00 0.00%

05/13/2014 $13.97 $14.00 $13.90 $13.95 68,834 -$0.01 -0.04%

05/12/2014 $14.00 $14.00 $13.90 $13.96 52,780 -$0.05 -0.32%

05/09/2014 $14.08 $14.08 $13.90 $14.00 134,863 -$0.06 -0.43%

05/08/2014 $14.04 $14.08 $14.00 $14.06 59,115 -$0.02 -0.14%

05/07/2014 $14.05 $14.17 $14.00 $14.08 71,213 $0.03 0.21%

05/06/2014 $14.35 $14.38 $13.99 $14.05 234,905 -$0.30 -2.09%

05/05/2014 $14.40 $14.40 $14.30 $14.35 95,725 -$0.05 -0.35%

05/02/2014 $14.20 $14.49 $14.15 $14.40 129,931 $0.31 2.20%

05/01/2014 $14.15 $14.35 $14.03 $14.09 440,095 -$0.31 -2.15%

04/30/2014 $15.09 $15.60 $14.33 $14.40 397,620 -$0.69 -4.57%

04/29/2014 $16.14 $16.14 $15.00 $15.09 347,907 -$1.36 -8.27%

04/28/2014 $15.50 $16.45 $15.48 $16.45 98,223 $0.99 6.40%

                                                  3,537,568

 

 

We're getting close to 4,000,000 shares traded since the shares were offered.

 

Most would have to think there is a little accumulation going on, & that the stooges have now sold their overhang. Up 60c in 2 days.

Nice to see.

 

SD

[beerbaron]

As always volatility is great for the one that believes in it's own conviction. Added 3% to a 12% (total 15%) position at 12.92$. I sleep well at night with this one. We will see in 6 months if I was wise or a patsy.

 

BeerBaron

[alertmeipp]

As always volatility is great for the one that believes in it's own conviction. Added 3% to a 12% (total 15%) position at 12.92$. I sleep well at night with this one. We will see in 6 months if I was wise or a patsy.

 

BeerBaron

 

I am hoping in less than two months; once Kami financing is in place, the analysts can model the 25million/yr royalty into the valuation.

 

If I don't see financing in place for Kami in next couple months, I would be concerned.

[beerbaron]

As always volatility is great for the one that believes in it's own conviction. Added 3% to a 12% (total 15%) position at 12.92$. I sleep well at night with this one. We will see in 6 months if I was wise or a patsy.

 

BeerBaron

 

I am hoping in less than two months; once Kami financing is in place, the analysts can model the 25million/yr royalty into the valuation.

 

If I don't see financing in place for Kami in next couple months, I would be concerned.

 

If Kami does not get financing you don't have to be concerned, the stock will drop to 11.00$ faster then you can click the sell button.

 

Just do an odds calculations and see if losing risking 25% is worth gaining 100%+. I can live with the odds.

 

BeerBaron

[Blue Macaw]

I would be very surprised if Kami was not financed. It might be the only new mine popping up in Canada for a while but I believe it will be it. (Fire lake north and other mines might be pushed into the future). What is stressing is the kind of deal to expect. Most likely Altius will not get 2,02 (break even) for their shares but instead something around the figures we have today (1,50). It would still be beneficial to the share price that is for sure. At this stage the probability is higher for it to be financed than not and that is all that we are looking for. Higher probability....

[giofranchi]

If Kami does not get financing you don't have to be concerned, the stock will drop to 11.00$ faster then you can click the sell button.

 

Unless my estimation of NAV, that I thought was very conservative (it already considers all ALS iron-ore assets to be worth ZERO...), is instead completely wrong, I simply don’t understand an $11 share price… But, of course, anything can happen! ;)

 

Gio

 

[Aurelius]

Just do an odds calculations and see if losing risking 25% is worth gaining 100%+. I can live with the odds.

 

BeerBaron

 

Expected Value if Kami financing is a cointoss and gain/lose is 100%/-25%:

EV = 50% -12,5% = 37,5% 

 

If on the other hand Kami financing has a probability of 75% the expected value is going to be:

EV = 75% - 6.25% = 68,75%

 

(Please correct if math is off)

 

The reality obviously is more complex and has more potential outcomes.

I'm curious how people on this board rate the chances for Kami getting financing?

[beerbaron]

Just do an odds calculations and see if losing risking 25% is worth gaining 100%+. I can live with the odds.

 

BeerBaron

 

Expected Value if Kami financing is a cointoss and gain/lose is 100%/-25%:

EV = 50% -12,5% = 37,5% 

 

If on the other hand Kami financing has a probability of 75% the expected value is going to be:

EV = 75% - 6.25% = 68,75%

 

(Please correct if math is off)

 

The reality obviously is more complex and has more potential outcomes.

I'm curious how people on this board rate the chances for Kami getting financing?

 

It's basically the same math as you provided. The trick is to evaluate the odds which you obviously can't do with accuracy. Common techniques are to assign 50/50% probability to every gate in the process. So the project 2 years ago was probably a 12.5% (financing + feasibility study + environment). Today it's it's a 50% probability (financing). That's a poor model but there are no real good models to predict the future of such projects.

 

Beerbaron

 

 

[alertmeipp]

the newly elected gov seems like job and business friendly and they have setup some funds to directly benefits from the mining industry. equity stake in mining co and projects etc. wonder if kami and alderon is on this list. that might be what is causing the delay?

[Guest Dazel]

http://www.bloomberg.com/news/2014-06-06/iron-ore-posts-first-weekly-gain-in-eight-as-drop-seen-overdone.html

[gary17]

Blue - not sure if you read this but here's the bit on Snelgrove & Altius:

Overview of the Option Agreement with Altius Minerals Corporation (“Altius”)

 

The Company, through, through its 100% ownership of CIP Magnetite Ltd. (“CIP Mag”), holds an option to acquire Altius’ 100% interest in the Snelgrove Lake Project. Exercising the option to acquire a 100% interest in the Snelgrove Lake Project is subject to completion of the following:

 

C$6.5 million in exploration spending on the Snelgrove Lake Project by September 2017 (C$6.1 million in exploration expenditures have been incurred by October 31, 2013)

A$5.75 million option payment to Altius to be paid three months following the exercise of the option to acquire the Snelgrove Lake Project

Granting of a 3% royalty on gross revenues from the Snelgrove Lake Project to Altius

http://www.championiron.com/projects/newfoundland-labrador-projects/snelgrove-lake-project/

 

has anyone looked at other iron ore miners in the region such as Labrador Iron Mines - CEO on bnn saying costs are high.. http://watch.bnn.ca/#clip1070184

 

Why would Kami & JL be different given they are in the same region, facing similar quality ores and transportation logistics and taxes.

 

thanks

Gary

 

 

Ok, we knew there would be dilution. At least I did. When they announced they would buy the second half of CDP we knew they needed to raise cash. Not to pay for the CDP really because they could have done that with selling VM and Callinan but because they needed to strengthen their balance sheet. The problem with the way they did was not to agree on a fixed price. Market hates that. Is it going to be 10 or 15? So what we are seeing is some frustration and some hedging. Since they don´t know the price people prefer to enter when the market has cooled down. So from volume and how much it has gone down these 2 last days I think we will see share values around 13,8 plus minus a bit. At this point or around you can enter safely.

 

What Altius is not marketing is what value Callinan and Virginia Mines give to Altius.

 

Callinan in fact give 2,9 M*0,08(dividend) =0,23 MCAD a year (additional royalty from the 777 mine) and Virginia will start to give them from Q4 2014 (yes this year) 0,022*300,000*price of once gold*0,08 (8% of company) =0,68 M a year (first year), 0,022*600,000*price of once gold*0,08 = 1,3 M (second year) and so with an increase in % up to 3,5%.Maximum per year would then be with a gold price of 1300USD/ounce = 0,035*600,000*1300*0,08 = 2,2 M a year

 

Their new fact sheet that is out is not bad, not bad at all actually. They have lessen the risk of just leaning on Kami by this deal. It is just great. Keep in mind, kami is still in the ball game eventhough it might be delayed a bit (nothing unusual). As soon as financing is done and a set target is agreed on when it can start to produce then everything else will be forgotten. People even forgot what they did yesterday...New things on the fact sheet is royalty on Snelgrove lake for Champion and that they are actually showing 3 % royalty on the Rio Tinto property. The still have 5 million shares of Century iron mines and 17 million options in Champion which I need to study more.

 

Keep your heads straight. There is a lot of value in this company and share price will be higher by year end. CDP for me is the start of a new era of releasing royalties deals like they have done in labrador. Coal is not out as a commodity quite the opposite. We will see deals here in the future.

[Guest Dazel]

 

Yes of course we have looked at Labrador iron mines...

It does not have scale because it is small seasonal miner with old scattered mines all over the place. There is no reason for them to have scale because they do not have large resources in one spot.

 

Kami and JL are massive resources in one spot...so you build a large mine that becomes scalable and it brings down costs like carol lake at IOC.

 

[Guest Dazel]

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/quebec-gives-up-to-20-million-for-mine-railway-feasibility-study/article19046232/

 

 

 

[Guest Dazel]

http://www.marketwatch.com/story/china-exports-up-7-on-year-2014-06-08?link=MW_latest_news

 

Add another $35 billion to China's trade surplus! When is the last time the U.S had a trade surplus?

 

Who is the super power? And who is crashing? I think Jim Rogers is on to something....

[wachtwoord]

Looks like there is an analyst report out now: http://blogs.wsj.com/canadarealtime/2014/05/27/canada-stocks-to-watch-scotiabank-altius-open-text-lightstream/

 

C$19.50 target by Raymond James.

 

If anyone can post that report, I'd be curious to see what they have to say. Thanks.

 

Here

 

Can someone help me here because I'm probably missing something small. They base their valuation on 70% 13.0 times their 2015 CF and 30% on 1.3 times NAV. With the NAV at 19.64 and their fair price at 19.5 we arrive at 19.44 for 13.0 times CF at the end of 2015.

 

With 33.3M shares fully diluted we arrive at a market cap at their fair value of:

19.44*33.3M shares = 650M

 

Which implies a CF flow of 650/13 = 50 M at the end of 2015.

 

But in the document they don't speak of cash flows anywhere near this high! They speak of 9.7M in 2015F which at 13.0 times CF would imply a market cap of 126M and a price per share of 3.79.

 

Could someone enlighten me what I'm doing wrong because it seems I'm not following their logic at all.

 

Secondly in exhibit 13 they claim this figure shows ALS.To is the cheapest of it's peers. While this is true on a P/NAV basis they are by far the most expensive on a P/CF (2014-2015) basis. Could someone comment on this?

[Guest Dazel]

 

 

The Raymond James report is poorly done.

 

 

[Guest Dazel]

http://www.bloomberg.com/video/india-s-growth-could-pass-china-under-modi-o-neill-Sk35MmLjRty1mBb9M6WHbw.html

 

This is A pretty good interview on China's economic situation as it is first hand of O'Neil dealing with Chinese businessmen and their views of what is happening there. O'Neil sees signs of stability and likes what is happening in India.

[wachtwoord]

 

 

The Raymond James report is poorly done.

 

Ok then let me ask you this: how do you value this? If the cash flow in 2015F is only $10M it seems silly to base the valuation on this as a huge amount of growth must be implied to warrant even today's price.

 

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.

 

The above implies Altius is receiving 33.2M * 16.5/17 = 32.2 M in royalty income (33.2 M fully diluted shares and a 16.50 price at 17 times the royalty income). However I cannot find this number anywhere and numbers I'm looking at are much lower. How much do royalty income and cash flow differ? I would expect not much for a royalty company but 32M is much much higher than the 9.7M predicted for 2015F in the report I quoted above.

 

What are the right numbers I should be looking at?

[Guest Dazel]

 

Watchword,

 

Cash flow annualized now is almost twice the $10m number....