alertmeipp Posted April 30, 2014 Share Posted April 30, 2014 The prediction was actually off by some. You will be able to buy some for 13.7-13.8 next week. That buy will however be a very good entrance point again. We now know the lowest value ought to be around 13.5 per share making the risk substantially lower if you could enter there. Altius will not go lower than that (or you would have a fantastic entrance point) Still standing by my other prediction of 20 CAD by year end. Are u making this call based on something or just a guess/gut feel? I added today. FWIW Link to comment Share on other sites More sharing options...
Aurelius Posted April 30, 2014 Share Posted April 30, 2014 I added as well, but clearly I'm the patsy at the poker table. Blue Macaw: I'm also curious as to why you think it will go lower? Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted May 1, 2014 Share Posted May 1, 2014 When do you guys think we will see the pricing? Anyone know why they dont do a bought deal financing. Pricing is tomorrow (April 30th). So the big guys are pushing it down a bit to get the shares cheaper tomorrow. Sad, but that's the reality of it ;). Never saw headlines for this and my Google alerts didnt give me anything either. Did this not happen? Link to comment Share on other sites More sharing options...
alertmeipp Posted May 1, 2014 Share Posted May 1, 2014 where do you guys see the pricing date? Link to comment Share on other sites More sharing options...
Guest Dazel Posted May 1, 2014 Share Posted May 1, 2014 I really did not see the stock dropping like it has...I did not think you guys would need me here as you were counting your money with Altius stock heading to $20! Hopefully no one was scared away by the investment banks and others shorting the stock to achieve "a level that might not otherwise reflect a natural price of the security in the market place....the investment banks can discontinue this practice at anytime...which may include short sales and other mechanisms to achieve an artificial price for financing with in the guidelines of the tsx" It's in the prospectus.... Great for those entering the stock or accumulating...no fun for the others! What I missed......... I sadly missed Altius CDP move...even though sometime ago I recommended that Altius look for tax assets as Leucadia did... CDP has $50m in accumulated operating losses....once again Altius is brilliant! Ian Cummings made a career out of doing this at Leucadia. I hope this is the start of a trend at Altius....it is the perfect environment for them to pick up $1 for 50 cents all over the place....the operating losses are everywhere they just need to find assets with some value to go with them....exactly like CDP! They may turn this into a 5 or 6 bagger with the tax assets included. It was the backbone of Leucadia's entire investment strategy...buy an asset that had accumulated tax loss carry forwards...turn the business around...sell some assets and cut your tax bill with the loss carry forwards...Leucadia equity at one point was 35% tax loss carry forwards. Brilliant.....Altius Brilliant. Dazel. Link to comment Share on other sites More sharing options...
Otsog Posted May 1, 2014 Share Posted May 1, 2014 P for partnership though. The tax burden/recovery always flowed straight to the partners, CDP won't have any tax assets/liabilities. Link to comment Share on other sites More sharing options...
Otsog Posted May 1, 2014 Share Posted May 1, 2014 where do you guys see the pricing date? On Sedar the 29k file titled marketing materials. The scotiabank term sheet says on or about the 30th. That's the only place I saw it. Link to comment Share on other sites More sharing options...
sarganaga Posted May 1, 2014 Share Posted May 1, 2014 If Altius acquired $50 mil in operating losses in the acquisition of CDP, that is very good ... however, this has nothing to do with the financing terms, which are pretty terrible. Aside from the fees (5% + lawyers' fees , accountants' fees & other friendly faces) there is also the dilution of the existing shareholders due to discounted share price & investment banking options. The fact that it is not a fixed price offering means that we will not know how diluted we are until we get an offering price, which could be 14, 13, 9 or whatever. I like the acquired assets quite a bit, but it remains to be seen how good a deal they are post all of the financing intrigue. Link to comment Share on other sites More sharing options...
Guest Dazel Posted May 1, 2014 Share Posted May 1, 2014 Otsog On page F-11 they show CDP as deferred tax recovery of $9,197,000...for year ended 2013....Partnership sounds correct but not sure pension funds treatment on the loss nor Sherritt because of the nature of the loss. Link to comment Share on other sites More sharing options...
Guest Dazel Posted May 1, 2014 Share Posted May 1, 2014 Sarganaga, I understand your frustration....It has been a brutal take down from pre open yesterday at $17.60. The terms look like either side can walk away.... If I were Altius I would be pissed with what has transpired....I would look at other options....they do not have to raise equity. The investment banks have not even put a report out on Altius....it has been handled terribly. Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted May 1, 2014 Share Posted May 1, 2014 If you want to be degenerate.... wait for the price to the public to be announced (the price that the underwriters' clients buy at). Stick a limit order a few cents higher than that particular price. It may or may not fill. If it fills, you hold on in the short term and let the underwriters' bull ship magic do its work. The underwriters will all use their analysts to pump the stock. If and when the stock rallies, SELL. If for some reason the stock trades at twice the secondary offering price, you must sell everything. Maybe even short the stock. The idea is that you are counting on the underwriting syndicate to support the stock. And every once in a while a secondary offering will dip below the secondary offering price (e.g. GDP). It is not a foolproof strategy. This strategy will fail in bear markets. I also don't play this game so I can't tell you if it works. And I don't know if it means anything but Jim Cramer talks about a similar strategy with hot IPOs. This is a game that trading-heavy hedge funds play. That's just how it is. 2- Altius likely did not earn brownie points with underwriters for buying back its shares. Investment banks ignore companies that buy back shares. Those companies rarely receive analyst coverage. I believe Altius used to have a lot more analyst coverage than today due to the 2007 secondary offering. In theory, you can try to buy stocks before they get covered by investment banks. If a stock has several analysts covering it, you should probably sell. (This effect is not that strong so I'm not sure I would invest based on it.) Link to comment Share on other sites More sharing options...
Guest Dazel Posted May 1, 2014 Share Posted May 1, 2014 Ostog, Obviously, brain is tired you are correct.... Link to comment Share on other sites More sharing options...
Guest Dazel Posted May 1, 2014 Share Posted May 1, 2014 Trap, Agreed...Altius is unknown and investment banks could care less....2007 offering was picked up by short sellers that got squeezed badly...Altius has never given anyone any business as they generated their cash internally. It was easy to knock down $3 bucks it will be easy to shoot it back up that way...it is a stupid way to do things but that's investment banks! Link to comment Share on other sites More sharing options...
Guest Dazel Posted May 1, 2014 Share Posted May 1, 2014 I still have not seen any analyst coverage? Has anyone else? Link to comment Share on other sites More sharing options...
sarganaga Posted May 1, 2014 Share Posted May 1, 2014 From the 4/28/14 Altius document (SEDAR Canada) • Altius is funding $283 million comprised of $241 million for 52.4% of PMRL and $42 million for 100% of CDP • The acquisition of PMRL and 50% of CDP from Sherritt will be financed by: • ~$115 million of cash and marketable securities • $140 million senior secured non-revolving credit facility provided by Sprott Resource Lending Partnership, Earlston Investment Corp. and the Chairman of Haywood Securities Inc. • $7.2 million unsecured loan provided by the chairman of Haywood Securities Inc. • The acquisition of the remaining 50% ($21 million) of CDP will be financed by the marketed equity offering of up to $65 million with the remaining funds used for: • $20 million repayment of the senior secured non-revolving credit facility • $7.2 million repayment of the unsecured loan • General corporate purposes This indicates that all of this recent market nastiness is a result of a secondary to pay for a portion of the CDP acquisition. Maybe, or perhaps probably, some of the other financing would have been more difficult if Altius didn't rollover for this, but was the acquisition of part of CDP worth it. Remember, not only is this deal compromised by the financing terms, but the existing assets/prospects are also diluted. Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted May 1, 2014 Share Posted May 1, 2014 For a blast from the past, do the following search in Google: "analyst coverage site:altiusminerals.com" In the past, it looks like Altius gave a crap about its share price. It was reposting analyst reports onto its website. (Vaguely violates copyright unless they have permission.) That's something juniors do to promote their stock. You also get to read analysts' work. Link to comment Share on other sites More sharing options...
Guest Dazel Posted May 1, 2014 Share Posted May 1, 2014 Sarganga, They have $20m cash and $100m in investments they could use to pay for CDP....the do not need the financing they are doing it to give themselves some a better capital position....anymore beatings in stock price and I would pull it and raise debt instead.... With their cashflow profile this debt market would love them.... I really have to think they thought the share offering would go smoothly...but they have pissed a lot of share holders off and made a poor decision in hindsight! Without the equity raise we are high teens.... Why did they not sell Virginia Mines at $14 in February to pay for some of this? Dazel Link to comment Share on other sites More sharing options...
Guest Dazel Posted May 1, 2014 Share Posted May 1, 2014 Trap, Have you ever heard of any company that is public that has not had analyst coverage in 7 years? not a lot of incentive for investment bankers! Dazel Link to comment Share on other sites More sharing options...
sarganaga Posted May 1, 2014 Share Posted May 1, 2014 Sarganga, They have $20m cash and $100m in investments they could use to pay for CDP....the do not need the financing they are doing it to give themselves some a better capital position....anymore beatings in stock price and I would pull it and raise debt instead.... With their cashflow profile this debt market would love them.... I really have to think they thought the share offering would go smoothly...but they have pissed a lot of share holders off and made a poor decision in hindsight! Without the equity raise we are high teens.... Why did they not sell Virginia Mines at $14 in February to pay for some of this? Dazel Then why would they go for a deal structured like this? Link to comment Share on other sites More sharing options...
Blue Macaw Posted May 1, 2014 Share Posted May 1, 2014 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. Link to comment Share on other sites More sharing options...
sarganaga Posted May 1, 2014 Share Posted May 1, 2014 Altius' assets, both existing & the new ones that are being acquired look really promising. I don't think many, if any, shareholders are questioning Altius' resource acquisition expertise. The quality/value of any of those which are obvious and others which may be not as easily discerned are not the problem. The financing terms are the type you might expect to see in a "liar standing over a hole in the ground" type finance deal. They're really bush league. Non price fixed secondaries are a license to let the underwriters abuse existing shareholders. It doesn't matter if we make money from this investment in the medium/long term or not. Why would Altius agree to a deal structured like this? Link to comment Share on other sites More sharing options...
Blue Macaw Posted May 1, 2014 Share Posted May 1, 2014 Altius' assets, both existing & the new ones that are being acquired look really promising. I don't think many, if any, shareholders are questioning Altius' resource acquisition expertise. The quality/value of any of those which are obvious and others which may be not as easily discerned are not the problem. The financing terms are the type you might expect to see in a "liar standing over a hole in the ground" type finance deal. They're really bush league. Non price fixed secondaries are a license to let the underwriters abuse existing shareholders. It doesn't matter if we make money from this investment in the medium/long term or not. Why would Altius agree to a deal structured like this? You might be right, the deal is weird and I don´t like it either. Not knowing th price is confusing and should be punished. However does it matter at this stage? It is already done, over with. Now we have to wait to 12th of may for the deal to close. Either you still like the company or you don´t. Everything that management does cannot be to perfection. I would say ALL other companies in this world make some mistakes. That is how it is. Link to comment Share on other sites More sharing options...
Blue Macaw Posted May 1, 2014 Share Posted May 1, 2014 Something like his below is what I expect in the future. Chinese entering the Canadian potash market. Western Potash Corp. Announces Closing of Strategic Investment 20/06/2013 Vancouver, June 20th, 2013 – Western Potash Corp. (“Western” or the “Company”) is pleased to confirm that the previously announced strategic investment by China BlueChemical Ltd., (“China Blue”) and Benewood Holdings Corporation (“Benewood”), through a joint venture company, CBC (Canada) Holding Corp. (“CBCHC”), has been completed (the “Transaction”). Western has issued to CBCHC approximately 45 million common shares at a price of $0.71 for proceeds of C$ 31,979,022, which represents a 19.9% ownership stake in the Company on a non-diluted basis. China Blue is a majority owned subsidiary of China National Offshore Oil Corporation (“CNOOC”) and Benewood is a wholly owned subsidiary of GUOXIN International Investment Corporation Limited (“GUOXIN”), a financial investment company registered in Hong Kong. Link to comment Share on other sites More sharing options...
Blue Macaw Posted May 1, 2014 Share Posted May 1, 2014 How would you value the 30 % stake that Altius still has at the goethite bay (apart from the royalty). It seems unlikely they would let go of more since they already have 3 % royalty there. Could that be received in cash from Rio Tinto and how much could that be worth? Link to comment Share on other sites More sharing options...
giofranchi Posted May 1, 2014 Share Posted May 1, 2014 I really have to think they thought the share offering would go smoothly...but they have pissed a lot of share holders off and made a poor decision in hindsight! Without the equity raise we are high teens.... Ok, they made a poor decision in hindsight. I agree. In my experience some bad decisions are almost inevitable… How is the quality of a business made by a talented and proven project generator (where inexpensive growth is) + a portfolio of royalties (where safe free cash flow is) affected by this poor decision? Is the management less reliable because of this poor decision? My answer to those two questions is that I added to my position yesterday and I am going to add today too. ;) Gio Link to comment Share on other sites More sharing options...
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