Guest Dazel Posted June 9, 2014 Share Posted June 9, 2014 I would expect Altius to address the botched Raymond James report with something in a presentation that explains cashflow better. If not earnings reports will... Link to comment Share on other sites More sharing options...
wachtwoord Posted June 9, 2014 Share Posted June 9, 2014 I would expect Altius to address the botched Raymond James report with something in a presentation that explains cashflow better. If not earnings reports will... I have checked the presentation and the yearly report but I think it's all outdated. I mean, the yearly report doesn't even mention the $120M debt yet that I've seen referred in this thread numerous times (and which is also not reflection in Yahoo finance which states zero debt). What is the origin of the figure you quote? ($20M in CF yearly). Why does the report I linked to report a much lower number? As I see it this is mostly a royalty investment now. For me to be able to put some sort of value on it, I'll need an overview of the current and future royalties (which should be very predictable). Link to comment Share on other sites More sharing options...
Guest Dazel Posted June 9, 2014 Share Posted June 9, 2014 The RJ report uses $20m ebitda for 2015. Ebitda is around $32m annualized back out your numbers... Link to comment Share on other sites More sharing options...
Blue Macaw Posted June 9, 2014 Share Posted June 9, 2014 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. Yes Dazel is right, at these iron ore prices we will not see these mines which are low scale and far from infrastructure. There are only 3 mines that I can see developed around these prices and those are Kami, Fire lake north and Julienne lake. Kami might be on track for 2016, fire lake north 2018 and Julienne lake 2020. Century iron ore has some ok mines that could get started but they are very low in scale (which they are promoting as bite size mines) and quite far from infrastructure which means the first mine out , Joyce lake (1-2 million tons per year) will just be paying for infrastructure for the next mine thus not very profitable. Century iron has however the sunny lake which would produce around 100 million tons per year. To develop that we are probably looking into 2030. Anyone who knows if more mines are going the same path as Wabush? And I mean in the near term of course..... Link to comment Share on other sites More sharing options...
Blue Macaw Posted June 9, 2014 Share Posted June 9, 2014 So the owner structure of Century iron mines: Founding shareholders 34,1 % Wisco (Wuhan steel) 23,5 % Management 17,7% Altius Minerals 5,1 % MinMetals 4,7 % Others 14,9 % Not bad Link to comment Share on other sites More sharing options...
gordoffh Posted June 9, 2014 Share Posted June 9, 2014 interesting read http://davidstockmanscontracorner.com/canary-in-the-iron-ore-pits-prices-plunge-below-100-massive-glut-building/ Link to comment Share on other sites More sharing options...
wachtwoord Posted June 9, 2014 Share Posted June 9, 2014 I have read the last 150 pages of this topic and have initiated a position today. Thanks everyone for contributing :) Link to comment Share on other sites More sharing options...
Blue Macaw Posted June 9, 2014 Share Posted June 9, 2014 Yes we are living in a Ponzi scheme that is for sure and it will hit most of us by force. But not yet. If China goes down the least to worry about will be the price of iron ore. The surplus that China has needs to go into something and they are building their country with speed that the Europeans and partly Americans cannot believe. When it takes years and years to approve things in Europe the Chinese have already built it. They are hungry to a degree we have not seen since the Americans. People in Europe only want to work 30 hour work week, have 5-6 weeks of vacation etc etc. Link to comment Share on other sites More sharing options...
Liberty Posted June 9, 2014 Share Posted June 9, 2014 Sometimes I wonder if China was actually 13 different 100-million-population countries (13 Philippines? or maybe 4 United States?) if people would be less worried. Maybe the scale would be more apparent that way? Not that I have any idea if they're going to power through or crash and burn any time soon... If I had to venture a guess: The situation in China for many decades in the 20th century was them being held back by communism, and what we're seeing now is the reversion to the mean. Reversion to the mean isn't them going back to abject poverty. Though it doesn't mean they haven't overshot... Who knows. Link to comment Share on other sites More sharing options...
SharperDingaan Posted June 10, 2014 Share Posted June 10, 2014 We see zero difference between petro $ recycling in the ME, Germany's vendor financing in the EU, & China's infrastructure build-up. They are just different manifestations of the same thing. The world buys ME oil, & the ME buys weapons & protection to recycle the money. Southern Europe buys Germany's goods & Germany hires guest workers from Southern Europe to recycle the money. The West buys Chinese goods & China buys up the West's mineral reserves & resources to recycle the money. In all cases the seller is simply trying to reduce the size of their foreign reserves - the debt of the buyer. Steel making infrastructure is no different to cell phones. You may have 2 functioning cell phones - a 3G, & 5G; but we put it to you that you rarely use the 3G, have it primarily for back-up - & because it is not easily disposable. I have many good & sh1te functioning steel plants; I rarely use the sh1te ones & keep them primarily for back-up; & it is cheaper to abandon than level them. Huge capacity, but much of it useless. To believe the overcapacity story, is to argue that China is very good at exporting, & incredibly stupid at capital investment. One of the longest lasting civilizations in the world has apparently not learnt anything along the way, & the party has zero control over what happens in China. Simply because the Western view could not possible be wrong .... ..... There isn't going to be a crash & burn anytime soon. SD Link to comment Share on other sites More sharing options...
Guest Dazel Posted June 10, 2014 Share Posted June 10, 2014 http://www.businessweek.com/news/2014-06-09/scientist-running-uralkali-seeks-to-prevent-drop-in-potash-price Looks good for our Potash royalties. Link to comment Share on other sites More sharing options...
nostradamus Posted June 10, 2014 Share Posted June 10, 2014 Altius put some more information up on their website a couple of days ago regarding their Chile exploration alliance. Not much information at the moment, but it seems like they are making good progress: http://altiusminerals.com/projects/morsas (I really love the photos they put on their website...) N. Link to comment Share on other sites More sharing options...
Blue Macaw Posted June 10, 2014 Share Posted June 10, 2014 Altius put some more information up on their website a couple of days ago regarding their Chile exploration alliance. Not much information at the moment, but it seems like they are making good progress: http://altiusminerals.com/projects/morsas (I really love the photos they put on their website...) N. Very nice to see a new project in the "seeking partner" category. Soon there will be more from CDP Link to comment Share on other sites More sharing options...
zippy1 Posted June 11, 2014 Share Posted June 11, 2014 Alderon Signs Life Cycle Services Agreement with Metso http://finance.yahoo.com/news/alderon-signs-life-cycle-services-103000317.html VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jun 11, 2014) - Alderon Iron Ore Corp. (ADV.TO) (NYSE MKT:AXX) ("Alderon" or the "Company") is pleased to announce that The Kami Mine Limited Partnership ("Kami LP"), an affiliate of Alderon, has signed a Life Cycle Services Agreement (the "Agreement") with Metso Minerals Canada, Inc. ("Metso") with respect to the development of the Kami Iron Ore Project ("Kami Project") located in western Labrador. Metso is a leading provider of equipment and services for the mining industry and are currently the supplier of the Kami Project's most significant equipment including the AG Mill, Ball Mill, Car Dumper and the Primary Gyratory Crusher. The Company has now also selected Metso to provide ongoing maintenance services with respect to all the equipment in the processing area. Link to comment Share on other sites More sharing options...
alertmeipp Posted June 12, 2014 Share Posted June 12, 2014 i would expect this to back up to at least 14 after the financing. Such a dragger. Link to comment Share on other sites More sharing options...
investor-man Posted June 12, 2014 Share Posted June 12, 2014 Altius Announces Appointment of John Baker to Executive Chairman http://finance.yahoo.com/news/altius-announces-appointment-john-baker-110000091.html Link to comment Share on other sites More sharing options...
Liberty Posted June 12, 2014 Share Posted June 12, 2014 http://www.mining.com/bhp-admits-mistakes-in-its-china-iron-ore-strategy-12893/ Link to comment Share on other sites More sharing options...
alertmeipp Posted June 12, 2014 Share Posted June 12, 2014 Altius Announces Appointment of John Baker to Executive Chairman http://finance.yahoo.com/news/altius-announces-appointment-john-baker-110000091.html Executive Chairman - interesting.. any idea how they split the responsibilities between John and Brian? Seems lots of deal discussion going on... Link to comment Share on other sites More sharing options...
netnet Posted June 13, 2014 Share Posted June 13, 2014 Portfolio question: Is this the top name in your portfolio and what is the relative size? For example, in individual portfolios what % of your portfolio are you comfortable for this name? If you don't want to publicize relative size, i.e. 20%, would you say this a top name in your portfolio? From where I sit, in an individual, concentrated portfolio, I could see a 25% position, much like Buffet who I believe had 25% in AmEx back in his salad (oil) days. For me, it is my top name and I'm topping out 20% in my personal account, but it is unlevered, because, I don't do leverage AND if Kami is not financed it may drop 20%. If Kami is not financed, I will probably go in for another 5%. (Although this is irrational, I should just take the expected value on a 50/50 probability and buy more now.) Contrast this with the BH investor (Kirkpatrick I think) who when he discovered BH and Buffett, margined with this as his only name. (I would NOT do that! even in 1960 with Buffett.) Link to comment Share on other sites More sharing options...
bizaro86 Posted June 13, 2014 Share Posted June 13, 2014 Netnet, That's a great discussion to be having! I think ALS is quite different from Amex, which had a branded moat business in a secularly growing area. ALS is more of a optionality play, in my opinion. As an example, from their most recent financials: a – Natashquan River On July 25, 2013, the Corporation announced an earn in and royalty agreement with Anglo American to explore the Natashquan nickel/copper PGe property. Under the terms of the agreement, Anglo American may earn 66% of the property by investing $20,000,000 in exploration expenditures over a five year period. Altius will also retain a 1% net smelter return royalty on the property upon formation of the joint venture. Altius has a 500k cost basis in this property, and they've convinced a big mining company with smart geologists to spend $20MM developing it. If it works out, they'll have a valuable working interest and net smelter royalty. If it doesn't, they're out the 500 grand, which isn't exactly a big deal. I look at Altius more like a portfolio manager than a traditional company, which makes it harder to value. However, I really like the economics of optionality, it reminds me of Taleb's antifragile theory. Essentially, ALS is benefiting from volatility in mineral prices and deposit sizes. It actually also reminds of the Dhando investor (heads I win, tails I don't lose much). All this is a long way of saying I really like the company, but don't see a huge margin of safety in the traditional sense. If you run a worst case scenario on the company the value is lower than the current price. If you run a best case scenario it's pretty easy to get share prices >$30. You need something good to happen for this to work out (Ie Kami gets financed/built, or one of their other irons in the fire works out). It's one of my larger positions (top 5), but my portfolio isn't especially concentrated right now, as I've got a basket of net-nets and a few other things like that. (liquidations, merger arb, etc) Link to comment Share on other sites More sharing options...
SharperDingaan Posted June 14, 2014 Share Posted June 14, 2014 Keep in mind that money is the servant, not the master. So .... think in terms of what the investment is for, & the risks you are taking to achieve that - versus portfolio weighting. For most people, if a win means a modest down payment on a house; the weighting could be fairly small. If it means full repayment of a mortgage, it needs to be something bigger. Part of the equation is whether you need 2x, or 4x your investment, likelihood of occurrence, & how long a wait. If time is your friend (investing for retirement), you rely primarily on process & continual improvement over the years (boards like this). If your horizon is shorter, you need company specific events, with above average odds of occurrence. The punch-card analogy emphasizes that over a lifetime there will be few outstanding opportunities, so use them when you see them. Everybody will have their own assessment, & it will depend very much on what he/she does for a living. Within 2 weeks - the wait should be pretty much over. SD Link to comment Share on other sites More sharing options...
alertmeipp Posted June 14, 2014 Share Posted June 14, 2014 >> Within 2 weeks - the wait should be pretty much over. You think we will hear about Kami's financing by end of June? Link to comment Share on other sites More sharing options...
giofranchi Posted June 14, 2014 Share Posted June 14, 2014 It is almost a 12% position for me. I will resume gradually buying below $12.5, with the goal of making this a 15% position. In my NAV calculation I assumed all their iron-ore related assets to be worthless… Is there someone who doesn’t agree that is a worst case scenario?! ??? And yet I still get an undervalued share price… So, clearly there must be something I am missing here, or that I don’t understand… the share price behavior is just too baffling… and I won’t push it beyond a 15% position. Gio Link to comment Share on other sites More sharing options...
peter1234 Posted June 14, 2014 Share Posted June 14, 2014 Right or wrong, I think ALS might just react to underlying commodity pricing. For iron ore, compare ALS with Fortescue and you will see similar YTD performance. You can probably build a customized commodity basket of companies approximating ALS' interests in the different commodities. You might find that this basket correlates strongly with ALS. Not saying that Mr. Market values it the right way. Just offering an idea as to why ALS is behaving the way it does. ;) Link to comment Share on other sites More sharing options...
giofranchi Posted June 14, 2014 Share Posted June 14, 2014 Not saying that Mr. Market values it the right way. Just offering an idea as to why ALS is behaving the way it does. ;) Thank you! :) That, of course, makes sense… it doesn’t solve my problem though! ALS is becoming a royalty company, and the cash flow from many of those royalties is not tied to commodity prices… yet the market goes on correlating commodity prices with ALS? Why? The market isn’t stupid! What am I missing? ??? Gio Link to comment Share on other sites More sharing options...
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