ALS.TO - Altius Minerals

[giofranchi]

They don't get to choose whether the deposits they find are low-cost or not.  In mineral exploration, sometimes people go looking for one thing and find another. 

 

Yeah! Of course! All I am saying is, when a smart guy doesn’t find what he was looking for, he usually cuts his losses short and looks somewhere else, for some other opportunities! And a PG that is good at its business should know this better than almost anyone else! Therefore, why to stick with Kami, once the evidence has proved it is not what you were looking for? Or, worse yet, it is not even profitable? If you find something different from what you were expecting, but it might be still be profitable, well that’s fine! Keep on working on that project, even if it has become somewhat different from what you thought in the beginning… But to go on working on something destined to be unprofitable?! I am not saying it doesn’t happen all the time… I am only saying this kind of mistake and the idea an entrepreneur is in the 99th percentile don’t go along together well.

 

Dalton doesn't have the luxury of being discriminating in choosing who he "sells" his prospects to.  (Altius actually enters into joint venture agreements.)

 

Do you mean that ALS owns 20% of ADV, but cannot change ADV’s management if Mr. Dalton thinks they are lying? It might be… but surely it sounds strange!

 

Gio

[jouni1]

there might be more interesting/rewarding jobs for honest and capable executives. i believe the original thesis was that dalton is a rare gem in the junior mining world, as far as ethics etc go. alderon etc don't strike me as the dream employer of a seasoned mining exec.

 

so to stay in business he probably has to work with shady people in sometimes probably shady ways. i think this has been proven in the presentations that almost always make things seem better than a thorough inspection of the facts.

 

let's just hope he can keep the crooks in line.  ;D

[giofranchi]

let's just hope he can keep the crooks in line.  ;D

 

Can someone please explain with very simple words what management thinks ADV could achieve in the end by lying?

Thank you,

 

Gio

 

PS

Don’t tell me a transfer of money from gullible financiers to crooked managers… because that is a fraud! If ADV is a fraud, ALS is 20% responsible of a fraud. If you are 20% responsible of a fraud, you are a 100% fraud yourself…

Lacking another example in ALS’s history of enriching themselves at the expense of gullible financiers, read another fraud, why should ALS have become a fraud all of a sudden?!

[jouni1]

i think the best thing for altius right now is to get the mines built, even if they can't produce at profitable levels. once they're built, someone will keep producing if the prices go up and the royalties are there to stay. so it might make sense to give too positive estimates right now.

 

i have no idea what anyone expects to gain by being dishonest. short-term personal gain perhaps. i haven't seen many honest managers in junior mining. also in mining it's not called fraud, it's overestimation of reserves and underestimation of costs :D

 

i guess this(people's attitudes towards junior mining) is probably the main reason the stock is still cheap. the business model is great and in the end i think dalton will be great for owners. i wasn't trying to say als is a fraud, but that it might be hard or even impossible to partner with honest people if your industry is junior mining.

[Blue Macaw]

I doubt they are a fraud, neither Altius nor Alderon. Sometimes managers believe in a thing so much they don´t see the negative. (including investors) I left a company (2 years ago) with a boss that was like that. He could not see reality. He was no fraud though he just had a very "positive" approach to our business and believed we were so much better than our competitors. It happens everyday, all the time all over the world in every company at some level (departments, projects).

 

I doubt they are really trying to fool us. I doubt it very much. They are just pushing for something they believe in. It happens that the negotiations come at a time when iron ore prices are pushed down and the Chinese are sitting on the top card. Altius and Alderon should have taken another approach if you look back at the whole thing. They thought they had the top card but it turned around a bit like volkswagen and porsche deal.

 

It ain´t over yet though. We will see a deal but a deal that is less profitable for alderon and somewhat Altius (equity wise)

[giofranchi]

It ain´t over yet though. We will see a deal but a deal that is less profitable for alderon and somewhat Altius (equity wise)

 

To tell the truth, I am not worried at all about how much profitable the deal for ALS will be: if I am not mistaken, ALS invested little more than $2 million in 2004 to develop the Kami project… If a deal materializes, whatever its terms might be, ALS will see a spectacular return on the capital invested, and also their subsequent efforts will be spectacularly rewarded! We just need a deal, what kind of deal imo is much less relevant.

 

Instead, I don’t like to think that ALS in its PG business is somehow "forced" to deal with "shady people", like jouni1 has suggested… it is something I hadn’t thought about and is news (actually, bad news!) to me… it’s just something that I had missed. Simple as that! And would appreciate very much to hear what other board members think about it.

 

Gio

 

[wachtwoord]

It ain´t over yet though. We will see a deal but a deal that is less profitable for alderon and somewhat Altius (equity wise)

 

To tell the truth, I am not worried at all about how much profitable the deal for ALS will be: if I am not mistaken, ALS invested little more than $2 million in 2004 to develop the Kami project… If a deal materializes, whatever its terms might be, ALS will see a spectacular return on the capital invested, and also their subsequent efforts will be spectacularly rewarded! We just need a deal, what kind of deal imo is much less relevant.

 

Instead, I don’t like to think that ALS in its PG business is somehow "forced" to deal with "shady people", like jouni1 has suggested… it is something I hadn’t thought about and is news (actually, bad news!) to me… it’s just something that I had missed. Simple as that! And would appreciate very much to hear what other board members think about it.

 

Gio

 

Well to be fair $2M is not the amount to calculate returns on. ALS makes many small investments and some pay big. If we only calculate returns on successful investments we are deluding ourselves.

[giofranchi]

Well to be fair $2M is not the amount to calculate returns on. ALS makes many small investments and some pay big. If we only calculate returns on successful investments we are deluding ourselves.

 

Ok, you are right! It is still the second part of my last post, the one in bold type, that bothers me the most…

 

Gio

 

[wachtwoord]

Well to be fair $2M is not the amount to calculate returns on. ALS makes many small investments and some pay big. If we only calculate returns on successful investments we are deluding ourselves.

 

Ok, you are right! It is still the second part of my last post, the one in bold type, that bothers me the most…

 

Gio

 

I'm not sure. I liked your extremely conservative NAV calculation on page 308 a lot and started a position slightly below 13 CAD. I also like their  business model where they let others make the high investments. Scalable businesses with low capital requirements that strive towards acquiring long lasting and steady royalties are nice in my book :)

 

About trustign mr. Dalton: sometimes people screw you over but that's not restricted to small companies. Just look at Michael Dell who took the company under at a depressed price this year. Yeah I made money but my shares were worth much more than what he paid me for it. Avoiding being overly focused is the only true protection from this. If others have good insights I'm al ears though :)

[SharperDingaan]

Let's say that in the best case Kami and JL financing is secured on favorable terms and ALS is at CAD 20 in 12 months' time - this would give a person investing at CAD 12.42 a 61% return - most definitely a juicy return (unless you are Packer or Eric, that is) .. but what if it nothing happens with Kami or JL and there are no new royalty streams in the next 3 years?

 

ALS has 20M in FCF & another meeting on/about Jul-04. A dividend payout ratio at 65%, discounted at 2%, may well get us there a lot quicker than most people seem to think. ALS also has other projects beyond Kami & JL, some of which are also about to start generating FCF.

 

SD

[giofranchi]

I'm not sure. I liked your extremely conservative NAV calculation on page 308 a lot and started a position slightly below 13 CAD. I also like their  business model where they let others make the high investments. Scalable businesses with low capital requirements that strive towards acquiring long lasting and steady royalties are nice in my book :)

 

About trustign mr. Dalton: sometimes people screw you over but that's not restricted to small companies. Just look at Michael Dell who took the company under at a depressed price this year. Yeah I made money but my shares were worth much more than what he paid me for it. Avoiding being overly focused is the only true protection from this. If others have good insights I'm al ears though :)

 

I think jouni1 said something a bit different: no matter how much reliable and trustful Mr. Dalton really is, he will be forced to deal with shady people nonetheless… because that’s just how it is, when you generate new projects in the mining industry!

This imo adds a layer of risk to ALS business model I hadn’t thought about until now.

 

Gio

 

[SharperDingaan]

OK - some folks have been burnt on juniors; we get it.

Everyone is entitled to their opinion - whether or not others find it rational.

 

Apparently there is no possibility that ADV may also be negotiating with a 3rd party on a related event ? Apparently there is no possibility that the Chinese funds (via the sale of Kami) may be used to back the acquisition of somebody else, with another Chinese funded off-take to put the target into production ? Apparently the additions to the ADV board, & the institutional involvement, are just there for fun & to fill vacant seats - with zero influence/involvement ?

 

We would prefer there be two separate announcements, Kami first ..... and a separate announcement on whatever ADV has decided at the Jul-29 meeting. They may well be related; but they are two separate & material transactions - not one. A delay will also affect ALS's ability to market its shares, as in abundantly clear from this boards reaction.

 

If you feel that concerned about it, sell your shares; we have a market for ADV.

But don't come back whining if it didn't go the way you thought.

 

SD

 

 

 

 

 

 

 

[wachtwoord]

I'm not sure. I liked your extremely conservative NAV calculation on page 308 a lot and started a position slightly below 13 CAD. I also like their  business model where they let others make the high investments. Scalable businesses with low capital requirements that strive towards acquiring long lasting and steady royalties are nice in my book :)

 

About trustign mr. Dalton: sometimes people screw you over but that's not restricted to small companies. Just look at Michael Dell who took the company under at a depressed price this year. Yeah I made money but my shares were worth much more than what he paid me for it. Avoiding being overly focused is the only true protection from this. If others have good insights I'm al ears though :)

 

I think jouni1 said something a bit different: no matter how much reliable and trustful Mr. Dalton really is, he will be forced to deal with shady people nonetheless… because that’s just how it is, when you generate new projects in the mining industry!

This imo adds a layer of risk to ALS business model I hadn’t thought about until now.

 

Gio

 

True, but if he's a solid entrepreneur in this industry he should be able to handle this better than his competitors in general. It's possible to deal with shady people, you'll need to (be able to) build in some safeguards though.

[ItsAValueTrap]

I'm not sure. I liked your extremely conservative NAV calculation on page 308 a lot and started a position slightly below 13 CAD. I also like their  business model where they let others make the high investments. Scalable businesses with low capital requirements that strive towards acquiring long lasting and steady royalties are nice in my book :)

 

About trustign mr. Dalton: sometimes people screw you over but that's not restricted to small companies. Just look at Michael Dell who took the company under at a depressed price this year. Yeah I made money but my shares were worth much more than what he paid me for it. Avoiding being overly focused is the only true protection from this. If others have good insights I'm al ears though :)

 

I think jouni1 said something a bit different: no matter how much reliable and trustful Mr. Dalton really is, he will be forced to deal with shady people nonetheless… because that’s just how it is, when you generate new projects in the mining industry!

This imo adds a layer of risk to ALS business model I hadn’t thought about until now.

 

Gio

 

I'm not sure that you should be concerned about that.  I don't see anything inherently unethical with "selling" something to unethical people.  (Altius technically does joint ventures.  It doesn't exactly sell its prospects to other companies.)

 

However, Altius does have two seats on Alderon's board.  As mentioned before:

A- Salaries are much higher at Alderon than at Altius.  Dalton may be getting paid more working part-time for Alderon than he does working full-time for Altius.

B- Dalton probably knows that Alderon is spending money on related party transactions, corporate aircraft, paid stock promotion, etc. etc.

 

To some degree, Dalton should not rock the boat because it will affect Altius' ability to sell its prospects to other shady juniors.

 

It's complicated???

 

2- The prospect generator side of Altius has made a killing, even though it hasn't found a single deposit that has turned into a profitable mine.  So what they are doing has worked incredibly well in this commodities bull market.

 

And I think Dalton deserves credit for sitting on cash in 2011, at the top of the cycle.

[sys]

I think jouni1 said something a bit different: no matter how much reliable and trustful Mr. Dalton really is, he will be forced to deal with shady people nonetheless… because that’s just how it is, when you generate new projects in the mining industry!

 

that's actually the entire reason i am invested in als.  if i'm going to invest in junior resource companies, i want someone smarter and more knowledgeable than myself filtering the wheat from the chaff.

[Max Alpha]

I think people have gotten a bit carried away here.

 

The iron ore price has come off significantly so a delay in financing the deal should not be a huge surprise. It is only a particularly big issue if you entered the position as more of a catalyst driven short term investment as opposed to a long term bet on Altius' ability to cheaply generate royalty stakes and a contrarian play on commodities that are particularly disliked at the moment.

 

The talk about ethics and fraud strike me as a bit premature and unnecessary. The junior miner area is inherently speculative and full of spruiksters but surely that is the part of the reason it has such a modest valuation. The upshot being the fact that Altius is not a traditional junior miner, it doesn't have all its eggs in one basket, and it is far less exposed to the economics of the underlying mines. It already has tangible cash flow and a track record of generating value.

 

It would be nice to see an iron ore price rebound above $100 and a financing deal as a catalyst in the short term, but if that doesn't eventuate i don't really think too much has changed in the long run. 

[lessthaniv]

X2

 

 

[Guest Dazel]

 

Wow pretty good blow out on this thread....my thesis has not changed. There is value and opportunity in Altius.

 

 

Dazel.

[frommi]

ALS has 20M in FCF & another meeting on/about Jul-04. A dividend payout ratio at 65%, discounted at 2%, may well get us there a lot quicker than most people seem to think. ALS also has other projects beyond Kami & JL, some of which are also about to start generating FCF.

 

SD

 

But why should ALS initiate a dividend other than to short term boost their stock price? There should be plenty of opportunities in the resource sector to spend money on.

[Eric50]

All,

 

I'm updating my estimate/model from a couple of years ago. ALS owned 529k shares of Royal Gold (RGLD) and 7932k shares of Millrock Resources (MRO.V). I can't find anything in the latest financial statements... Do you know if they still own those? Have they sold them?

 

Thanks,

Eric

[giofranchi]

I'm not sure that you should be concerned about that.  I don't see anything inherently unethical with "selling" something to unethical people.  (Altius technically does joint ventures.  It doesn't exactly sell its prospects to other companies.)

 

However, Altius does have two seats on Alderon's board.  As mentioned before:

A- Salaries are much higher at Alderon than at Altius.  Dalton may be getting paid more working part-time for Alderon than he does working full-time for Altius.

B- Dalton probably knows that Alderon is spending money on related party transactions, corporate aircraft, paid stock promotion, etc. etc.

 

To some degree, Dalton should not rock the boat because it will affect Altius' ability to sell its prospects to other shady juniors.

 

It's complicated???

 

2- The prospect generator side of Altius has made a killing, even though it hasn't found a single deposit that has turned into a profitable mine.  So what they are doing has worked incredibly well in this commodities bull market.

 

And I think Dalton deserves credit for sitting on cash in 2011, at the top of the cycle.

 

Well, either it is complicated… or I am too stupid to understand! Probably, the latter… Therefore, please explain:

 

You are saying that ALS PG business model is to discover UNPROFITABLE mines, and to book a big gain thanks to the fact it does joint ventures with SHADY people, who then publish presentations through which they make the public believe those mines, if built, might be very profitable instead?!

And you are saying I shouldn’t be concerned about that?!

 

Dazel,

please, could you let me know what you think about this? It’s paramount to me: does ALS deal with ethical people? If your answer is yes, why does ADV’s management insist on saying Kami's cost of production will be around $43 per ton? Why do they insist on saying Kami’s iron ore concentrate is among the best in the world, if it is not so?

 

Thank you very much as usual! :)

 

Gio

 

[giofranchi]

Truth be told, lying is the worst of vices. We are but humans and we can trust each other only through our own words. If we knew the true horror and the true weight of lying, we would send it to the stake with more resoluteness than any other crime.

--Michel De Montaigne, Complete Essays

 

 

Gio

 

[Guest Dazel]

 

Royal Gold was sold...the majority of mill rock was sold at aroumd 80 cents they bought back a position below 10 cents....

The large holding of Virginia mines is interesting as gold has jumped higher recently. Osisko gold royalty is worth $750m....making the Eloenore royalty very interesting.

 

 

 

[Guest Dazel]

http://www.watoday.com.au/business/china/china-pmi-shows-first-expansion-in-six-months-20140623-3antc.html

 

[giofranchi]

 

Royal Gold was sold...the majority of mill rock was sold at aroumd 80 cents they bought back a position below 10 cents....

The large holding of Virginia mines is interesting as gold has jumped higher recently. Osisko gold royalty is worth $750m....making the Eloenore royalty very interesting.

 

Dazel,

I have no doubt the portfolio of royalties part of ALS business is just great! That’s the reason I became interested in ALS in the first place.

Instead, I have asked your view on the PG part of ALS business: won’t you please answer my question and tell us what you think about it?

I would like to know your thoughts and the reasons behind them, before adding more today. :)

 

Cheers,

 

Gio