ALS.TO - Altius Minerals

[TwoCitiesCapital]

Gio is back, but I can't remember if that is a buy signal or a sell signal. :-)

 

Ask him if he's  buying or selling. He'll tell you getting out  before the slaughter was luck, but I know a skilled technician when I see one ;)

 

Also, iron is approaching $70. Seeking Alpha post claimed even the majors aren't profitable below $70 for a lot of their mines.  How long until they cut production as well?

[Crip1]

Gio is back, but I can't remember if that is a buy signal or a sell signal. :-)

 

Ask him if he's  buying or selling. He'll tell you getting out  before the slaughter was luck, but I know a skilled technician when I see one ;)

 

Also, iron is approaching $70. Seeking Alpha post claimed even the majors aren't profitable below $70 for a lot of their mines.  How long until they cut production as well?

 

 

Based on the 10% drop since Tuesday morning, it looks like he's buying.  ;D

 

 

-Crip

[giofranchi]

Based on the 10% drop since Tuesday morning, it looks like he's buying.  ;D

 

 

-Crip

 

Ahahah!!!!  ;)

 

But no, I am not buying yet. I think it will take a while for my thesis about LMCA and LBRDA to play itself out… longer than I had thought... if it will ever play itself out!... Therefore, my money is still in LMCA and LBRDA.

 

Gio

 

[Crip1]

Any ideas why ALS is up 4-6%, depending on which exchange is being viewed, today?

 

 

-Crip

[Williams406]

Odds and ends:

 

Altius holding Callinan settles long-standing legal dispute with Hudbay. 777 zinc, copper, gold, silver royalty restructured to NSR from NPI. Callinan's Warbaby claim adjacent to 777 mine to be explored by Hudbay and new Callinan NSR on Hudbay land around. No material cash payments to Callinan, but gets the company cleaned up a bit. Callinan is a $90-$95 million company with $27 million cash, no debt. 777 mine as is has a 2021 estimated life.

 

Two institutional Quebec funds, after private placements, hold 7.25% and 8.5% of Virginia shares with rights to participate in future royalty transactions. Osisko recently announced that they own a total of 10% of Virginia. Add in Altius' and Mason Hill's stakes and you have a large chunk of Virginia shares accounted for.

 

 

[Guest Dazel]

 

http://www.businessinsider.com/jeremy-grantham-on-oil-economic-growth-2014-11

 

I suggest you click the link on the GMO letter. it is the most comprehensive explanation of commodities I have seen...more importantly

it explains the growth problems of the world that are being temporarily given a brake from expensive oil and other commodities...

[nostradamus]

http://www.alderonironore.com/_resources/news/nr_2014_12_09.pdf

 

Alderon Implements Cash Preservation Program

Alderon Iron Ore Corp. (TSX: ADV) (NYSE MKT: AXX) ("Alderon" or the “Company”) reports that it has implemented a comprehensive cash preservation program that will allow the company to maintain a healthy working capital position into 2017 without the need to access equity or debt financing during the intervening period, aside from the financing required to commence construction at the Kami Iron Ore Project. Measures associated with this program include a number of voluntary vendor payment deferrals and relief from debt servicing requirements such as those outlined in the transaction with Liberty Metals & Mining Holdings, LLC (“LMM”) described below, and workforce reductions. The Company has kept its core team of executives intact which will allow it to continue to advance the Kami Project construction financing efforts and to commence construction in a rapid and seamless manner once such financing has been obtained.

 

“These cost savings measures do not mean we are now on care and maintenance,” says Mark Morabito, Executive Chairman of Alderon. “We are working more closely than ever with our partner Hebei Iron and Steel (“HBIS”) on increasing Chinese participation in the project in order to increase access to available capital from China. Earlier this year, The China National Development and Reform Commission (“NDRC”) said Chinese steelmakers should keep building up stakes in global iron-ore assets in the interests of China's strategic security and "speaking rights," or influence, in global trade. China's ore imports rose 10% in 2013 to a record 819 million metric tons, according to customs data. The NDRC also said that China's iron-ore demand will still rise, its reliance on imports won't change, and the degree of monopoly in global iron-ore resources will still keep increasing.” Mr. Morabito adds, “this continuing commitment from our Chinese partners under NDRC mandate gives us confidence that we will be able move the Kami project into construction.”

 

One of the critical payment deferrals is in regards to the loan agreement (the “Loan Agreement”) that Alderon and its affiliate, The Kami Mine Limited Partnership, previously entered into with LMM for an amount of $22 million (the “LMM Loan”). The LMM Loan has interest payable semi-annually on June 30 and December 31 of each year at a rate of 8% per annum. The principal and interest amounts of the LMM Loan are convertible into common shares of Alderon. LMM has agreed to defer the next two interest payments due under the LMM Loan. These payments total $1,795,200 with $880,000 payable on December 31, 2014 and $915,200 payable on June 30, 2015. The deferred interest payments will be added to the principal amount of the LMM Loan and paid at maturity on December 31, 2018.

 

As consideration for the deferral of these interest payments, it has been agreed that LMM will receive common share purchase warrants. The number of warrants that will be received by LMM for each interest payment will be calculated by dividing the amount of the interest payment by the volume weighted average trading price of the Alderon common shares on the Toronto Stock Exchange for the five trading days prior to the date of each interest payment, plus a 10% premium (the “Warrant Price”). Each warrant will be exercisable until December 31, 2018 to acquire an Alderon common share at the Warrant Price.

[nostradamus]

I would have preferred it if the executives also took a pay cut as part of this process to extend the life of Alderon beyond 2017. Are the execs really going to be fully focused on Alderon in the next two years?

 

It looks like Morabito is already finding other things to occupy himself (announced yesterday):

 

http://www.roughriderexploration.com/s/news-releases.asp?ReportID=686849

 

 

 

[bizaro86]

I would have preferred it if the executives also took a pay cut as part of this process to extend the life of Alderon beyond 2017. Are the execs really going to be fully focused on Alderon in the next two years?

 

It looks like Morabito is already finding other things to occupy himself (announced yesterday):

 

http://www.roughriderexploration.com/s/news-releases.asp?ReportID=686849

 

Interesting. I thought this was a telling quote:

 

With over 15 years' of public markets experience, Mark Morabito has built an extensive track-record of significant capital-raises and successful corporate transactions within the mining industry. With total capital raises and commitments to date in excess of $900M, Mr. Morabito has established himself as one of the most respected and successful entrepreneurs in the junior mining sector.

 

Personally speaking, I wouldn't consider raising a bunch of money a success. I'd be interested more interested in what return investors received on that money...

[Williams406]

Morabito is also executive chairman of Excelsior, a would-be copper mine in Arizona that Callinan has both an equity and royalty interest in. I guess the keen instincts of these junior mining promoters prompt them to diversify a bit. With the kind of odds they face, I can't fault them for that, at least.

 

Not sure if anyone mentioned this earlier, but I just noticed Horizon Kinetics' 3rd quarter commentary profiles Royal Gold as a new addition to one of their portfolios. The context is how useful Royal Gold and Silver Wheaton are as portfolio diversifiers. If you're familiar with the royalty business, there may not be much new here, but a good reminder of the fairly attractive business model. According to the letter, 20 Royal Gold employees at a $4 (now $4.5) billion market cap business.

[nostradamus]

Q2 results out.

 

Lot's of known/expected negatives: large Mtm losses on Alderon, lots of inactivity on their iron ore exploration projects, mtm losses on their cranberry capital investments. I was also disappointed to see that the drilling on their Natashquan project JV with Anglo American seems to have yielded nothing.

 

The biggest concern for me is what is potentially happening to their Voisey's bay royalty. I think there is a temptation to get carried away with royalty business model. It has it positives for sure, but essentially the royalty is only as good as the legal documentation supporting it. How can we be sure that the rest of the ALS royalties will not be subject to interpretations that lead to substantial reductions?

 

N.

 

 

[TwoCitiesCapital]

Can someone help explain the IFRS reconciliation - i was under the impression from last quarter that this was due to the cash not being received at the parent level from the subsidairies/partnerships that own the royalties but it didn't correct this quarter meaning that it is wrong or that they're less frequent payouts then I expected (not quarterly).

 

Is the IFRS figure deduction 90% of revenue due to mine depletion or something?

[bskptkl]

If anyone cares to read, ALS comments from Salman Partners here:

 

https://salman.bluematrix.com/sellside/EmailDocViewer?encrypt=71ac9c32-3aa9-44a7-9bf8-eec9a1d371b9&mime=pdf&co=Salman&id=mplaster@SalmanPartners.com&source=mail

[TwoCitiesCapital]

If anyone cares to read, ALS comments from Salman Partners here:

 

https://salman.bluematrix.com/sellside/EmailDocViewer?encrypt=71ac9c32-3aa9-44a7-9bf8-eec9a1d371b9&mime=pdf&co=Salman&id=mplaster@SalmanPartners.com&source=mail

 

Thanks for sharing. Most interesting thing that I saw was the public listing of Callinan on the TSX. Would likely provide a nice boost and give Altius liquidity to sell into.  Hoping we hit that 80M prepayment before April to lower interest and avoid fees. 

[Williams406]

No big news here:

 

http://minesvirginia.com/en/index.php/press-en/osisko-and-virginia-file-joint-circular-regarding-special-meetings-for-shareholder-votes-on-business-combination2014-12-15/

 

Assuming a) no competing bids for Virginia and b) a deal close soon after the votes on January 12, Altius should have the option the to sell Osisko shares in 45 days or so. Mind you, I've got no insight as to the likelihood of Virginia getting another bid, Osisko getting bought out, or Altius getting an offer. In the base case of Altius selling it's Osisko shares and repaying debt (no other bids), I'm glad to see a very limited time-frame for closing the Osisko-Virginia all-stock deal--less chance for Osisko's stock to get hit.

 

I refuse to be optimistic regarding any iron ore development but I found this statement from the recent Altius MD&A interesting:

 

"Discussions between the JL Alliance and the Province of Newfoundland and Labrador are

ongoing and the Company is optimistic that an agreement can be reached in the near term."

 

This is no statement of fact, of course, but the previous paragraph stated that "Full project financing (for Alderon)...is unlikely in the near term."

 

Here's hoping Altius last year began a nice annual tradition of positive, transformative news releases around Christmas.

[beerbaron]

What happened with Alderon in the last 2 days? Window dressing?

 

BeerBaron

[SharperDingaan]

Purely speculative, but it would appear that either JL or the Virginia merger just successfully crossed a milestone.

 

SD

[finetrader]

This stock has moved up quite a lot lately and I don't know why.. Anyone knows?

[hohi]

This stock has moved up quite a lot lately and I don't know why.. Anyone knows?

 

Maybe Mr. Market has realized how ridiculously cheap Altius was @ $10. Without any news I don't see explosive upside from here, but optionality still is on our side.

 

- JL

- new aquisition

- further upside from VGQ/OR merger

- any good news regarding IronOre or especially Kami

- dividend

and so on and so on.

[beerbaron]

No idea why it's up. I have a fairly good idea of the non speculative value of als. Like SD was saying put some money at the lower end and sell high. Rinse and repeat.

[Williams406]

Hohi's list is a pretty good one for starters and I like Beerbaron's point about the non speculative value of Altius. My basic framework for thinking about the investment is Aesop's bird in the hand/birds in the bush. Prior to the PMRL/CDP acquisition, with cash and marketable investments comprising a large part of Altius' value, the bird in the hand was easy to measure, offset by some risk of squandering the cash on a foolish acquisition. Post PMRL/CDP, I'm confident they didn't squander it and now have durable cash flow to value primarily as the bird in hand. The birds in the bush are beyond me to value. At sub-$10 Canadian, I'm pretty sure you weren't paying for them. 

 

We may get news telling us Altius is a big fish...or a little one that won't be around any more. Or that Altius is a little bigger fish than we thought  w/o any acquisition. Sorry to mix metaphors...

[finetrader]

Like SD was saying put some money at the lower end and sell high. Rinse and repeat.

 

Well that is pretty much what I have been doing in the past 2 months. Bought a little with average price at 11.xx$ and sold today at 14$.

 

But next time it would be nice if someone would tell me that this is going to 10$ and right back up at 14$ a week later. This way I could load up much more than I did this time..

[peter1234]

But next time it would be nice if someone would tell me that this is going to 10$ and right back up at 14$ a week later. This way I could load up much more than I did this time..

+1

;)

[Gamecock-YT]

This is part of the prairie royalty:

 

CALGARY - Agrium Inc. (TSX:AGU) has restarted potash production at its Vanscoy mine southwest of Saskatoon.

 

Production at Vanscoy was suspended in July after a mechanical failure on the operation's main hoist system.

 

Agrium had planned to replace the equipment as part of an ongoing expansion and decided to delay a restart until it completed the tie-in of new capacity.

 

The Calgary-based fertilizer producer said Wednesday it's maintaining a target of producing 2.1 million tonnes of potash at Vanscoy in 2015, with activity ramping up over the first half of the year.

 

The expansion is expected to increase annual output at Vanscoy by about one million tonnes over a three-year period between 2015 and 2017.

 

Agrium executives said in November the project would cost US$2.3 billion, about 53 per cent more than the original estimate three years ago when the expansion was announced.

 

The company estimated in December 2011 the expansion would cost about US$1,500 per tonne of additional capacity — or about US$1.5 billion and later increased that forecast in February 2014 to nearly US$1.9 billion.

 

Ron Wilkinson, president of Agrium's wholesale business unit, has said the higher cost was due to a combination of factors including poor weather, contractor inefficiency and Ottawa's changes to Canada's temporary foreign workers program.

[Studesy]

Does this imply that you value Altius at $14, see a sufficient MOS at $11, and hope the market will give you the opportunity to repeatedly capture this spread going forward? What happens when the opportunity to "repeat" is gone because the stock continues to track upward after you sell at $14.  I've held a nice size position in this stock for 4yrs with as cost of roughly $9.  The "rinse and repeat" strategy is tempting as it has played out well the past few years and look good on paper if you have stuck to just that.  Also, after you factor in cap gains tax, wouldn't it make more sense to sit on this and allow things to compound at a above average rate of return while deferring cap over a much longer period?  Maybe I'm the patsy hanging on to this without rinsing and repeating.  Is there any logic in this rinse and repeat  strategy that I'm missing? TIA

 

Like SD was saying put some money at the lower end and sell high. Rinse and repeat.

 

Well that is pretty much what I have been doing in the past 2 months. Bought a little with average price at 11.xx$ and sold today at 14$.

 

But next time it would be nice if someone would tell me that this is going to 10$ and right back up at 14$ a week later. This way I could load up much more than I did this time..