Williams406 Posted January 2, 2017 Share Posted January 2, 2017 I'm reasonably plugged in to Alberta politics, but I think the idea that they would get government compensation is very, very unlikely. The big local power companies are huge employers and politically connected. Altus is neither. Also, they have stranded capex, which Altius as a landowner only does not. Westmoreland might get something for their stranded capital equipment, but I would put the likelihood of ALS getting more than 0 as 10% or less Bizaro86, what you state makes sense to me about Altius being unlikely to receive compensation. Since you are "reasonably plugged in" to Alberta politics, a few questions: a) Is the party that passed this legislation likely to remain in power for long? b) Do you think that matters with respect to the effects of this legislation? c) Is this legislation popular? Just trying to assess rough odds on a legislative reversal in Alberta that benefits Altius. Thanks for any thoughts. Link to comment Share on other sites More sharing options...
Gamecock-YT Posted January 2, 2017 Share Posted January 2, 2017 Assuming plants don't start cutting back early, I believe management has said it's only one royalty field affected by the new law? All the rest were on target to be mined out by then? Link to comment Share on other sites More sharing options...
Williams406 Posted January 9, 2017 Share Posted January 9, 2017 http://osiskogr.com/en/osisko-gold-royalties-announces-sale-of-labrador-iron-ore-royalty-corporation-holdings/ Looks like Osisko Gold Royalties is out of the iron ore business. Link to comment Share on other sites More sharing options...
Gamecock-YT Posted January 9, 2017 Share Posted January 9, 2017 http://osiskogr.com/en/osisko-gold-royalties-announces-sale-of-labrador-iron-ore-royalty-corporation-holdings/ Looks like Osisko Gold Royalties is out of the iron ore business. I think Altius sold some of their stake as well to pay down debt last quarter? Link to comment Share on other sites More sharing options...
Williams406 Posted January 9, 2017 Share Posted January 9, 2017 They received $10.7m proceeds from investments with a very decent capital gain so you're probably right. Link to comment Share on other sites More sharing options...
bizaro86 Posted January 12, 2017 Share Posted January 12, 2017 I'm reasonably plugged in to Alberta politics, but I think the idea that they would get government compensation is very, very unlikely. The big local power companies are huge employers and politically connected. Altus is neither. Also, they have stranded capex, which Altius as a landowner only does not. Westmoreland might get something for their stranded capital equipment, but I would put the likelihood of ALS getting more than 0 as 10% or less Bizaro86, what you state makes sense to me about Altius being unlikely to receive compensation. Since you are "reasonably plugged in" to Alberta politics, a few questions: a) Is the party that passed this legislation likely to remain in power for long? b) Do you think that matters with respect to the effects of this legislation? c) Is this legislation popular? Just trying to assess rough odds on a legislative reversal in Alberta that benefits Altius. Thanks for any thoughts. a) The party that is currently in power may be able to hold power in the next election. I'd put the chances of them winning at roughly 35%. The previous right wing party had become widely unpopular, and generated a right wing protest part, as well as support for the current left wing government. Vote splitting between the two right wing parties allowed the first time power in Alberta shifted leftward, ever. The historical right wing governing party (Progressive Conservative) is having a leadership contest right now, and the leading candidate (Jason Kenney) is proposing to merge the party with the right wing protest party (Wild Rose). If that happens, I think them winning the next election is a shoe in. But there are egos involved on both sides, and the vote split will be a factor again if they don't merge. The biggest factor affecting the popularity of the current government (which is very poor) is the current economic situation in Alberta, which is very poor. (Although they are wildly popular in the left-wing segments of the population, which have had their political views ignored for generations) An increase in the price of oil and gas may allow the new government to claim its policies have helped spur economic growth, and get credit for a recovery. The next election is scheduled for Spring 2019, so a recovery by then will help the current government. I also think their plan of rebating most of the carbon tax money to low income groups is a smart political move, as it will endear their natural constituency to them even more. Realistically, Alberta's high income energy professionals will never vote for the NDP, so they need to make up the votes elsewhere. b) I don't think it does on the coal plant side. Even if the NDP loses the next election, I doubt the right wing parties will choose to roll back the coal plant closures. Maybe a few of them will get a reprieve, but they'll keep that policy. It will allow them to appear strong on the environment, and doesn't hurt the oil and gas industry, which is more important to the province by probably two orders of magnitude. I also doubt a right wing government would be more amenable to paying out Altius' losses on this. They bought mineral rights and the government reduced the value of the product. They haven't sterilized the minerals, Altius can still mine them to sell for export, it just happens that would be uneconomic. Even if they were sterilized, the law on seizure of mineral rights in Alberta (which has held up to challenge) is that mineral rights lease forfeiture is entitled to the costs that have been incurred, including whatever was paid for the rights initially when they were acquired from the crown. I believe Altius land is freehold mineral rights, but am not positive. Either way, I would expect the capital that went into the mines may get covered, but none of that is ALS money. I actually think they have the weakest position by far of anyone at the table, both legally and politically. c) The legislation is polarizing. Popularity is split strongly among partisan lines, and slightly by economic class. My facebook feed is full of strong opinions from both sides of the issue. I would say more unpopular than popular, but nobody has received a rebate cheque yet, and that will probably sway some opinions. The price of gasoline did go up a bunch on Jan 1, which didn't help them at all, and numerous service stations are calling out the government for the new tax with stickers on the pumps. Anyway, I am long ALS, but don't expect them to get any compensation here. I really should re-run my valuation, as the potash and coal acquisition was the main reason I bought. I'd be very interested in seeing a current sum of the parts if anyone has one. Hope that helps, and feel free to ask follow ups. Link to comment Share on other sites More sharing options...
nostradamus Posted January 24, 2017 Share Posted January 24, 2017 http://www.marketwired.com/press-release/adventus-zinc-corporation-files-final-prospectus-announces-pricing-its-intial-public-2190515.htm IPO sales price for Adventus Zinc has been set at CAD0.5. Altius owns around 12m shares, making its stake worth CAD6m at the IPO price. IPO scheduled for 7 February. N. Link to comment Share on other sites More sharing options...
cwericb Posted January 24, 2017 Share Posted January 24, 2017 At one time Altius had 32.9 million shares of Alderon. Do they still hold those shares? In October Alderon shares were running at about 10 cents. Today they are near 60 cents per share. If so, and if my math is correct, shouldn’t that be a gain of roughly $16 million for ALS in the past 3 months? Link to comment Share on other sites More sharing options...
cwericb Posted January 24, 2017 Share Posted January 24, 2017 Answer to my own question. Altius owns 25% of Alderon or 32,869,006 shares. A gain of $.50 per share, would indicate a gain for Altius of $16,434,503 in the past 3 months. Surprised no one has mentioned this. Link to comment Share on other sites More sharing options...
Williams406 Posted January 24, 2017 Share Posted January 24, 2017 Altius also has a small bit of Champion stock though that's much less material to Altius at this point. I suppose by keeping the recent, brief Alderon discussion on the Altius thread, we indirectly acknowledged Altius' ownership stake in Alderon. The important thing is that SD understands how much I appreciate his contribution to this thread. I consider him almost an uncle of sorts--in a very real and legally-binding sense. "No. We're purely passive on this one, and very long term. Most of our position was bought in the $0.11-$0.20 range, in a long series of 10,000 share blocks - and over months. The expectation is that when the mine is built, nephews will be able to buy a house in London (UK); mortgage free." SD Link to comment Share on other sites More sharing options...
tengen Posted January 24, 2017 Share Posted January 24, 2017 I consider him almost an uncle of sorts--in a very real and legally-binding sense. A Monty Python reference? Anyway, I'd like to take this opportunity to thank SD, William406 and everyone else who has contributed to the Altius discussion over the years. Link to comment Share on other sites More sharing options...
SharperDingaan Posted January 24, 2017 Share Posted January 24, 2017 It's nice to have appreciation, but it can really screw up portfolio weightings! We've had to 'side-pocket' our holding into a totally separate portfolio. KAMI will end up as a sizeable mine, but ADV is going to have to farm it out to get it built. Once KAMI is built, it's highly likely that shareholders will agree to one of the partners taking them out via a share swap. Our nephews end up with a nice block of quality stock, & some great stories. The congrats should really go to Dazel for bringing it to the board. We just did our own DD, & invested accordingly. SD Link to comment Share on other sites More sharing options...
cwericb Posted January 24, 2017 Share Posted January 24, 2017 ... and out of curiosity, where did Dazel go. I very much miss his input on ADV, ALS and CKI. Link to comment Share on other sites More sharing options...
netnet Posted January 24, 2017 Share Posted January 24, 2017 KAMI will end up as a sizeable mine, but ADV is going to have to farm it out to get it built. Once KAMI is built, it's highly likely that shareholders will agree to one of the partners taking them out via a share swap. Our nephews end up with a nice block of quality stock, & some great stories. So from that I take it that you think there is considerable value in ADV today. Would have appreciated a mention after amassed your position. ;) I must say I like Champion, ADV always seemed risky, even before the crash. Honestly, with a heads up months ago or even today, I can not think how to size the position, which probably means I don't know enough to actually be in the name. Link to comment Share on other sites More sharing options...
wachtwoord Posted January 24, 2017 Share Posted January 24, 2017 ... and out of curiosity, where did Dazel go. I very much miss his input on ADV, ALS and CKI. He had to stop actively contributing here because of his active involvement and knowledge he by law would not be allowed to share here. Link to comment Share on other sites More sharing options...
SharperDingaan Posted January 24, 2017 Share Posted January 24, 2017 KAMI will end up as a sizeable mine, but ADV is going to have to farm it out to get it built. Once KAMI is built, it's highly likely that shareholders will agree to one of the partners taking them out via a share swap. Our nephews end up with a nice block of quality stock, & some great stories. So from that I take it that you think there is considerable value in ADV today. Would have appreciated a mention after amassed your position. ;) I must say I like Champion, ADV always seemed risky, even before the crash. Honestly, with a heads up months ago or even today, I can not think how to size the position, which probably means I don't know enough to actually be in the name. Risk is the nature of this business; todays golden goose could just as easily have ended up as an expensive Xmas dinner. There's also no real way to size these things, as we don't have certainty (Kelly formula). For us the solution has always been to sidebar the runners into a separate marginable portfolio, in return for a T-Bill of roughly equal value, bought on margin. Thereafter we manage the side bared portfolio as we would any other margined portfolio. We keep the upside, & stop the distortion on the main portfolio. SD Link to comment Share on other sites More sharing options...
Haasje Posted January 26, 2017 Share Posted January 26, 2017 Sharper how does that make sense? If you move an asset in another account it is still part of your portfolio right? :o Link to comment Share on other sites More sharing options...
SharperDingaan Posted January 27, 2017 Share Posted January 27, 2017 Assume you have a lot of shares of XYZ, with a very low market price; volume x price of XYZ = 15% of a 'main portfolio'. Fortune smiles & the price of XYZ triples in a matter of months - XYZ is now getting up to 45% of the portfolio, but its all early stage speculation. Prudence suggests either sell it back down to 15% & reinvest the proceeds elsewhere, or put it in some 'other portfolio' with a different IPS. The solution is to 'lend' a T-Bill to this 'other portfolio', & transfer XYZ to it at MV in return for cash obtained by margining the T-Bill, which is reinvested in the main portfolio. The whole XYZ position can then continue its run without affecting the PM of the 'main portfolio'. At the end of the year we count both the 'main portfolio' and this 'other portfolio' in consolidated results. Eventually XYZ gets sold, & the T-Bill + cash of this 'other portfolio' - returned to the 'main portfolio'. Alternatively the 'other portfolio' is retained, & rededicated to some other purpose. SD Link to comment Share on other sites More sharing options...
Williams406 Posted February 3, 2017 Share Posted February 3, 2017 Altius partial write-down of Genesee: http://altiusminerals.com/uploads/PR1701-Genesee.pdf Link to comment Share on other sites More sharing options...
Williams406 Posted February 16, 2017 Share Posted February 16, 2017 https://ceo.ca/@marketwired/champion-iron-announces-completion-of-bloom-lake-mine Bloom Lake Feasibility Study for mine re-start. No surprise given iron ore prices. Looks like $327 initial cap-ex. Wish Altius had 25% of Champion equity... Link to comment Share on other sites More sharing options...
SharperDingaan Posted February 16, 2017 Share Posted February 16, 2017 Nice to see, & it will help everyone in the region. Our own thoughts are that Kami would come in at something better that Bloom Lake, but at the moment -only the additional facilities for the mine would be bought in; the mine itself would not be built. We would expect that the actual mine decision will very much depend on how US infrastructure spending looks like playing out - and it is far too early still to be able to reasonably assess it. To really shine; Kami needs to be getting world price in USD, paying CAD costs, and tide-water delivering to east coast US buyers. Feed asian users with Australian supply, & the US east coast from kami (via swap agreements), everyone saves on transport costs, and kami gets the volume to warrant a start-up. But none of this happens - unless the US starts building in a big way, & pushing up its demand for steel. If it happens - the trough will also materially benefit from network effects as more producing mines share the same facilities. Maybe another 5-10% off costs, depending on what ends up shared. All good. SD Link to comment Share on other sites More sharing options...
bizaro86 Posted February 17, 2017 Share Posted February 17, 2017 My experience in the oilsands was that what you make in infrastructure sharing you give up in higher labour and services costs from the new operator competing with you for resources. Maybe that isn't true in iron ore, but some of the drivers (high capex heavy industry, remote location) seem similar to me... Link to comment Share on other sites More sharing options...
SharperDingaan Posted February 17, 2017 Share Posted February 17, 2017 Agreed, but it needs all the operators to be producing at the same time - and demand > supply of available workers. Most would expect a new mine to take around 18 months to get into production, & another 6 months to work the bugs out. This is also Newfoundland; there's quite a pool of labor available, & most would prefer to work closer to home if they could. Cost pressure is likely to be somewhat restrained, assuming they choose not to crash the start-up. Obviously we wish them all luck. SD Link to comment Share on other sites More sharing options...
giofranchi Posted February 24, 2017 Share Posted February 24, 2017 FAIRFAX TO MAKE STRATEGIC INVESTMENT IN ALTIUS http://altius.cmail19.com/t/ViewEmail/d/01CA5BE82B0C423E/2F9415254B7704C2C68C6A341B5D209E Cheers, Gio Link to comment Share on other sites More sharing options...
nostradamus Posted February 24, 2017 Share Posted February 24, 2017 I'm not sure what to think about this, do they really need the money? I thought the cycle had turned and now was the time to reap what they had sown rather than essentially take on new debt and dilute shareholders. N. Link to comment Share on other sites More sharing options...
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