Mungerville Posted February 1, 2011 Share Posted February 1, 2011 Dazel, I haven't posted much lately. Looks like an interesting find and I don't tend to think much is interesting. So its a bunch of free options with a net-net and a long-term value oriented CEO with a strong balance sheet and a decent track record. That's a pretty good start. How do you lose money on this stock long-term? Any ideas? If the only way to lose is for commodities to tank, could you not buy a good chunk and hedge it with put options on a commodity index?...taking out that risk thereby permitting you to invest more into it than you otherwise might. Link to comment Share on other sites More sharing options...
Mungerville Posted February 1, 2011 Share Posted February 1, 2011 Dazel, I am precluded from transacting in gold or gold mining shares where I currently work. For this reason, I am asking you, roughly, what percentage of the value of their projects are in gold mining versus all other mining projects together? Just guestimate... a) More or less than 10%? b) Less than 5%? (If its down there somewhere, I might be able to invest!) Link to comment Share on other sites More sharing options...
gurjot Posted February 3, 2011 Share Posted February 3, 2011 as of now close to zero. but they did hire paul van eeden recently to manage 25 of 200 mil in cash they have and some of that probably will be invested in early gold exploration companies. cheers Link to comment Share on other sites More sharing options...
Guest Dazel Posted February 3, 2011 Share Posted February 3, 2011 Mungerville, Altius Gold holdings-Millrock (bought $1m...sold $2m worth and likely have $2m holding) -Rambler Metals (copper-gold) about $5m holding -2 or 3 projects on the books for less than a million as for the joint venture with Van Eden...I would highly suspect that gold is holdings would be very small. As you can see from the Millrock sales above they made above they are not big on precious metals. So likely saying 5% would be a stretch. Dazel. Link to comment Share on other sites More sharing options...
Guest Dazel Posted February 3, 2011 Share Posted February 3, 2011 "So its a bunch of free options with a net-net and a long-term value oriented CEO with a strong balance sheet and a decent track record. That's a pretty good start. How do you lose money on this stock long-term? Any ideas? If the only way to lose is for commodities to tank, could you not buy a good chunk and hedge it with put options on a commodity index?...taking out that risk thereby permitting you to invest more into it than you otherwise might." Mungervillle, good question...and not a bad way to hedge. One thing to note is that they do not have a big commodity risk to their current market cap because the majority of their assets are cash equivalents. Could Alderon ($120m securities) be effected by iron ore prices? next year yeah..but the price this year (2011) is slated to go up by 50 to 80% and it does not float! The Nickel Royalty will kick now that the strike is over at Voisey bay. As time passes the Uranium and other royalties will also kick in....So longer term commodities will effect asset prices but the market is pricing them at 0 right now anyways so what's the risk. why hedge. Here is an interesting free option....they have a Potash property, Oil shales, and rare earth projects. How quickly do you think you could have speculators on these properties? I mean if they went to market tomorrow and said they were auctioning off the properties one by one....you would make 3 times your money. The controling position of Alderon 45% should have a premium as well because they will decide who gets the property and it is very possible that they do put it up for bids once their final estimate is done in early March. I think they will continue to create value and do things similar to what Leucadia has done with their resource projects...creative...they are not using their cash...it's great model with very little risk. Dazel. Link to comment Share on other sites More sharing options...
Mungerville Posted February 3, 2011 Share Posted February 3, 2011 Dazel, Thank you for taking the time to answer my rather lame questions. Much appreciated. I'll check with compliance where I work and hopefully have the opportunity to dig into the details and invest. Looks like an interesting opportunity to me. Link to comment Share on other sites More sharing options...
netnet Posted February 3, 2011 Share Posted February 3, 2011 I hate to say it but the problem with investing in this name is I can not find any reason not! To be contrarian, I have to know approximately what will make this a bad investment. A crash in resource prices would hurt but given how they invest, it probably would be a good for them, as they could deploy capital. So it would be bad for the stock in the short term but great for the business and business model in the long run. It is a bit of a jockey stock, so there is some risk there, but this guy has really knocked the cover off of the ball. The company is really, really cheap given a superior business model and a tail wind. Now obviously if the guy is crook that would be a problem, but he seems so far above the sleaze that you sometimes find in the junior resource sector, he does not even seem to be an aggrandizing in a benign way. (Buffett is not a promoter per se, but he is no shrinking violet either!) Nor does he appear to be overly optioned. Okay guys I can't find any warts. There have to be some. What gives. (You might wonder why I am so skeptical. Well not only do I have the scars to prove it, need I remind people of Biglari. That twerp fooled me. Not to say that my radar is that good. I thought that Prem was really a Biglari type. I just did not trust Prem's letters to shareholders, when he was channeling Buffett. Yet I believed Biglari when he did it. I learned anew to be skeptical.) Best, Netnet Link to comment Share on other sites More sharing options...
Guest Dazel Posted February 4, 2011 Share Posted February 4, 2011 Altius Character. Altius is backed by the best characters in the mining business. Rick rule has perhaps the best reputation for mining investment in junior's in the United States. He is now part of the Sprott group. Scottish billionaire Hobson (formerly owned 8% of Manchester United) is a shareholder and partner in Rambler metals and NLRC. These are great investors...and have been a great sounding board for Dalton. Dalton....He is from Newfoundland and did his geology degree at Memomorial also in that province. His reputation at home would mean more to him and Altius than $$ could buy. Trust is a big thing in Newfoundland. The permits for their projects and the NLRC licenses are landmark decisions. I am impressed by how conservative they have been with their cash reserves and capital postion...as we know the junior mining sector has a bad reputation. However, Altius has emerged as a smashing success...they were founded as a 10 cent stock...how is that return? Dazel. Link to comment Share on other sites More sharing options...
Guest Dazel Posted February 4, 2011 Share Posted February 4, 2011 Alderon now has a market cap of $270m.....it was worth less than $1m on Altius balance sheet a year and half ago! Dazel. Link to comment Share on other sites More sharing options...
Myth465 Posted February 4, 2011 Share Posted February 4, 2011 Dazel you should be in sales. It doesnt seem like the run in Alderon is being reflected in the stock price of Altius. Link to comment Share on other sites More sharing options...
Guest Dazel Posted February 4, 2011 Share Posted February 4, 2011 yeah...can you tell I am a little excited about this position! Link to comment Share on other sites More sharing options...
alertmeipp Posted February 4, 2011 Share Posted February 4, 2011 okay.. u got me in. remember if it tanks shortly after, it's not me. Link to comment Share on other sites More sharing options...
Myth465 Posted February 4, 2011 Share Posted February 4, 2011 Im close currently going thru letters. Will likely buy a small starter position by the end of day. These guys have been very impressive with their equity investments. I dont know much about mining but I can use a calculator. This seems like a no brainer. They will mint money if all these mines get up and running due to the royalties and in the meantime they have been able to generate pretty high returns on their cash by doing LUK like ventures. Hopefully the moves in Alderon are sustainable (I have no idea how to value that one), even if they arent there are alot of assets and free kickers here, it would be tough to loss unless these guys push all in on the wrong idea. Current Asset Base (as of December 31, 2010) $145 Million in treasury 529,251 shares of Royal Gold Inc. valued at ~$28 Million (received as part of IRC purchase transacti) Voisey's Bay LP interest (10%) *32,285,006 shares of Alderon Resources Corp. (ADV-TSX-V) $25 million investment with Cranberry Capital (Paul van Eeden) - early stage mineral exploration companies Increasing collection of "created" royalties - Paladin Energy - CMB - 2% gross sales uranium royalty and 2% NSR on base metals and precious metals, Alderon Resource Corp. - 3% Gross Sales Royalty on Kami iron ore project, Northern Abitibi's Viking Gold project 2-4% sliding scale net smelter return royalty, Rare Element Resources' Nuiklavik REE project - 2% gross over-riding sales royalty. Diverse portfolio of exploration projects including 9 active Joint Ventures Rambler Metals and Mining plc (12 million shares) Link to comment Share on other sites More sharing options...
biaggio Posted February 4, 2011 Share Posted February 4, 2011 "Hopefully the moves in Alderon are sustainable (I have no idea how to value that one), even if they arent there are alot of assets and free kickers here, it would be tough to loss unless these guys push all in on the wrong idea. " Insiders have not cashed in their options that they were awarded recently- http://www.canadianinsider.com/coReport/allTransactions.php?ticker=adv Showed also a small amount of insider buying. Link to comment Share on other sites More sharing options...
sdev Posted February 4, 2011 Share Posted February 4, 2011 Wow, wish I hadn't ignored this thread until now. Great little company Dazel. Keeping this on the watchlist to see if it ever has a solid pullback. Link to comment Share on other sites More sharing options...
biaggio Posted February 4, 2011 Share Posted February 4, 2011 sdev, I have not bought any, but it looks like it looks like a good bargain still. What do others think? Link to comment Share on other sites More sharing options...
Myth465 Posted February 4, 2011 Share Posted February 4, 2011 I bought a 1.5% position today and will likely scale it up as my cash is moved around, will probably hold at 5% while I "learn about mining and Management". It seems like a good owner manager company. The only risk from my view is Alderon being overvalued and all other options turning out to be worthless. Similar to LUK, if I can get back to the enterprise value based on a very conservative valuation of the assets and still have a number of free kickers I am happy. Based on market value for a valuation of Alderon and Rambler, + taking the Cranberry Capital investment at book, + the cash, + a conservative valuation for the Bay royalty gets us at or over the EV. After that everything else is free, and I am happy seeing what they come up with given the returns they have been able to generate on their cash thus far. Plus I believe we are getting a decent chance to buy before the run up in Alderon gets reflected in the SP. Worse cause Alderon collapses and we are right back where we started. Link to comment Share on other sites More sharing options...
alertmeipp Posted February 5, 2011 Share Posted February 5, 2011 Congrats - check out QUX.TO too. I think they are pretty cheap COPPER play. Link to comment Share on other sites More sharing options...
Myth465 Posted February 5, 2011 Share Posted February 5, 2011 Congrats - check out QUX.TO too. I think they are pretty cheap COPPER play. You guys make it terribly hard to hold cash, I know we are due for a pullback but my cash loads are dwindling. Link to comment Share on other sites More sharing options...
Zorrofan Posted February 6, 2011 Share Posted February 6, 2011 Dazel, Did you say Sprott owns some? I haven't been able to confirm that it in any Altius filing.... cheers Zorro Link to comment Share on other sites More sharing options...
Guest Dazel Posted February 6, 2011 Share Posted February 6, 2011 They were in joint venture with Sprott Resource corp. Sprott Inc bought out Rick Rule and his related companies with Sprott shares...that deal will be finalized in February....Rick Rule and his firms have been longtime holders of Altius...so they will own some! I have not seen a direct investment though...I would not be surprised if they are the elephant in the room lately. They obviously know Altius. disclosure...we now control about 1.5% of the shares outstanding. Dazel. Link to comment Share on other sites More sharing options...
Mark Jr. Posted February 8, 2011 Share Posted February 8, 2011 Dazel, Did you say Sprott owns some? I haven't been able to confirm that it in any Altius filing.... cheers Zorro I was just looking at Sprott's latest 13-F and they aren't listed as a holding http://www.sec.gov/Archives/edgar/data/1277006/000127700611000024/dec1013fa.txt Link to comment Share on other sites More sharing options...
Guest Dazel Posted February 8, 2011 Share Posted February 8, 2011 Rick Rule has made a killing on his Sprott deal! Most have not heard of him. He is the reason i got interested in Altius! http://www.theglobeandmail.com/globe-investor/investment-ideas/streetwise/sprotts-takeover-partners-gain-from-share-rally/article1897395/ Dazel. Link to comment Share on other sites More sharing options...
Partner24 Posted February 11, 2011 Share Posted February 11, 2011 Can someone come up with a some of the parts calculation? It's a nearly 400$ millions market cap company. - (145 millions and treasury December 31th) - (125 millions Alderon stake actual value) + related future income tax - (28$ millions in Royal Gold) Still more than 100 millions in assets to find in order to say that everything else is "free". Link to comment Share on other sites More sharing options...
Myth465 Posted February 11, 2011 Share Posted February 11, 2011 You are missing the bay royalty interest is probably worth at least $100 million now that the strike is over. Link to comment Share on other sites More sharing options...
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