ALS.TO - Altius Minerals

[linealdin]

Benchmark hard coking coal is trading above US$250, up 40% since the beginning of November. Certainly the right price environment for Allegiance Coal to sign a joint venture partner.

 

Also the right price environment for Teck to "evaluate Cardinal River mine life extension" as their latest presentation indicates they are doing. Inflection point for Altius: either only two years mine life left at Cardinal River or 10 years with the extension.

 

 

[mikek]

I would definitely take that final half percent royalty on Min. They get to decide when all permits are in and 50 percent of financing is done. I think they take that royalty.

[linealdin]

I would definitely take that final half percent royalty on Min. They get to decide when all permits are in and 50 percent of financing is done. I think they take that royalty.

 

Besides the technical risk, my other reservation regarding Excelsior is the staged production. By the time the Stage 3, 125 million pound per annum plant is commissioned in 2025 (that's the schedule in the feasibility study) the copper bull market could be over.

 

Environment is perfect for the Chapada mine because it is expanding and selling its copper right into the bull market. Payback for the royalty could be achieved within 4 years if the copper price cooperates. Fierce urgency of now.

[linealdin]

https://seekingalpha.com/article/4132964-labrador-iron-ores-yield-trouble-glut-set-surge

 

The short case against LIF. Fascinating that this analyst can write thousands of words about LIF without using the words “pellet” or “premium.” IOC, as we all know, is now majority pellet production and pellet premiums are going through the roof. As are premiums for high quality concentrate.

 

This analyst, who is short LIF, will actually be paying dividends from his account every time LIF declares dividends. Quite a brave soul.

 

*

 

There's a good chance that LIF hits $30 before the end of the year. New high of C$27.29 in early trading today. Peppy.

[linealdin]

Adventus closes its C$10 million financing. Altius takes its full pro rata share of C$2.7 million. Greenstone takes its pro rata share of C$1.7 million. No SEDI filing yet for Resource Capital Funds. John Baker of Altius also buys 57K shares in the financing.

 

With Dalton and Wells on the Adventus board, and Lawrence Winter as a technical advisor, Altius has insider knowledge of exactly what potential acquisition deals are in the pipeline. Every deal takes months of due diligence and negotiation. That insider knowledge makes putting the extra C$2.7 million in an easier decision.

 

(Crazy that Altius is still the largest shareholder of Alderon yet they lost all their board positions. Strategic mistake. A merger/takeover is a possibility if construction finance isn’t obtained soon. But Alderon has a medical doctor on the board, and not Brian Dalton. Who is going to advise on choosing the right development path or merger deal?)

[linealdin]

http://www.mining.com/value-top-50-mining-companies-surge-140-billion-2017/

 

Of the top 25 mining companies by market cap only 5 are primarily gold or precious metals companies (and none of those 5 are in the top 10 by market cap). The opportunities are so much larger in the non-precious metals space; it is the right space to grow into a multi-billion dollar royalty/stream company.

 

Altius already does a good amount of business with the top 50 mining companies.

 

1) LIF's royalty is on IOC, run by Rio Tinto (#2)

 

2) Bloom Lake and Kami have offtake agreements with Glencore (#3)

 

3) Voisey's Bay is run by Vale (#4)

 

4) Rocanville and other royalties with Potash Corp (#14)

 

5) Cardinal River met coal royalty with Teck (#18)

 

6) West Cork copper deal with First Quantum (#33)

 

7) Esterhazy royalty with Mosaic (#36)

 

More to come as Altius gains weight and credibility.

 

 

 

[linealdin]

Paladin Energy restructure is proceeding. Current shareholders will be mostly wiped out. Bondholders will make some money back. EDF, the French national electric utility company (71 billion Euros revenue in 2016), will receive at least 60% interest in the Michelin uranium property, which Altius has a 2% royalty on. And EDF has filed petitions to gain 100% ownership.

 

Uranium market comes back eventually. EDF is a big player. Let's hope they have plans for their new property.

[linealdin]

Still haven't seen the full potential of Altius's copper royalties. Last quarter Chapada sold copper at an average of $3.01, while 777 sold copper at an average of $2.88.

 

Copper is over $3.21 right now. The lag effects and the production hiccups at 777 won't last forever.

 

[linealdin]

https://www.businessinsider.com.au/iron-ore-price-rally-2017-12

 

Iron ore jumped 5% overnight to finish at $76.36 for benchmark 62% iron. I think it's safe to say those predictions of $50 iron by the end of 2017 were dead wrong. Iron ore bears very confused right now.

 

LIF finishing the week strong, should be another 52-week high.

 

 

[linealdin]

https://www.bloomberg.com/news/articles/2017-12-26/red-dirt-meets-blue-skies-as-iron-ore-in-thrall-to-the-mandarins

 

A beautiful chart showing the price divide between 65% and 58% iron ore.

 

“The high grade ore market could shift to deficit.”

 

The main effect of China’s environmental restrictions on steelmakers: Decimating the low quality domestic iron ore producers while favoring high quality seaborne iron ore.

 

Perfect for the Labrador Trough.

 

[linealdin]

Copper jumps to $3.26 after the Christmas break. Multi-year high on supply concerns and optimism about Chinese trade data.

 

Yamana’s stock price rose 5% after it sold exploration property for C$209 million last week. Well positioned for expansion at Chapada if that is the plan they choose. Details coming in January.

[Williams406]

https://www.bloomberg.com/news/articles/2017-12-26/red-dirt-meets-blue-skies-as-iron-ore-in-thrall-to-the-mandarins

 

A beautiful chart showing the price divide between 65% and 58% iron ore.

 

“The high grade ore market could shift to deficit.”

 

The main effect of China’s environmental restrictions on steelmakers: Decimating the low quality domestic iron ore producers while favoring high quality seaborne iron ore.

 

Perfect for the Labrador Trough.

 

Perfect, indeed. There is nothing to which Altius value is more levered than iron ore given LIF position and Alderon/JL and Champion. I will be interested to see what O'Keeffe does after Bloom re-open. A lot of eyeballs on the Trough right now. Although my efforts to be formally recognized as one of SD's nephews have failed, I'll come out of this pretty well if Altius can get something done with its Trough iron assets. It's the commodity biz, though, so I'm not counting any chickens just yet.

[linealdin]

https://www.forbes.com/sites/christopherhelman/2017/12/19/the-last-coal-tycoon-chris-cline/#f0d232b60972

 

Fascinating profile of coal mogul Chris Cline, who recently opened the Donkin met coal mine in Nova Scotia, and also paid $75 million for the Vista coal project in Alberta (formerly Coalspur Resources).

 

https://www.google.com/amp/s/amp.afr.com/street-talk/riversdale-resources-to-push-button-on-coal-ipo-in-early-2018-20171209-h01xgw

 

Michael O’Keeffe’s Riversdale Resources plans $200 million IPO on the ASX for its Crowsnest Pass met coal project in Alberta.

 

Fascinating that the smart money (serially successful moguls like Cline and O’Keeffe) are betting on Alberta coal.

[linealdin]

Adventus closes its C$10 million financing. Altius takes its full pro rata share of C$2.7 million. Greenstone takes its pro rata share of C$1.7 million. No SEDI filing yet for Resource Capital Funds.

 

Resource Capital Funds (RCF) did participate in the Adventus equity raise for C$1 million but it didn’t take its full pro rata share of C$1.8 million. Altius and Greenstone took full pro rata shares. Andre Gaumond, director of Altius, also bought a few shares.

 

Indicates that Altius is more enthusiastic about Adventus than RCF is.

[SharperDingaan]

Always keep in mind that it would take almost 2 years to put Kami into production. With the rest of the trough producing well before they get to market, there will be a lot more supply - and lower prices. For now it's better that the rest of the trough start loading on the pier, and IRON's ownership interests settle out.

 

One of the nephews was in St John's last week spending time with a significant other, and learning the lay of the land.

We're focused on St Johns's real estate and oil infrastructure at the moment, with an eye to redeploying our ridiculous Bitcoin proceeds. Iron will be used to diversify the portfolio.

 

SD

 

 

[linealdin]

Always keep in mind that it would take almost 2 years to put Kami into production. With the rest of the trough producing well before they get to market, there will be a lot more supply - and lower prices. For now it's better that the rest of the trough start loading on the pier, and IRON's ownership interests settle out.

 

One of the nephews was in St John's last week spending time with a significant other, and learning the lay of the land.

We're focused on St Johns's real estate and oil infrastructure at the moment, with an eye to redeploying our ridiculous Bitcoin proceeds. Iron will be used to diversify the portfolio.

 

SD

 

 

Congratulations on the Bitcoin speculation.

 

Trough ore is a specialty niche player in the world market. Ultra high quality pellets and ore for blending. Any incremental increase in supply from the Trough makes little difference to the global supply/demand balance. Iron ore should reach 3 billion tonnes of annual consumption by 2030. Alderon’s proposed 7.8 million tonnes of supply is a rounding error in that context.

 

My hope is that a little bit of Trough ore displaces a little bit of lower quality domestic Chinese or Western Australian supply (Cliffs running at a loss in WA). This should happen regardless of which way the general iron ore market moves.

 

We need a slight market adjustment to a higher quality product, not a revolution.

[linealdin]

Wolfden Resources hits a multi-year high of 60 cents in morning trading. Altius's 14.2 million shares worth C$8.52 million at that level, while its 7.1 million warrants (exercisable at 35 cents) would be worth C$4.6 million after exercise. Total potential position of C$12.78 million.

 

The sweetener of the Wolfden deal is that Altius received a significant amount of shares while WLF was at a depressed level. Equity appreciation could easily pay for the whole deal (cost of ~C$11 million).

 

And the run is just beginning. If there are good drill results WLF will take off. Investors want to ride an Ewan Downie vehicle because he's made them lots of money in the recent past.

[linealdin]

http://resourceworld.com/index.php/glencore-removes-production-overhang-fears-zinc-market/

 

Zinc finishes the year slightly above $1.50. The December rally is fueled by Glencore's announcement of zinc production guidance for 2018. Instead of restarting 500,000 tonnes of idled production (the market's worst fear) Glencore's guidance is that 2018 production of 1.09 million tonnes will be actually lower than 2017 production of 1.105 million tonnes.

 

Glencore idling those 500,000 tonnes a few years ago kicked off the zinc rally from its bottom of 60 cents in early 2016. They are going to stick to their discipline and try to keep zinc prices permanently higher. That seems to be their goal.

 

Takeaway for Altius? Very, very good outlook for zinc in the 2018 through 2020 period. Supply deficits are perfect timing. I expect record revenues from 777 over the rest of its mine life. I want to see 777 produce $18 million in revenue in 2018. Also, Adventus should have a 3 year window to make acquisitions and develop their properties before pure play zinc vehicles fall out of favor.

 

I like Adventus's current flagship project, Curipamba, because it has commodity versatility. As a VMS deposit it is as much a copper-gold-silver project (2.3% copper, 3 g/t gold, 56 g/t silver) as it is a zinc project (3% zinc). Doesn't depend too much on the zinc price.

 

The Wolfden Mt. Pickett deposit is zinc top heavy at 11% (1.45% copper, 4.83% lead).

 

 

 

 

[linealdin]

http://m.miningweekly.com/article/champion-ramps-up-bloom-lake-activity-first-train-to-roll-by-march-2017-12-30

 

Michael O’Keeffe starts his Canadian media promotion for Bloom Lake. (The major papers in Australia have already covered the story.) Processing plant upgrades will be commissioned in February while the first trainload of ore is expected in late February or early March. 400 workers or contractors on site.

 

Operating costs savings over Cliffs’s previous version of the mine: Processing plant upgrades improving iron recoveries; an efficient conveyor belt replacing inefficient trucks; the new multi-user port replacing transshipment and saving $8 a tonne; cheaper rail agreements; cheaper contract with its workers. All very logical improvements.

[Cigarbutt]

There is no doubt that Mr. O'Keefe and Mr. Cataford did an amazing job at cutting costs, improving efficiencies, optimizing infrastructure and production capacity.

There were a lot doubters.

They also "happened" to have the timing right as a lot of work had been done by Cliffs. It just looks that the previous owner ran out of money and commitment.

Mining is so opportunistic.

 

It seems that the Bloom Lake operation could "tolerate" iron ore prices in the mid 50's and the potential upside over the long life of the mine is significant.

 

Just reviewed what Mr. O'Keefe did in Mozambique with the Riversdale coal operation in 2011.

Brilliant mind able to pick the bottom or courageous gambler?

Who knows what the future holds?

What's clear now is that Champion is very well positioned with projected maximum yearly production capacity at 7,5t and a supply contract with Sojitz (Japan) covering 3t of this production.

Good luck to those riding the wave and hope that 2018 will be good.

 

[linealdin]

http://www.afr.com/business/mining/rare-earths/how-the-rich-invest-alex-waislitz-and-tolga-kumova-are-2017s-top-stockpickers-20171219-h07avy

 

A feature on how top Australian investors did well in 2017. Tolga Kumova doubled his money on Alderon, while Hilton Nathanson owned shares of Champion Iron, another top performer.

 

Aussies know first hand the kind of wealth iron ore can create. Aussie smart money bet on the Labrador Trough for 2017 and won.

[netnet]

They also "happened" to have the timing right as a lot of work had been done by Cliffs. It just looks that the previous owner ran out of money and commitment.

Mining is so opportunistic....

 

It seems that the Bloom Lake operation could "tolerate" iron ore prices in the mid 50's and the potential upside over the long life of the mine is significant....

 

Just reviewed what Mr. O'Keefe did in Mozambique with the Riversdale coal operation in 2011.

Brilliant mind able to pick the bottom or courageous gambler?

Who knows what the future holds?

Hmmm, who indeed knows what the future holds.

 

Damning with faint praise. 

 

By your reasoning, Buffett (or any of us) buying assets when they are on sale, i.e. Goldman Sachs in 2008, are just courageous gamblers??? WTF.  I would say it is playing the hand when the odds are in your favor, you can call it gambling if you like, but....

(By the way no one can pick the bottom tick, but you can know when it is cheap!)

 

I am assuming that you are not postulating that this was dumb luck. 

 

Now as far as the future goes, Champion at 1.00 is way different than Champion at .20.  I have lightened up, but generally the retail trade gets animated as mines are about to produce; past that, I'm out.

[Cigarbutt]

netnet,

Clarification.

Very few people consistently make money in mining/commodities.

The question about skill and luck underlines the strong possibility that Mr O'Keefe at Champion now is one of those exceptions.

I recognize also that frequent contributors on this Board (including you) may also be the exception.

I have some selected positive results in my record in this space but clearly not enough data points for a significant trend.

The spirit of the post was to underline the potential strength in others.

 

I just read writser's post (performance for 2017) and I enjoyed it (impressed, wow) the same way I enjoy watching Federer and Nadal.

But we don't have to swing at all the pitches.

And I prefer cycling.

 

The wish: "Good luck to those riding the wave and hope that 2018 will be good." was sincere.

 

 

[linealdin]

I suspect Altius has around 15 million potential Champion shares (10 million convertible from debenture and 5 million actual). If the project is executed as expected we should see the Champion stock price hit at least C$2.

 

Also no doubt O’Keeffe is canvassing potential buyers for the mine. A takeover at a C$2 billion market cap should satisfy most shareholders.

 

The Champion position is first in line to be monetized for debt repayment (because it pays no royalty revenue, unlike the LIF position). I doubt Altius still owns Champion shares at the end of 2018.

[linealdin]

https://www.juniorminingnetwork.com/mining-news/independent/40131-2018-outlook-from-exploration-insights-brent-cook-and-joe-mazumdar.html

 

Brent Cook picks Evrim Resources, which Altius owns 20% of, as top choice for 2018:

 

"This Americas focused prospect generator has recently signed significant project earn-ins for different projects, including a copper porphyry in eastern British Columbia (Axe project) with a major copper producer, Antofagasta Minerals (ANTO.LSE). EVM is taking full advantage of the lack of grassroots exploration projects generated by major precious and base metal producers and has planned a grand total of 24,000 to 34,000 meters of drilling for 2018; therefore, plenty of newsflow to come. It also has five active joint ventures and a regional exploration alliance in its assets."