ALS.TO - Altius Minerals

[linealdin]

Alderon creeps up to 31 cents. Altius’s equity position worth C$16 million at that level.

[mugwump]

hi linealdin

thanks for all your postings

they're great!

[reader]

hi linealdin

thanks for all your postings

they're great!

 

I second that.

I learn so much from this thread, so many sources of info and so much insight.

a couple of times I've wanted to post fresh info and it was posted 20 mins earlier.

thanks.

[linealdin]

Vale and BHP both have modest misses on their Q1 iron ore production targets. Heavy rain (Vale) and railroad car unloading issues (BHP). Rio Tinto hits its Q1 target. Benchmark iron ore price up to around $66.

 

https://mobile.twitter.com/KingandBay/status/986226524151001090

 

More pictures of Alderon’s trip to China. Conference room presentation and a banquet.

 

King & Bay also tweeted a picture of a visit to Northern Heavy Industries, a state-owned mining equipment supplier.

[mugwump]

adventus drill results

https://ceo.ca/@newswire/adventus-and-salazar-announce-initial-2018-results

[linealdin]

adventus drill results

https://ceo.ca/@newswire/adventus-and-salazar-announce-initial-2018-results

 

This is the infill drilling at El Domo that began in early March. Results are as good as expected. El Domo is a beast.

 

But drilling at El Gallo and Sesmo began in late January and February and is ongoing. True exploration drilling. I assume they are withholding assay results on those holes until they get a good hit.

[mugwump]

does altius have an interest in nickel?

http://www.kitcometals.com/charts/nickel_historical.html

[Williams406]

does altius have an interest in nickel?

http://www.kitcometals.com/charts/nickel_historical.html

 

Voisey's Bay on the royalty side. A couple of projects on the exploration side.

[mugwump]

thanks williams 406

[linealdin]

http://m.miningweekly.com/article/latin-america-the-leading-region-in-new-global-wave-of-exploration-2018-04-20/rep_id:3861

 

Relates to Altius’s project generation business. Total global non-ferrous exploration budget for 2017, by commodity: gold 50%, copper 21%, zinc 6%, nickel 3%, diamonds 3%, uranium 3%, platinum 1%.

 

Altius needs partner funding to advance its project generation portfolio. Still a tough market for projects that are not gold or copper.

 

Explains why still no partners announced for Lynx Diamonds or Voyageur Nickel. Good projects but the exploration budgets aren’t available.

[linealdin]

New Found Gold has secured its website and twitter account. newfoundgold.ca

 

Altius is going to have a big equity position in this IPO.

[linealdin]

https://globenewswire.com/news-release/2018/04/19/1482234/0/en/New-Millennium-Iron-Corp-Announces-Agreements-for-Sale-of-Portion-of-Multi-User-Wharf-Capacity-at-Sept-Îles-Quebec.html

 

New Millennium sold 6.5 million tonnes of its multi-user port capacity to Tacora for C$4 million and a 10 cents per tonne toll. Nice deal.

 

Alderon has 8 million tonnes of reserved port capacity it, too, could sell. But we’re pretending Kami will be built this cycle and that capacity will be used.

[linealdin]

https://ici.radio-canada.ca/nouvelle/1091958/fermont-en-effervescence-depuis-la-reouverture-de-la-mine-du-lac-bloom

 

In French. Economy of town of Fermont is booming because of restart of Bloom Lake. Airport, housing, grocery stores and restaurants are packed. Many residents considering starting businesses to service the mine and its 500 workers.

 

If the Bloom Lake restart works (and the ship and the town activity indicates that it is working) it will attract more risk capital to the Labrador Trough. Inevitable.

[linealdin]

http://altiusminerals.com/uploads/2018-04-24-Project-Generation-Portfolio-Update-FINAL-.pdf

 

Project generation update. Big news: Lynx Diamond spinout is coming. Several strategic investors on board to finance the expensive bulk sampling program.

[linealdin]

A note about diamond mines. If they go into production they tend to be very, very large.

 

Sandstorm bought a 1% royalty on the Diavik diamond mine which is supposed to yield them US$7 million to US$8 million in annual income.

 

I expect Altius to structure a spin-out deal where they hold a 2% to 3% royalty on Lynx. There is the potential to yield as much royalty revenue as a bulk commodity project like Kami: C$25 million plus per annum.

[linealdin]

The Altius two-part business structure is unique in the royalties sector. When the bull market is booming the whole 17 member staff is consumed with bull market activity: merchant banking for 3 new spinouts, a dizzying number of project vendout agreements, and selling securities from the project generation portfolio.

 

When the bull market activity ends and the capital markets dry up the staff can switch focus to rebuilding the land bank and acquiring new royalties on the cheap.

 

It’s a beautiful cycle.

 

Companies whose sole mission is buying royalties will keep doing it even at the top of the market. Their employees will feel useless (and afraid for their bonuses) if they aren’t constantly making royalty deals.

[linealdin]

I like that the Lynx Diamond project is located in a much less fearsome place than the Northwest Territories where most of Canada’s diamonds come from. Knee Lake is basically the same latitude as Flin Flon. Cold and remote but nothing like NWT. That will keep exploration and production costs reasonable.

 

Will be interesting to see if a big diamond player like DeBeers or BHP jumps in as an early stage strategic investor in this spin-out vehicle. Only a large and experienced mining group is going to be able to actually build the mine.

[linealdin]

http://angrygeologist.blogspot.com/2018/04/evrim-more-detailed-view.html?m=1

 

A skeptical take on Cuale from the Angry Geologist. Maybe only 350K gold ounces at Cuale?

 

And a response in the comments section from Brent Cook:

 

“I think the subdued enthusiasm you present is a good thing for the stock. However, your analysis is grasping at straws and IMO ignoring the limited geologic interpretation EVM has provided. EVM claims a much larger alt zone and that post-mineral volcanics cover the western extent of alt. They think they are in a dome field and have sampled (anomalous) silica ribs down hill to east. At this early stage we are all guessing like the five blind guys and the elephant parable. Time and drilling will tell but even excluding the HG samples, the oxidized trench results are a pretty good start.”

[linealdin]

https://www.google.com/amp/s/www.theglobeandmail.com/amp/business/industry-news/energy-and-resources/article-brazilian-shuffle-canpotex-opens-sao-paulo-office-as-vale-exits/

 

Canpotex, the marketing cartel for Nutrien and Mosaic, opens up a sales office in Brazil. Brazil is Canpotex’s largest single market at 25% of sales, and offers the highest regional price in potash at US$293 per tonne, up US$49 over the year. Brazil’s fertilizer demand predicted to grow for the next 3 decades.

 

Canpotex is basically a cartel that can control pricing and supply. Don’t assume there wasn’t some coordination between producers with the recent shutdowns of higher cost potash mines in Canada.

[linealdin]

http://www.allegiancecoal.com.au/irm/PDF/1358_0/March2018QuarterlyActivitiesReport

 

Quarterly activity report for Allegiance Coal. Washed coal samples sent to two Japanese steel mills and one South Korean steel mill for coke oven tests. Results for the company’s own coke oven tests will be available by late May.

 

Bankable feasibility study due by end of September.

 

A$4.8 million cash funds them through permitting for the small mine (240,000 tonnes) project.

[linealdin]

https://www.juniorminingnetwork.com/junior-miner-news/press-releases/2558-tsx-venture/sic/45760-sokoman-iron-provides-moosehead-gold-project-update-revised-3-d-modelling-underway.html

 

Sokoman’s plan for drilling Moosehead Gold: Revised 3D modelling and a 2000 meter drill program targeting deeper mineralization.

 

Altius now owns 20% of Sokoman. The 1.429 million warrants Altius picked up have a strike price of 5 cents for the next 3 years. Will amplify gains if a discovery is made.

[linealdin]

https://s22.q4cdn.com/899716706/files/doc_presentations/2018/European-Gold-Forum-Handout_Final.pdf

 

Yamana presentation. Slide 24 indicates mining rates at Chapada will remain elevated in 2018. Plan is to stockpile 15 million tonnes of low grade ore.

 

What this indicates: the Chapada processing plant is maxed out and can not keep up with the rate the ore is being pulled out of the ground. Plant throughput expansion is necessary to deal with the stockpile.

 

I expect 2018 Chapada copper production to easily surpass 130 million pounds.

 

Yamana will spend C$8 million in 2018 exploring and drilling Chapada. In 2017 the exploration program added 315 million pounds of copper to reserves, and 410 million pounds to measured & indicated resources. The gains from exploration far outpaced the losses from mining depletion. A very successful program.

[linealdin]

http://www.cbc.ca/news/canada/newfoundland-labrador/coady-mining-alderon-lab-west-china-hebei-1.4633060

 

Siobhan Coady, natural resources minister, with some very positive comments on Alderon and the trip to China. She attended meetings with senior executives from HBIS and with Chinese financial institutions. The trip cost the province C$10K but Coady thinks it was worth it to promote the iron ore opportunities in Labrador.

 

"What you're seeing really is the rebounding of the iron ore industry and great opportunity, so I would think Alderon will be able to convince investors to start that project."

 

 

[nostradamus]

http://www.alderonironore.com/index.php/news/2018/475-alderon-engages-bba-inc-to-prepare-updated-bankable-feasibility-study-underpinning-the-focus-on-project-financing-2

 

Alderon Engages BBA, Inc. to Prepare Updated Bankable Feasibility Study Underpinning the Focus on Project Financing

 

VANCOUVER, BRITISH COLUMBIA, Alderon Iron Ore Corp. (TSX: IRON) ("Alderon" or the “Company”) is pleased to announce that it has engaged BBA, Inc. (“BBA”) to update the Feasibility Study (“FS”) on the Rose Deposit of the Kamistiatusset (“Kami”) Iron Ore Property in Western Labrador. This FS will underpin Alderon’s renewed focus on project financing.

 

Alderon has retained BBA, headquartered in Montreal, Quebec, to lead the study with input from other engineering and consulting firms including Golder Associates, Duro Felguera Mining and Handling, and GEMTEC Consulting Engineers and Scientists (“GEMTEC”). The updated study will build on the previous FS dated December 17, 2012, the most recent Preliminary Economic Assessment (“PEA”) dated November 7, 2017, as well as the detailed engineering carried out between 2013 and 2015. The flowsheet and product characteristics will remain unchanged and focus will be on tailings management facility, market analysis, capital and operating expenditures and updated reserve estimates.

 

“This marks the beginning of another significant milestone for Alderon as we prepare to update our bankable feasibility study”, stated Tayfun Eldem, President and CEO of Alderon, “this study will further demonstrate the robust economics and strong fundamentals that the Kami Project possesses and will bring us closer to advancing the project into production.”

 

Given the advanced state of the detailed engineering and recent studies, the Company expects to release the results of the FS and file a technical report prepared in accordance with National Instrument (NI) 43-101 in Q4 2018.

 

Kami Project Updated Preliminary Economic Assessment Highlights

•US$1,781 million Net Present Value (“NPV”) at 8% discount rate

•25.7% Internal Rate of Return (“IRR”) and 3.7 projected years to payback

•US$999.4 million total estimated capital cost

•US$29.94/dmt average estimated operating costs (loaded in ship Port of Sept-Îles)

 

The PEA Highlights are taken from the technical report entitled “Update to the Re-Scoped Preliminary Economic Assessment of the Kamistiatusset (Kami) Iron Ore Property, Labrador”, dated effective November 7, 2017 (the “Updated PEA”). The Updated PEA was prepared under the supervision of Mr. Angelo Grandillo, P.Eng, of BBA, a Qualified Person as defined by NI 43-101, with contributions from GEMTEC and Watts, Griffis and McOuat Limited (“WGM”). Mr. Grandillo is a Qualified Person as defined by NI 43-101 and Mr. Grandillo is independent of Alderon. Mr. Grandillo has reviewed and approved the technical information contained in the PEA Highlights. For further information please refer to the Updated PEA that is available on SEDAR at www.sedar.com.

 

[linealdin]

http://www.steelonthenet.com/kb/history-hebei.html

 

Interesting tidbit from this history of Hebei Steel:

 

“2013: In search with Alderon for 3rd partner for Kami mine project.”

 

I never knew this. Hebei owns 20% of Alderon equity, as well as 25% of Kami on a project level. There is certainly room to bring in another Asian steelmaker on the Kami project level. The owners of Kami are responsible for their shares of project capex.

 

This is the easiest way for Alderon management to chop down its proportional financing requirements.

 

Hebei probably has a choice of either upping their project stake to ~50%, or letting another steelmaker participate. I think this is what the recent China trip was trying to sell.

 

More conjecture: The payment Alderon would receive by giving up more Kami project equity is likely to be higher than the current C$40 million market cap of the company.