linealdin Posted June 14, 2018 Share Posted June 14, 2018 So Tacora, if successful, will raise US$290 million (including all options). About 29% of Kami’s US$999.4 million capex. If you compare the Wabush and Kami projects Kami is more economic: much higher NPV, much lower operating costs, much lower royalty. If Tacora can raise US$290 million why can’t Kami raise US$500 million? The money is out there. SAF Metals & Mining Finance, which committed a big chunk of financing for Wabush, is just one private equity fund with deep pockets. There are many others. Komatsu and Caterpillar want to sell trucks to Alderon, too. The key for Alderon is bringing up the steelmaker ownership of Kami on the project level from 25% to 50%. Let the steelmakers finance $500 million in capex with their Chinese banks, while Alderon sources another $500 million from private equity, banks, construction equipment companies, royalty companies, government funds, and a big public equity financing. It’s doable. Link to comment Share on other sites More sharing options...
nostradamus Posted June 15, 2018 Share Posted June 15, 2018 The key for Alderon is bringing up the steelmaker ownership of Kami on the project level from 25% to 50%. Let the steelmakers finance $500 million in capex with their Chinese banks, while Alderon sources another $500 million from private equity, banks, construction equipment companies, royalty companies, government funds, and a big public equity financing. Its doable. But isn't all of the production already due to go Hebei and Glencore? If so, I don't see why another steelmaker would want to get involved. (Champion up 8% to 1.48 AUD on the ASX.) N. Link to comment Share on other sites More sharing options...
linealdin Posted June 15, 2018 Share Posted June 15, 2018 The key for Alderon is bringing up the steelmaker ownership of Kami on the project level from 25% to 50%. Let the steelmakers finance $500 million in capex with their Chinese banks, while Alderon sources another $500 million from private equity, banks, construction equipment companies, royalty companies, government funds, and a big public equity financing. It’s doable. But isn't all of the production already due to go Hebei and Glencore? If so, I don't see why another steelmaker would want to get involved. (Champion up 8% to 1.48 AUD on the ASX.) N. Project ownership can be consciously uncoupled from offtake. None of the project owners of Bloom Lake Phase 1 have offtake rights. The 100% offtaker of the restart of Wabush, Cargill, has no project ownership. LIF owns 15% of IOC on project level but no offtake rights. Separate interests. Link to comment Share on other sites More sharing options...
nostradamus Posted June 15, 2018 Share Posted June 15, 2018 I'm just trying to work out why a steelmaker (rather than any other type of investor) would want to finance an iron ore mine if it does not get the direct benefits of the iron produced by the mine. I guess they likely know more about likely future demand than the average investor and they stand to benefit indirectly by the additional supply of iron ore pushing down prices. But, would another steelmaker really want to help finance production that the know is going straight to Hebei and Glencore? Sorry if these are dumb questions... N. Link to comment Share on other sites More sharing options...
linealdin Posted June 15, 2018 Share Posted June 15, 2018 Alderon and Hebei tried to bring in another partner on the Kami project level in 2013: https://www.steelonthenet.com/kb/history-hebei.html They were unsuccessful in that search. But I think they will try again this cycle. Hebei owns 60% of the offtake of the first 8 million tonnes. Glencore owns 40%. Right now with no production those parties own 60% and 40% of nothing. If another steelmaker willing to make a large investment on the project level (and agree to finance their share of capex) can be found I’m sure all parties would be willing to give them a share of the off-take. Everybody wins if the mine is built. The off take for a potential Phase 2 expansion can also be offered to new strategic partners. Link to comment Share on other sites More sharing options...
linealdin Posted June 15, 2018 Share Posted June 15, 2018 Example: Asian Steelmaker X decides it needs to secure a long term source of high quality, low deleterious element iron ore. Steelmaker X offers US$75 million for a 25% stake in the Kami project. It promises to be responsible for securing its US$250 million portion of capex (just like Hebei). It also demands a 25% portion of Phase 1 offtake. Hebei’s offtake rights would be reduced to 45%, while Glencore’s offtake would be reduced to 30%. Alderon compensates these parties for their Phase 1 reductions by offering each of them 25% of Phase 2 off-take. Why would any if the existing stakeholders turn this deal down? Finding a 3rd partner greatly increases the chances Kami is actually built in this cycle. Link to comment Share on other sites More sharing options...
nostradamus Posted June 15, 2018 Share Posted June 15, 2018 Makes sense. Thanks linealdin. Link to comment Share on other sites More sharing options...
linealdin Posted June 18, 2018 Share Posted June 18, 2018 http://www.allegiancecoal.com.au/irm/PDF/1399_0/UpdatedTenasProjectResourceStatementandPitModels Allegiance significantly decreases strip ratio but increases the mineable amount of ore. Feasibility to be delivered soon for the Phase 1 small mine. Should be excellent economics. Link to comment Share on other sites More sharing options...
linealdin Posted June 18, 2018 Share Posted June 18, 2018 New video showing the whole Bloom Lake operation. Impressive industrial operation. The second processing plant (70% complete) looks larger than the first plant. It won’t go unused for long. Link to comment Share on other sites More sharing options...
linealdin Posted June 18, 2018 Share Posted June 18, 2018 https://ceo.ca/@bullmarketmove/the-next-bull-market-move-interview-matt-geiger-managing-partner-at-mjg-capital-june-2018 This fund manager is avoiding the high multiples of the big boy gold royalty companies like Franco-Nevada. Focusing on best of breed non-precious metals royalty companies like Altius. Believes some of these companies will eventually approach the 20x multiples we see with large precious metals royalty companies as the investment community falls increasingly in love with the royalty model. Link to comment Share on other sites More sharing options...
linealdin Posted June 18, 2018 Share Posted June 18, 2018 https://www.juniorminingnetwork.com/junior-miner-news/press-releases/2558-tsx-venture/sic/48369-sokoman-iron-mobilizes-drill-to-commence-phase-i-drilling-at-moosehead-gold-project-central-newfoundland.html Sokoman starts drilling Moosehead Gold. 2000 meter program, 12 to 15 holes, over 5 to 6 weeks. Link to comment Share on other sites More sharing options...
linealdin Posted June 18, 2018 Share Posted June 18, 2018 Newsletter writer Byron King recommends Avrupa Minerals. Stock jumps from 8 cents to 12 cents. King teases a picture of Alvito drill core with visible copper and gold to his subscribers. We should have some initial Alvito assay results by the end of the month. IOCG targets are elephants. Link to comment Share on other sites More sharing options...
nostradamus Posted June 18, 2018 Share Posted June 18, 2018 http://www.excelsiormining.com/index.php/news/news-2018/545-excelsior-mining-provides-permitting-update-june182018 Excelsior said back in March that they expect the final permits by the end of Q2 2018. They’ve issued a press release today to say they STILL expect it by the end of Q2. Comical. They are going to look pretty stupid if they don’t get it. Link to comment Share on other sites More sharing options...
linealdin Posted June 18, 2018 Share Posted June 18, 2018 http://www.labradorironore.com/News-Releases/Press-Release-Details/2018/Labrador-Iron-Ore-Royalty-Corporation---Shareholder-Meeting-to-Amend-Business-Restrictions/default.aspx LIF calls special meeting to change corporate bylaws so it can more easily purchase royalties. Recently it came across an attractive opportunity to buy a producing base metal royalty. How does Altius vote? It owns 5% of LIF. Link to comment Share on other sites More sharing options...
linealdin Posted June 18, 2018 Share Posted June 18, 2018 http://www.excelsiormining.com/index.php/news/news-2018/545-excelsior-mining-provides-permitting-update-june182018 Excelsior said back in March that they expect the final permits by the end of Q2 2018. They’ve issued a press release today to say they STILL expect it by the end of Q2. Comical. They are going to look pretty stupid if they don’t get it. Trump admin agencies like the EPA are supposed to be cutting red tape and regulations. In reality they are understaffed and incompetent. This is a mining-friendly administration? Sucking the life out of these projects. Latest Excelsior presentation has a slide showing the Phase 2 expansion to 75 million pounds per annum to be “optional.” I will be very pleased to see an immediate transition from 25 million pounds to 125 million pounds. If the pilot stage technology is successful the market should be hungry to finance a bigger copper project. Link to comment Share on other sites More sharing options...
bizaro86 Posted June 18, 2018 Share Posted June 18, 2018 http://www.labradorironore.com/News-Releases/Press-Release-Details/2018/Labrador-Iron-Ore-Royalty-Corporation---Shareholder-Meeting-to-Amend-Business-Restrictions/default.aspx LIF calls special meeting to change corporate bylaws so it can more easily purchase royalties. Recently it came across an attractive opportunity to buy a producing base metal royalty. How does Altius vote? It owns 5% of LIF. I'll be voting no, I'd rather they stick to their knitting. I imagine ALS will vote no, not much incentive for them to create a competitor in buying base metal royalties. Link to comment Share on other sites More sharing options...
mikek Posted June 19, 2018 Share Posted June 19, 2018 I think Altius will be voting no but unfortunately I think it might pass this time. I think Osisko was a key to getting it turned down last time and they are no longer shareholders. The competition doesn't concern me very much, the bigger concern is LIF buying something dumb and hurting Altius by messing up the royalty and future cash flow. Link to comment Share on other sites More sharing options...
bizaro86 Posted June 19, 2018 Share Posted June 19, 2018 How close was it last time? I would think most of the owners here are dividend investors, who should be worried about management going on an empire building spree with debt/equity. It's hard for me to imagine they'll buy anything of similar quality to what they own now. Link to comment Share on other sites More sharing options...
mikek Posted June 19, 2018 Share Posted June 19, 2018 I thought it was pretty close but I could be completely wrong since it was awhile ago. I agree 100 percent, no way they get anything like what they currently have in where we are in the cycle. Hopefully shareholders are smart enough to reject this horrible idea. Management in LIF should be kicked to the curb, shareholders already told them to collect their cushy salaries and stop with their fantastic ideas. I wonder if Altius would sell if this passes, I probably would if I were Altius because I wouldn't trust that management to be buying royalties which is unfortunate because I really like that royalty. I honestly feel LIF is an amazing royalty and likely to grow in the future due to increased production over time and pellet prices are here to stay I feel. Unfortunately if it passes that becomes a big concern. Link to comment Share on other sites More sharing options...
linealdin Posted June 19, 2018 Share Posted June 19, 2018 I believe Osisko supported (pushed for) the proposed change at LIF in 2015. They sold their position partially because the change didn’t pass. That’s what one article implied. The vote was close last time. Will probably pass this time. I assume the major LIF investors have been canvassed already and they support the change. If the bylaw amendment passes I don’t expect a huge buying spree. Vast majority of the revenue will remain iron ore. Maybe 10% of their royalty revenue becomes base metals. A little diversification. Link to comment Share on other sites More sharing options...
linealdin Posted June 19, 2018 Share Posted June 19, 2018 http://www.aethonminerals.com/storage/media-reports/altius-spins-out-copper-play-aethon-minerals-reprint-1529386327.pdf Great Northern Miner article on Aethon. Plan is to joint venture or sell some of the gold-focused Maricunga projects to majors. Davies doesn’t want to blow the budget up spending on high altitude, high expense projects. (I think of how EMU has spent millions exploring Vidalita with little return.) Davies, unlike most junior exploration CEO’s, has extensive high level experience working at mining majors. Those relationships hopefully pay off. Wants Aethon focused on Arcas copper project and potential new acquisitions from private landowners. Aethon has met with 40 private landowners in recent months. Llahuin was a cheap option that will be drilled within first 6 month option (which only costs $100k). C$500k to C$750k exploration program at Arcas begins in September 2018 (spring in Chile). Link to comment Share on other sites More sharing options...
linealdin Posted June 19, 2018 Share Posted June 19, 2018 http://www.labradorironore.com/News-Releases/Press-Release-Details/2018/Labrador-Iron-Ore-Royalty-Corporation---Cash-Dividend-for-the-Second-Quarter-of-2018---025-Per-Common-Share/default.aspx LIF pays a 25 cent dividend for Q2. C$788k to Altius. Playing it safe since production just restarted. But Q3 should be a doozy. 75 cents at least. IOC has 8 bulk carriers scheduled for June 22nd through July 1st. Revenue will be high with the extraordinary premiums for high grade ore. Link to comment Share on other sites More sharing options...
linealdin Posted June 19, 2018 Share Posted June 19, 2018 https://wcsecure.weblink.com.au/pdf/PXX/01991521.pdf PolarX has begun drilling Zackly. 2 drills, 5000 meter program. Some pictures of the exploration drill camp. Looks like an expensive endeavor: helicopter, 30 to 40 tents, tons of equipment, multiple temporary offices and core sheds. I don’t want that bill. Link to comment Share on other sites More sharing options...
linealdin Posted June 19, 2018 Share Posted June 19, 2018 The proposed rule changes for LIF would make it a more interesting takeover or investment target for the big royalty companies (like Osisko or Franco-Nevada, which has recently expressed interest in iron ore royalties). The big players would want maximum flexibility to reinvest the LIF iron ore revenue. And if they make a takeover offer they would prefer a 66% approval hurdle versus the current 75% hurdle. The changes open up the field to more competitors besides the natural takeover candidate Rio Tinto. Link to comment Share on other sites More sharing options...
linealdin Posted June 19, 2018 Share Posted June 19, 2018 http://www.aethonminerals.com/storage/presentations/aethon-minerals-june-18-2018-1529326069.pdf New Aethon presentation. The newly acquired Llahuin project is low elevation with easy access and existing infrastructure. This matters in Chile, where a high elevation, remote project like EMU’s Vidalita can be a budget breaker with a very short exploration season. Slide 12 shows all the majors with land surrounding Aethon’s Arcas project: Codelco, BHP, Freeport-McMoran, Antofagasta, Anglo-American, etc. The right neighborhood to have property in. Link to comment Share on other sites More sharing options...
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