linealdin Posted July 6, 2018 Share Posted July 6, 2018 Current iron ore cape size shipping rates: Sept-Iles to Europe: US$8 per tonne Sept-Iles to Asia: US$24 per tonne Brazil to Asia: US$18 per tonne Western Australia to Asia: US$7 or US$8 per tonne Significant incentive for Champion to make as many shipments as possible to Europe (as they did recently to Port Talbot, Wales, Port of Gibralter Spain and Rotterdam). Trough ore as a preferred option of European steelmakers? Interesting. The WA shipping advantage vs. Canada is about $16.50 a tonne. Exactly the amount of the alumina penalty advantage Canada has over WA. Trough ore is competitive worldwide. Link to comment Share on other sites More sharing options...
bizaro86 Posted July 6, 2018 Share Posted July 6, 2018 Europe makes a lot of sense for trough ore for sure. There is a bit of European iron ore production (mainly Sweden) but they're net importers, and the big iron ore producers (Brazil/Australia) are farther. In a perfect world ALS facilitates the sale of Alderon to someone who can actually build a mine (IOC? Champion? Tata?) Kami getting built has been the dream around this stock for years. The difference of course is that a few years ago the market was paying up for that option, whereas now its basically free. Link to comment Share on other sites More sharing options...
linealdin Posted July 6, 2018 Share Posted July 6, 2018 Iron ore is the kindergarten of mining. Least complicated processing. No worries about complicated geological structures and underground ventilation or flooding risks. I have no doubt Eldem, given enough financing, can deliver a functional, modern mine on time and on budget. He is very experienced and it ain’t that hard, technically. The mine-building mistakes of Consolidated Thompson won’t be repeated. Alderon CAN build the mine. The hard part is organizing the capital. I believe capital starts flowing towards Alderon over the next 18 months. The most sophisticated resource investors, private equity funds that spend big bucks on due diligence, will conclude Kami’s ore is the perfect ore to bring to the market. Link to comment Share on other sites More sharing options...
bizaro86 Posted July 7, 2018 Share Posted July 7, 2018 I probably should have said "finance a mine" Link to comment Share on other sites More sharing options...
linealdin Posted July 7, 2018 Share Posted July 7, 2018 http://www.kereport.com/wp-content/uploads/2018_05_01-Christian-Kargl-Simard-Adventus-Zinc.mp3 Interview with Adventus’s Kargl-Simard from early May to discuss the infill and Sesmo drill results: 1) Infill results are 3x the grade of the published El Domo resource. Potential for a 10% to 20% increase in grade when the next updated resource is delivered in Q1 2019, bringing the copper equivalency grade to 5% or 6%. Kargl-Simard struggles to recall any base metals drill results this good over the last several years. 2) The Sesmo drill result shows Curipamba could be a gold district with multi-million ounce potential. The Sesmo first drill hole is from surface, 20 meters and excellent grade (6 g/t gold equivalent). If they can add tonnage this will be “pure cash.” 3) Geologists not sure what Curipamba as a district is yet. What is the feeder system? What does it mean that there’s very similar stockwork beneath both El Domo and Sesmo? How do the VMS lenses and the high grade precious metals mineralization tie together? Lots of work to be done but also lots of potential. Link to comment Share on other sites More sharing options...
linealdin Posted July 7, 2018 Share Posted July 7, 2018 Adventus total shares: 15,182,183 Free shares received in exchange for property: 7,570,014 Seed financing at 25 cents: ~4 million shares IPO at 50 cents: ~500k shares Capital raise at 88 cents: 3,068,182 shares Cost basis per share: ~26 cents per share * Participation in the Wheaton-led financing raises the cost basis a few cents, depending on how many shares they subscribe for. Altius is allowing its share position to be diluted (slowly) as each financing is at a higher price. I think they started with 37% of the shares of Adventus. After Wheaton jumps in Altius’s equity stake could be down from the current 26.6% to 25%. This is careful, risk-averse behavior. I doubt Altius will ever allow its cost basis in Adventus to rise above 40 cents per share. The low cost basis is their margin of safety. Link to comment Share on other sites More sharing options...
linealdin Posted July 7, 2018 Share Posted July 7, 2018 Ideally the renewable energy royalties Altius is going to purchase in the next 6 months will enter the pantheon of “forever assets.” At least the size of the Voisey’s Bay royalty (otherwise too small to matter): C$4 million or more annual revenue for the next 50 to 100 years. Link to comment Share on other sites More sharing options...
linealdin Posted July 7, 2018 Share Posted July 7, 2018 https://www.wolfdenresources.com/wp-content/uploads/2018/06/Wolfden-AGM-June-26-2018final.pdf Wolfden AGM presentation. 5700 meters drilled of planned 10,000 meter program. 22 holes so far. New targets generated by IP, EM, VTEM and soil surveys. All new targets will be drilled in coming months. They have about $3 million in cash currently according to management at the AGM. Should be just enough to finish the program. All drill holes assays except for the latest 400 meter drill hole have been released. Resumption of drilling after a 2 month break to perform and process the geophysical surveys. Link to comment Share on other sites More sharing options...
mugwump Posted July 9, 2018 Share Posted July 9, 2018 wolfden drill results https://ceo.ca/@newswire/wolfden-hits-high-grade-mineralization-in-deep-drilling Link to comment Share on other sites More sharing options...
linealdin Posted July 9, 2018 Share Posted July 9, 2018 wolfden drill results https://ceo.ca/@newswire/wolfden-hits-high-grade-mineralization-in-deep-drilling 4.7 meters of 24% zinc, 10% lead, 0.9% copper, 267 g/t silver, 1.6 g/t gold. This is by far the richest mineralization Wolfden has drilled during its 2018 program. Fairly deep at 530 meters but under Maine law only an underground mine can receive a permit. So there's no consideration of an open pit mine. It will all be extracted by underground methods anyway. Link to comment Share on other sites More sharing options...
linealdin Posted July 9, 2018 Share Posted July 9, 2018 http://www.allegiancecoal.com.au/irm/PDF/1408_0/InvestorPresentation New Allegiance presentation. Altius recently bought a 354k more shares of Allegiance to bring their total shareholding to 55,564,278. They are Citicorp Nominee PL on slide 3. They own 12% of Allegiance and are the largest shareholder, by a lot. Tenas project will "almost" be the lowest cost producer on the global seaborne market for met coal at FOB US$55.8 per tonne. The current market price for the Tenas mid-volatile semi-soft coking coal product is US$133.45 per tonne. That's a good-looking margin. Link to comment Share on other sites More sharing options...
netnet Posted July 9, 2018 Share Posted July 9, 2018 Buying shares in a junior is a statistically terrible business. Unless there is some other source of upside, even if Dalton and Co are better than average I'd like to see that avoided. Just because you're smart doesn't mean you should pick something hard to do. Munger says to shoot fish in a barrel by first emptying the barrel of water. Royalties are shooting fish in an empty barrel, investing in juniors is like shooting fish in the ocean. It's very hard, so why do it. The bigger % of the value of ALS in that activity the less happy I am. ??? Huh? Although you are not joking, you should be. This is kind of definition of a false analogy. Because you (and I) and 99% of everyone else can't intelligently invest in junior mining companies does not mean that this is not well within Dalton and Co. circle of competence. This is what they do, when they turn over prospect generating deals for goodness sakes; they evaluate mines and miners every day of the week. This is a mine field they traverse every day (he said tongue firmly planted in cheek.) Link to comment Share on other sites More sharing options...
bizaro86 Posted July 9, 2018 Share Posted July 9, 2018 Buying shares in a junior is a statistically terrible business. Unless there is some other source of upside, even if Dalton and Co are better than average I'd like to see that avoided. Just because you're smart doesn't mean you should pick something hard to do. Munger says to shoot fish in a barrel by first emptying the barrel of water. Royalties are shooting fish in an empty barrel, investing in juniors is like shooting fish in the ocean. It's very hard, so why do it. The bigger % of the value of ALS in that activity the less happy I am. ??? Huh? Although you are not joking, you should be. This is kind of definition of a false analogy. Because you (and I) and 99% of everyone else can't intelligently invest in junior mining companies does not mean that this is not well within Dalton and Co. circle of competence. This is what they do, when they turn over prospect generating deals for goodness sakes; they evaluate mines and miners every day of the week. This is a mine field they traverse every day (he said tongue firmly planted in cheek.) I think Dalton and Co. are very smart and do a good job. I very much look at this as them being investment managers managing my money in this space since I generally don't want to. (Although I'd meet the definition for a qualified person for signing reserve reports). My point is that no matter how smart they are, prospect generation and royalties are structurally advantaged businesses, whereas buying shares in a junior isn't. If they have too much cash, I'd rather see them do buybacks (especially sub $13 CAD) and give me a bigger share of the Potash royalties. If they make straight up purchases of shares part of their model in a bigger way, I'll be happy to back up my opinion by selling you my shares. Link to comment Share on other sites More sharing options...
mugwump Posted July 10, 2018 Share Posted July 10, 2018 altius project generation update https://ceo.ca/@businesswire/altius-provides-2nd-quarter-2018-project-generation-update Link to comment Share on other sites More sharing options...
linealdin Posted July 10, 2018 Share Posted July 10, 2018 Altius hasn’t added any random new names to the PG portfolio since it’s been made public. All the equity purchases have been top-ups, royalty-related or special situation deals: ~$5 million in Champion shares after the debenture deal with Champion, C$1.2 million top-up to Evrim (extraordinary gains on those shares), $5 million taking the Alderon shares off of Liberty Metals, private placement with Canstar after 4 Altius royalty properties were farmed in, etc. Altius is only supporting companies they have pre-existing relationships with. (I don’t understand how the Adventus and Aethon equity top-up investments aren’t royalty-related. Both companies hold significant banks of Altius royalty land and have spent or will spend millions exploring that land. Adventus has spent over C$2.6 million between January 2017 and March 2018 exploring the Altius royalty land and they’ve found a farm-out partner who will spend at least a million drilling 3000 meters at Buchans in 2018. I expect the Irish properties will be drilled by a new funding partner in 2018, too. Adventus has done a great job directly advancing Altius’s royalty interests.) Link to comment Share on other sites More sharing options...
bizaro86 Posted July 10, 2018 Share Posted July 10, 2018 Altius is only supporting companies they have pre-existing relationships with. Do they have a royalty on something owned by constantine? Link to comment Share on other sites More sharing options...
linealdin Posted July 10, 2018 Share Posted July 10, 2018 Altius is only supporting companies they have pre-existing relationships with. Do they have a royalty on something owned by constantine? No, but it is a pre-existing relationship. Constantine has been in the Altius PG portfolio forever. I have to assume Altius likes the flagship Palmer VMS project and CEM management. More importantly Constantine has secured a very deep-pocketed strategic investor in Electrum. Private equity can fund the building of a mine. Link to comment Share on other sites More sharing options...
linealdin Posted July 10, 2018 Share Posted July 10, 2018 altius project generation update https://ceo.ca/@businesswire/altius-provides-2nd-quarter-2018-project-generation-update I like the bump up to C$60.3 million, especially since new investments were balanced by sales. Big moves up by Evrim and Alderon during the quarter. The LIF debenture is worth C$13 million if converted, and the Altius portion of the Aethon shares worth another C$2.7 million. (Some small change in Revelo and EMU shares is also held by the 49% Altius-owned Chilean subsidiaries.) C$76 million total, not including in-the-money warrants. This portfolio is meant to fund all of Altius's project generation business expenses. A strict dividing line between the PG business and the royalties business. Link to comment Share on other sites More sharing options...
linealdin Posted July 10, 2018 Share Posted July 10, 2018 Altius has C$76 million in total PG-related equity and debenture (excluding value of LIF, which is meant to be a semi-permanent royalty). And C$125 million in debt. I'd like to see this "total" PG number surpass the debt in the near future. Link to comment Share on other sites More sharing options...
linealdin Posted July 10, 2018 Share Posted July 10, 2018 https://think.ing.com/articles/iron-ore-grade-is-king-but-the-throne-will-swing/ Excellent analysis by ING of the global iron ore market: "The premium for the higher grades has become wedded to the profits of Chinese steel mills (profits=purchasing power). Thus prices at the higher end can increasingly be found to swing in almost complete disregard for a more tepid over-supply picture set to put a lid on the broader iron ore complex: low grades and perhaps more controversially the same fate holds for benchmark grades (62%) as well." ING is basically claiming that the new iron ore benchmark in the future will be 64%+ Fe. Traders right now want new derivatives to hedge the prices of higher grades. Also discusses heavy alumina penalties and the record-breaking pellet premiums. Every major development in the global iron ore market is favoring the Labrador Trough. Link to comment Share on other sites More sharing options...
linealdin Posted July 10, 2018 Share Posted July 10, 2018 https://www.hellenicshippingnews.com/china-2020-pollution-plan-adds-uncertainty-to-iron-ore-steel-prices-wood-mac/ "China’s import iron ore pellet premiums have surged, with the S&P Global Platts weekly assessment hitting a record $61.95/dry mt on July 4." IOC is running wild in this price environment. Some of their pellet products reach 68% Fe. The premiums are staggering. The port schedule for IOC this month has smaller carriers making 45,000 or 75,000 tonne shipments of pellets to customers. No need for volume discounts on shipping because the premiums are so high. I expect major LIF dividends in Q3 and Q4. Perhaps as much as 80 cents each quarter. LIF hasn't seen this favorable an environment in a long time. Samarco, with its 30 MTA of pellet capacity, isn't going to be back in production until 2020 at the earliest, according to most market observers. No competition for LIF's pellets for the next 1.5 years or so. In 2016 and 2017 IOC's pellet sales were 55% of total sales. IOC's target for 2018 is for pellets to be 60% of total sales. If they hit that target it should make a difference to LIF's royalty revenue. Also, we should start seeing an appreciable revenue contribution from rail haulage charges for Bloom Lake. IOC is charging Champion around US$13.50 a tonne. 7.4 million tonnes annually x US$13.50 = US$100 million or C$131.2 million in annual revenue. That will matter. Link to comment Share on other sites More sharing options...
linealdin Posted July 10, 2018 Share Posted July 10, 2018 https://www.prnewswire.com/news-releases/the-societe-ferroviaire-et-portuaire-de-pointe-noire-announces-a-call-for-projects-to-relaunch-the-pointe-noire-pellet-plant-in-sept-iles-614282853.html The old Cliffs pellet plant is still for sale in Sept-Iles. One of the players in the region is going to grab it. Pellet premiums are too attractive to pass. Link to comment Share on other sites More sharing options...
linealdin Posted July 10, 2018 Share Posted July 10, 2018 https://marketrealist.com/2018/07/potash-prices-stay-high Strong uptrend in potash prices continues. Noticeable change in all markets from the end of March to the end of June. We should have the preliminary Q2 royalty numbers in a few days for Altius. I think the total potash revenue, with the Liberty potash acquisition fully integrated, will be close to C$5 million. Altius to receive C$20 million in annual potash revenue if these market prices hold. Link to comment Share on other sites More sharing options...
linealdin Posted July 10, 2018 Share Posted July 10, 2018 For Altius Q2 I expect final revenue of C$18.5 million. Potash and Chapada outperform. Have to wait until Q3 or Q4 for the C$20 million quarter I've wanted for a long time. Link to comment Share on other sites More sharing options...
linealdin Posted July 11, 2018 Share Posted July 11, 2018 http://aethonminerals.com/storage/presentations/aethon-minerals-july-2018-1531323750.pdf New Aethon Minerals presentation. Moving very quickly at Llanos project. Completed mapping, chip and channel sampling, ground magnetics and IP surveys. Initial 4 hole, 1000 meter drill program will begin in mid-July to try to find the buried copper-gold porphyry system. Assay results for the first 4 holes will determine if they want to continue beyond the 6 month option, which has only cost $100k so far. Very smart option deal structure. Cut losses if drill holes are dry. Enjoy huge upside if they find the theorized copper-gold system. Chip and channel sampling will start at Arcas in August (Altius 1.5% royalty). Aethon evaluating JV partnership opportunities for Arcas. If Aethon can convince a partner to spend a few million on Arcas then I support that. I don't care who spends the money as long as the money is spent on Altius royalty land. Aethon is only trading at $5 million enterprise value ($13 million market cap but $8 million in cash). Huge upside if they hit good holes at Llanos. Link to comment Share on other sites More sharing options...
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