ALS.TO - Altius Minerals

[linealdin]

I hold out hope of a modest legal settlement from Alberta. They’ve paid out C$1.36 billion already to Capital Power, Transalta and ATCO. Another C$15 million to Altius isn’t going to hurt the provincial coffers that much more. Small change to avoid prolonged litigation and a trial.

[linealdin]

What’s going to move Altius’s equity in the medium-term (next 5 years):

 

1) Will a serious bull market run happen in the next 5 years? $5 copper, $1600 gold, $2 zinc, US$100 per tonne for 62% Fe iron ore plus quality premiums, that sort of bull.

 

2) If the answer is YES, then how many monetization events can Altius participate in and how much cash can they squeeze out? The flip side of being a contrarian is that you have to sell like Ron Popeil at the top of the market.

 

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I think there are enough assets there to take out C$500 million in cash from the market in a real bull market.

 

Examples:

 

If $5 copper happens I’m certain Karl-Simard will have Curipamba and other assets developed and sold to a major for hundreds of millions (US dollars). That’s his investment banking skillset. Altius is going to take a big cut of the payout.

 

If Evrim has discovered something valuable at Cuale they will sell it during a bull market. High sulphidation gold deposits are highly prized. Altius is going to take a big cut of any sale.

 

Selling the LIF equity, purchased for C$50 million, for C$200 million, if iron ore goes crazy again, or if IOC proceeds with major expansion plans.

 

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In terms of the PG business equity sales will far precede any royalty revenue from projects that become mines. Royalties from a project like Cuale will be 10 or 15 years down the line. Equity cash outs will happen whenever the bull market gets crazy again. Not too long from now.

 

[linealdin]

Adventus Q2 financials are on their website. Cash declined from C$7.8 million at the end of Q1 to C$4.3 million at the end of Q2. Subsequent to the quarter they raised C$10 million from the Silver Wheaton-led placement.

 

Cash was mostly spent on Curipamba, with a little bit spent on Pijili and Santiago, the other Ecuador properties. Not much spent in Ireland in the quarter. Curipamba doesn’t seem like a very expensive place to explore or drill. Good to have a local partner to handle the practicalities.

[linealdin]

 

John Kaiser of Discovery Watch talks up the Wolfden deposit at 12:35 of this video. 10K meters of drilling complete, another 10K in drilling to come. Next round will allocate two or three thousand meters towards exploration targets (as opposed to infill of the historic deposit).

 

Kaiser brings up the possibility that the ore could be transported by train to the existing facilities at Empire State Mine, owned by Titan Mining. He estimates the ore is worth US$350 to $450 per tonne.

 

Altius owns a chunk of Wolfden equity and a 1.35% royalty on the Mt. Pickett deposit.

[linealdin]

https://markets.businessinsider.com/news/stocks/antler-gold-closes-financings-1027484519

 

Antler Gold does a good job of closing its private placement of C$678K. They had C$983K in cash at the end of March. Well-funded for a fall drilling program. Another 3000 meters would be excellent.

 

Altius owns 20% of Antler and holds royalties on its Newfoundland gold projects, which are on the same trend as Moosehead Gold.

[bizaro86]

I hold out hope of a modest legal settlement from Alberta. They’ve paid out C$1.36 billion already to Capital Power, Transalta and ATCO. Another C$15 million to Altius isn’t going to hurt the provincial coffers that much more. Small change to avoid prolonged litigation and a trial.

 

I doubt anyone pays that. The govt would rather fight about it than have it be a news story that they caved to coal owners, and I doubt very much they lose a lawsuit.

 

ALS wasn't expropriated. They are still own that land and coal, and they are welcome to mine it. It can't be burned in AB, but they could export it, or use it as a product input, or really anything else. Even if they don't, ALS didn't put in any of the mining capital, so they don't have stranded assets.

 

I'll be really disappointed if they spend too much money on legal fees. You want to sabre rattle and try to shake out a settlement fine, but don't pay for court. I was involved in a similar case involving oilsands rights that were sterilized by a change in AB govt policy. My employer at the time spent a bunch of money on legal fees for opinions from multiple well connected top AB firms, and concluded it couldn't be won. This is an even weaker set of facts, imo.

[linealdin]

The very fact the province paid C$1.36 billion to the coal power plant operators creates the door opening for Altius. The power plant operators weren’t really expropriated either. They still own the plants and can use them to burn natural gas, biomass or whatever they want after 2030.

 

At trial the government will have to justify why they favored one group of stakeholders over another. Tricky.

[linealdin]

https://hotcopper.com.au/documentdownload?id=uOMxKKzFkiWRTLKhOROKAxjvTDYC6gi5zhOZsO9hke92GA%3D%3D

 

PolarX hits another nice drill hole in Alaska: 9.3 meters of 3.3% copper, 2.3 g/t gold, and 19.7 g/t silver. The skarn deposit is becoming larger. Helicopter-borne magnetic survey over the whole property begins in early September, searching for a big buried porphyry deposit.

 

Altius owns a 2% royalty on precious metals, and 1% on the copper.

[linealdin]

https://newfoundgold.ca/wp-content/uploads/2018/07/New-Found-Gold.pdf

 

New Found Gold presentation. IPO planned for October 2018, priced at 60 cents. The 12 million shares issued to Altius in exchange for the Sail Pond property will be worth C$7.2 million. Nice score!

 

Altius will also make a lead order in the IPO for C$1 million in shares.

 

Altius is currently completing C$250K in early stage work funded by NFG. IP geophysical survey planned for Sail Pond in Q3 2018. 3500 meter drill program planned for Q1 2019.

 

 

[linealdin]

https://www.icis.com/resources/news/2018/08/27/10254065/belarus-bpc-signs-potash-deal-with-india-s-ipl-at-50-tonne-hike/

 

Belarus Potash signs a deal to supply India potash for US$290 per tonne from September 2018 through June 2019. A US$50 per tonne increase from the previous contract.  I expect Canpotex to follow with pricing around US$300 per tonne for the Chinese and Indian markets.

 

Average realized potash prices for Altius the last few quarters:

 

Q2 2018: C$329, or US$254 per tonne

Q1 2018: C$314, or US$242 per tonne

Two months ended December 2017: C$306, or US$236 per tonne

Quarter ended October 2017: C$269, or US$208 per tonne

 

Altius should get a 20% increase in realized potash prices once the new contract prices kick in. Around C$4.8 million a quarter, or C$19.2 million in annual potash royalties.

 

Altius signed the McChip and Liberty deals just as the potash market started to make a big move up. Perfect timing.

[linealdin]

http://www.globalminingobserver.com/news-in-brief-202

 

BaseCore Metals hasn’t been able to close any royalty deals because its parent Glencore wants offtake rights packaged up with the royalties, and miners aren’t willing to surrender the offtake. Altius mentioned:

 

“Yet deals have been conspicuously absent. The showstopper, sources say, is the new unit's internal structure. To justify Glencore's trip into the royalty market, its head office in Switzerland has told BaseCore to lock-in marketing rights. In addition to royalties, it wants to swallow the right to buy a mine's concentrate, pumping tonnage through Glencore's trading desks.

    “That makes deals difficult to close. Offtake rights are a valuable piece of the puzzle when it comes to mine owners getting debt funding, leaving Glencore's new royalty group short of its first transaction.

    “The market is meanwhile moving: the sector's two dominant players, Franco-Nevada and Wheaton Precious, have been expanding in recent months into royalties outside of precious metals, pocketing agreements in cobalt, oil and natural gas. Newfoundland's Altius Minerals and New York-based Orion have also been snapping-up royalties in potash and battery metals, closing $2.55bn of royalty deals outside of gold and silver, according to new figures.

    ‘Things are changing rapidly,’ says an insider in Canada at one of the largest streaming groups.”

[linealdin]

Alderon gave Glencore 40% of its projected offtake for nothing. In this hot market for royalties Alderon could have packaged up a royalty and offtake and sold it to BaseCore Metals for a significant return. Another Morabito mistake.

[linealdin]

LIF rises to a high of C$26.28 today. Altius position worth C$82.78 million at that level.

 

Investors anticipating announcement of a special dividend for Q3. LIF usually announces the dividend around September 15th.

 

Should be in the range of 60 to 80 cents per share.

[linealdin]

http://s1.q4cdn.com/337868174/files/doc_presentations/2018/01/2017-LIORC-Presentation_2017_Scotia_One-on-One_Final.pdf

 

Slide 12 of this LIF presentation shows the small footprint of IOC’s reserves and resources compared to the extent of the exploration land IOC and Rio Tinto have locked up near the mine. Much of that is LIF royalty land, but some of it is Altius royalty land (like the Goethite Bay discovery).

 

Stranded assets like Kami or Julienne Lake are also candidates for acquisition eventually if they aren’t developed by independent parties. Kami by itself, with its total 1.8 billion tonnes of resources could probably extend IOC’s operations by 15 to 20 years.

 

These are the reasons I’m confident IOC will still be in operation in the next century.

 

 

[linealdin]

The hard part for base/bulk mines is being built and actually reaching production. These are major industrial operations requiring many billions in capex and thousands of skilled workers.

 

Once built they will just extend and extend their mine lives. It’s easy to upgrade near-mine resources or acquire competitors with stranded assets.

 

Altius probably made a mistake letting a partner have a minority percentage of the Liberty potash deal for C$10 million. Does Altius really have a better use for that C$10 million they didn’t spend on the producing Liberty royalties? Saving it for project development finance instead? Development in base/bulk is much riskier.

[linealdin]

https://www.icis.com/resources/news/2018/08/28/10254377/mop-market-heats-up-as-india-settles-potash-deal/

 

Speculation that China is backed into a corner with the Indian potash deal setting a US$50 increase as a benchmark. The China price will be at least US$280, up from US$230 the year before. The China price has traditionally come in around US$10 lower than the negotiated Indian potash price.

 

Tight supply conditions for the end-users outside of the Big 2 of China/India.

[linealdin]

https://ceo.ca/@nasdaq/evrim-resources-welcomes-strategic-investment-from

 

Newmont makes a strategic investment in Evrim of C$7.3 million at C$1.50 a share, 46% above the current market price. 80% of the proceeeds must be used on Cuale exploration.

 

Secures for Newmont the right to make a first offer for Cuale if Evrim chooses to divest. Newmont and Evrim form a joint technical committee to advance Cuale.

 

This validates the potential for Evrim. Newmont is spending a lot of cash just to be first in line to make an offer if there’s a sales process for Cuale.

 

Cuale’s going to sell for US hundreds of millions if the drilling proves the theory.

[linealdin]

Altius’s 11.465 million share equity position in Evrim cost ~C$2.5 million, around 22 cents per share. The key was acquiring Callinan’s position in Evrim for only 17 cents a share. 2 million warrants exercisable at 50 cents will amplify gains.

 

Newmont paid C$7.3 million for only 4.84 million shares, no warrants.

 

It’s better to be in early.

[linealdin]

Christian Kargl-Simard of Adventus Zinc just came back from a week marketing Adventus to potential strategic partners in South Korea. The South Korean trading houses and industrial end-users (smelters) have interest in the copper and zinc at Curipamba.

[linealdin]

https://mobile.twitter.com/mjmorabito/status/1030917400672198656

 

Morabito talking reckless about Kami on Twitter: “I have been at this for almost 10 years. The mine has 30 years of life once started. My colleagues and I will get this moving come hell or high water. The wind is starting to fill the sails again.”

[linealdin]

http://www.northernminer.com/news/newmont-makes-strategic-investment-in-evrim-resources/1003799000/

 

Northern Miner article on the Evrim/Newmont deal:

 

Paddy Nicol, Evrim’s president and CEO, said the company signed confidentiality agreements and completed site visits with seven different companies, including Newmont.

 

“It came down to a matter of negotiations,” he says in a telephone interview from Vancouver. “Obviously we have a great working relationship with them [Newmont], but they demonstrated they really wanted to be involved in the company and provide funding to see where we could go with Cuale and for that they also got a right of first offer on the project, but there’s no hooks or any sort of rights on the project specifically other than the right of first offer.”

. . .

 

In addition to the technical work Evrim has completed on the project, it has also secured a five-year agreement with the local community for access to the property. “That is a big deal,” Nicol says, “and we’re happy to have gotten that at this stage of the game…it puts both parties on an equal footing going forward in terms of information exchange and transparency.”

[linealdin]

 

Recent interview with Kargl-Simard of Adventus Zinc. Key takeaways:

 

1) The higher grade “starter” resource at Curipamba, 8 million tonnes at 8% copper equivalent, is the highest grade undeveloped copper project on the planet. Infill drilling is currently pulling out the best results of any base metals project globally.

 

2) That starter resource is being fast-tracked for production. PEA in Q1 2019, then a full feasibility study for the largest operation possible, producing between 33 to 55 million pounds of copper per year, at negligible cash costs.

 

3) He hopes regional exploration at Curipamba, based upon an airborne geophysical survey, will increase the total mineral inventory to 20 million tonnes or more. H2 2018 will focus on exploration rather than infill drilling. Sesmo Sur is targeted as a potential epithermal gold deposit.

 

4) Santiago and Pijili currently being permitted for drill programs in early 2019.

[linealdin]

http://www.metalsnews.com/Metals+News/MetalsNews/Dr.+Allen+Alper,+PhD+Economic+Geology+and+Petrology,+Columbia+University,+NYC,+USA/FEATURED1231611/Aethon+Minerals+Corp+(TSXV+AET)+A+CanadianBased+CopperFocused+Exploration+Company+Positioned+for+Growth+in+a+To.htm

 

Interview with Robert Davies of Aethon Minerals at the Sprott Conference in July:

 

1) Focusing on acquiring land from private owners, many of whom have been paying annual fees for years or decades, with no return. Aethon can offer them a positive cash return on their longterm investment. The Llanos property, for example, was acquired from a private family. Land consolidation efforts are ongoing.

 

2) Plan is for Aethon to be lean and low cost for the next 3 to 5 years.

 

3) Drilling at Llanos currently. Early stage ground exploration at Arcas.

[linealdin]

http://www.metalsnews.com/t1233628i

 

Interview with Bob Felder of Renaissance Gold. Discusses the results from the Silicon project (Altius 1.5% royalty):

 

“Sure. I'll start with what's on tap for drilling this year? Our Silicon project is in the Bare Mountain District in southern Nevada, which is the same area where Corvus Gold and Northern Empire have been drilling and reporting good results. (Note: Coeur announced on August 2 that they have entered into a definitive agreement to acquire Northern Empire). We were able to go in there and stake open ground in 2015 during a market downturn.

 

“We staked a very large alteration system that was fairly gold poor, but we developed a model that indicated that we were up high in the system. We attracted AngloGold Ashanti into that deal and they completed a drilling program this winter and spring. We're not able to talk about the results yet except in general terms. What I can tell you, is they drilled six core holes. They also did some geophysics, mapping and some geochemical work. Those six core holes provided enough encouragement for them to continue the option on the project and the continuation of that option included them paying us $200,000 US in June. So we can say that they had sufficient encouragement to continue forward, in a very, very busy district, with a lot going on. So we're quite encouraged by their results and hopefully there'll be more news to disclose on that in the coming months.”

 

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More news to disclose in coming months? Sounds like Anglogold is keeping the Silicon drill results under wraps until they can consolidate the Bare Mountain district.

 

 

[mugwump]

more assays from sokoman

https://ceo.ca/@fscwire/sokoman-receives-western-trend-assays-at-moosehead