ALS.TO - Altius Minerals

[Liberty]

You guys can save your energy jumping to linealdin's defense, I'm not attacking him. I've questioned some of his assumptions and played devil's advocate a bit in a thread that was quite one-sided up to that point, and I've pointed out that it was interesting that a business with half-a-billion of market cap had more newsflow than a few trillions of market cap. If you feel that's attacking, you need to recalibrate.

[linealdin]

https://ceo.ca/@nasdaq/midland-intersects-numerous-high-grade-copper-bearing

 

First assay results at Mythril. No discovery hole but plenty of interesting copper/gold intercepts. It looks to be a large alteration system so they are still on the hunt.

 

5000 meter follow up drill program begins in June. Altius holds a 1% royalty on Mythril and an equity position in Midland.

[linealdin]

Champion up to C$2.67 a share. It would make sense for Altius to cash in their final 2.5 million Champion share position for C$6.7 million. Use it to cut down some more debt.

 

These outsize profits (1700% gains) for early Champion strategic investors should encourage potential strategic investors in Alderon. Greed will overcome fear.

[linealdin]

https://www.google.com/amp/s/thestarphoenix.com/news/local-news/nutrien-to-cut-80-jobs-from-vanscoy-potash-mine/amp

 

Nutrien cuts capacity of the Vanscoy mine from 2.2 to 1.7 MTA and lays off 80 workers. I believe that 500,000 tonnes of production will move to a lower cost operation, specifically Rocanville.

 

Vanscoy royalty revenue is a rounding error for Altius (C$34K in Q1). Rocanville brought Altius C$2.895 million royalty revenue in Q1. Rocanville produced 5.22 million tonnes 2018. Nutrien says 2019 operational capacity for Rocanville is 5.4 million tonnes, while nameplate capacity is 6.5 million tonnes.

 

It’s a gradual process but Nutrien will eventually reach nameplate capacity. In addition, local news indicates Nutrien is doing feasibility studies on “upgrading or potentially replacing the original mill” at Rocanville: https://www.world-spectator.com/commentary2.php?id=79

 

A new mill certainly means more production. Ultra long life, low cost resources lead to capacity expansions. It’s playing out at Rocanville.

 

[linealdin]

https://www.adiaresources.com/pdf/2019-05-14_NR_ADIA.pdf

 

Adia Resources update:

 

1) 1258 meters completed in 3 drill holes. DeBeers is doing the microdiamond analysis on the 20kg of samples as their equity participation in the projects. Sounds like they intersected a lot of the diamond-bearing rock.

 

2) Gravity survey completed. Drilling and gravity survey indicate a 3 kilometer ore body with a 315 meter thickness.

 

4) Beach sand sampling at surface found another 170 micro-diamonds. DeBeers did the analysis.

 

5) C$1.96 million in cash at the end of March.

[linealdin]

https://www.google.com/amp/s/mobile.reuters.com/article/amp/idUSKCN1SY1W4

 

Nutrien starting to talk about their expansion plans. Restarting 5 MTA of idled capacity could bring production to 18 MTA, while a cheap brownfield expansion could raise production to 23 MTA.

 

Nutrien is basically threatening to double production as BHP considers whether to greenlight Jansen.

 

Actions speak louder than words. Best thing for Nutrien is to unleash the idled capacity immediately to drive down the potash price and discourage new competitors.

[linealdin]

https://www.google.com/amp/s/www.hannaherald.com/news/local-news/sheerness-power-plant-sold-to-us-company/amp

 

ATCO sells their control stake in Sheerness and the Paintearth related power plants to a US private equity group.

 

This might turn out to be good news. The private equity group won’t face the same pressure to convert the coal plants to natural gas as the publicly traded utilities felt. The Sheerness royalty might survive a few years beyond 2022. ATCO had announced a very accelerated conversion schedule. Now the schedule is up in the air.

[linealdin]

Altius only bought about C$50K worth of shares in the recent Adventus financing at 88 cents, letting their position be diluted. They let Nobis, Greenstone, RCF and Silver Wheaton do the heavy lifting. Adventus has run up to C$1.10 per share. The Altius position in Adventus is now worth C$17.2 million. It’s going to be a very big win if Kargl-Simard can put Curipamba into production.

[petec]

Best thing for Nutrien is to unleash the idled capacity immediately to drive down the potash price and discourage new competitors.

 

Pity no-one explained that basic concept to the morons that ran Potash Corp 12 years ago!

[linealdin]

https://ceo.ca/@newswire/champion-iron-announces-refinancing-to-optimize-capital

 

Champion refinances debt and acquires 100% of Bloom Lake on the project level. Stock hits a high of C$3.10 in early trading. Altius only has 2.5 million shares left of Champion stock but business success in the Labrador Trough is always a good thing.

[petec]

https://ceo.ca/@newswire/champion-iron-announces-refinancing-to-optimize-capital

 

Champion refinances debt and acquires 100% of Bloom Lake on the project level. Stock hits a high of C$3.10 in early trading. Altius only has 2.5 million shares left of Champion stock but business success in the Labrador Trough is always a good thing.

 

Their timing in selling (most of) this was diabolical. I get that they don't feel they should hold naked equities in size but if you don't want equity upside why have a convert?

[linealdin]

https://ceo.ca/@newswire/champion-iron-announces-refinancing-to-optimize-capital

 

Champion refinances debt and acquires 100% of Bloom Lake on the project level. Stock hits a high of C$3.10 in early trading. Altius only has 2.5 million shares left of Champion stock but business success in the Labrador Trough is always a good thing.

 

Their timing in selling (most of) this was diabolical. I get that they don't feel they should hold naked equities in size but if you don't want equity upside why have a convert?

 

The convertible debenture had an important clause giving Altius first dibs on a potential Bloom Lake royalty financing. The equity and debt markets opened up for Champion at the right time and they managed to avoid selling a royalty to Altius.

 

Altius basically turned C$10 million into C$21 million (including the 8% interest payments) in a little less than 2 years. It could have been more but sometimes you have to take profits. They had pressing needs for the cash: buying the US$10 million Curipamba royalty happened at the same time the first Champion equity tranche was sold.

[TwoCitiesCapital]

https://ceo.ca/@newswire/champion-iron-announces-refinancing-to-optimize-capital

 

Champion refinances debt and acquires 100% of Bloom Lake on the project level. Stock hits a high of C$3.10 in early trading. Altius only has 2.5 million shares left of Champion stock but business success in the Labrador Trough is always a good thing.

 

Their timing in selling (most of) this was diabolical. I get that they don't feel they should hold naked equities in size but if you don't want equity upside why have a convert?

 

The convertible debenture had an important clause giving Altius first dibs on a potential Bloom Lake royalty financing. The equity and debt markets opened up for Champion at the right time and they managed to avoid selling a royalty to Altius.

 

Altius basically turned C$10 million into C$21 million (including the 8% interest payments) in a little less than 2 years. It could have been more but sometimes you have to take profits. They had pressing needs for the cash: buying the US$10 million Curipamba royalty happened at the same time the first Champion equity tranche was sold.

 

I agree with this. It's obviously a shame in hindsight that Altius didn't hold on until $3, but that's in hindsight. We had the opposite complaint about regarding Alderon a few years back where they held on too long waiting for the outcome they wanted.

 

If Altius is entering equities tactically for control or for strategic royalty negotiations, I'm happy to have them exit with a 100% profit once that has been satisfied even if it means leaving money on the table. Particularly given where we're at in the economic cycle - having extra liquidity isn't a bad thing.

[bizaro86]

Yeah, I would definitely rather they sell too soon rather than too late. Champion is now a producing mine, which is a bit different than the explorers that make up most of their portfolio, but I'd still rather have the bird in the hand. Reinvest in a new long term royalty - the market discounts the junior investments anyway, imo.

[petec]

I am playing devil's advocate here rather than anything else, but they better than anyone have the skills to value this and they have clearly sold well below value. I have no issue with this per se - they're an exploration and royalty company, not value investors in producing equities. However I do think there's a case to sell slowly rather than fast in a situation like that. It is pretty extraordinary to sell something you know backwards weeks before it doubles. Exiting at at even pace over 6-12 months might have been smarter.

[mikek]

"Teck also announced today that it will not proceed with the MacKenzie Redcap extension at the Cardinal River steelmaking coal operation. The operation is expected to close in the second half of 2020. "

 

Looks like Altius once again gets some bad news, not much seems to go right for these guys, it's no wonder the stock has been such a joke with the way things have turned out with a lot of their "estimates." The coal segment of the royalty purchase sure turned out bad.  I also don't see anything really happening on the PG portfolio, none of the properties that they have partnered out and have been drilled are turning into anything.  I don't consider Adventus, Allegiance coal or Min to be truly PG properties since they didn't stake those properties.  Those were all royalties that were purchased, Allegiance coal was bought out of the CDP deal so I don't consider that a true PG royalty created.  Only hope they really have would be a miracle with Alderon but that is beyond a hail marry, especially with the way things are between China and Canada right now.  Looks like it's going to be dead money for quite awhile here.

 

I agree Petec, selling a large percentage of the CIA shares at 1.40 was laughable, if anyone should have known the value of that area it should have been Altius, the company that should have made out like bandits with this iron ore surge doesn't look like they are going to be rewarded much at all.

 

That is another 3-4 million that is now gone by 2020.

[Gamecock-YT]

I guess the cycle really has turned, been a long while since people were complaining about selling out of positions too soon...

[TwoCitiesCapital]

I guess the cycle really has turned, been a long while since people were complaining about selling out of positions too soon...

 

Lol

[linealdin]

Altius’s PG business acquires exploration land and related royalties at an early stage. They don’t necessarily stake the land directly themselves. For example, Altius didn’t stake the land that’s become the Adia diamond project. But it’s certainly a PG project.

 

http://www.rengold.com/i/pdf/2019-05-29-ren-nr-5t3o0.pdf

 

Anglogold makes another property payment to Renaissance. Silicon is probably a discovery. I would classify it as a PG project since the royalty was acquired at an early stage (Callinan generation/staking deal with Renaissance) and Altius has supported Ren with some equity infusions and technical advice.

 

A lot of drilling to come. 5000 meters at Mythril, 5000 meters at Sail Pond, bulk sampling at Adia etc. A couple of real discoveries will be made during this cycle.

[linealdin]

New Found Gold no longer has the Sail Pond project. Altius and Sail Pond have been scrubbed from the NFG website.

 

NFG spent about C$250K on exploration at Sail Pond but they didn’t go public by agreed deadline. I believe that’s why Altius has the property back.

[linealdin]

http://altiusminerals.com/projects/junior-equities

 

Junior equity portfolio update as of May 30th, 2019. Altius sold completely out of positions in Avrupa Minerals, Alba, Cartier Resources, Medgold, Millrock, Pan Global and Radius Gold.

 

Selling equity to pay off debt. This cycle Altius will err on the side of selling out too early rather than too late. See substantial sales from the Excelsior (timed perfectly) and Champion (profitable but early) positions.

[linealdin]

https://wcsecure.weblink.com.au/pdf/PXX/02111310.pdf

 

Lundin Mining makes a big investment in PolarX to finance the drilling program for a large copper/gold porphyry. Altius owns a 2% royalty on gold and a 1% royalty on any copper found. Altius-related projects continue to attract investment from large mining groups.

 

*

 

Midland has begun its 6000 to 7000 meter June/July drill program at Mythril (financed by BHP):

 

https://www.streetwisereports.com/article/2019/06/01/midland-results-not-blockbuster-but-encouraging.html

 

CEO Gino Roger believes first round drill program results showed the copper fertility of the land. Only 8% to 10% of the land package drilled so far. Many more targets.

[linealdin]

http://www.labradorironore.com/News-Releases/Press-Release-Details/2019/Labrador-Iron-Ore-Royalty-Corporation---Cash-Dividends-for-the-Second-Quarter-of-2019---090-Per-Common-Share-Comprised-of-a-Regular-Dividend-of-025-and-a-Special-Dividend-of-065/default.aspx

 

LIF declares a 90 cent dividend for Q2. C$3.629 million in Q2 revenue for Altius.

[linealdin]

https://www.globenewswire.com/news-release/2019/06/18/1870341/0/en/Capital-Power-accelerates-plans-for-natural-gas-capability-at-the-Genesee-facility.html

 

Capital Power is converting to dual fuel capability at the Genesee complex over the next couple of years. The power plants are currently 20% dual fuel, moving to 40%, then 100%.

 

They seem to be committing to mining coal for a portion of their fuel needs through December 2029: “The coal operations at the Genesee facility are currently planned to continue up to December 2029.”

 

Dual fuel conversion gives Capital Power the political cover to keep burning a significant amount of coal. I expect coal fuel costs to be lower than natural gas fuel costs. I see all 3 Genesee plants running at about 50% coal right through December 31st, 2029. Another 10.75 years of Genesee coal royalty flowing to Altius.

 

(I remember a ludicrous assertion on this board that because Capital Power was building a gas line to the Genesee complex the coal royalty could be extinguished by December 2020. That prediction was quite a bit off!)

[Gamecock-YT]

https://www.ft.com/content/488c5486-966f-11e9-9573-ee5cbb98ed36

 

Supply squeeze in iron ore catches miners on the hop

 

 

Dam disaster, bad weather and booming steel demand push prices to five-year high

 

 

 

“The market is telling us we need alternatives,” said Graeme Train, senior economist at Trafigura, one of the world’s biggest commodity traders. “What you are seeing in the price now is this risk premium for a commodity that has become regionally constrained. There is so much supply coming from two countries [Australia and Brazil] and very little from anywhere else.”