ALS.TO - Altius Minerals

[bizaro86]

Do you mind sharing where you found that? I couldn't get the link to work.

[mikek]

 

Maybe through this link. The first 40 minutes is pretty normal stuff but the q and a was where some new stuff was. Got the feeling that the trial with the Alberta government is currently in process because he really couldn't say much at this second. Personally, don't think they will win but if they even got 25 percent of what they are trying to get it would be a big win for Altius.

 

New shareholder letter on May 12th also. Nothing really new on this letter but good info anyways with Covid 19 going on.

 

http://altiusminerals.com/letter-to-shareholders

[bizaro86]

That worked, thanks!

 

I wish someone would have asked him why they sold their LIF shares. Aside from the timing/pricing of that sale (looks poor, right now) I wouldn't have thought they would have felt they needed capital.

 

His commentary on the renewable royalties was interesting - hopefully they get that spun out sooner rather than later. Would be a big potential catalyst.

 

I also thought it was interesting in the extensive discussion of Alderon going bankrupt there was no mention that they were a co-investor with Sprott in that loan. That makes me think the recovery on the sale of the Kami equity interest won't be very good.

[TwoCitiesCapital]

That worked, thanks!

 

I wish someone would have asked him why they sold their LIF shares. Aside from the timing/pricing of that sale (looks poor, right now) I wouldn't have thought they would have felt they needed capital.

 

His commentary on the renewable royalties was interesting - hopefully they get that spun out sooner rather than later. Would be a big potential catalyst.

 

I also thought it was interesting in the extensive discussion of Alderon going bankrupt there was no mention that they were a co-investor with Sprott in that loan. That makes me think the recovery on the sale of the Kami equity interest won't be very good.

 

The price received, inclusive of the dividends they've had over the past 2 years or so, makes it unlikely the sales were done at a loss.

 

My guess is it was for a number of reasons - 1) additional liquidity due to uncertainty 2) The reduction in dividends paid from IOC reduces the opportunity cost of the sale in the interim and 3) they mentioned that Altius shares was one of the best values they've seen in awhile and 4) Dalton mentioned on the earnings call that they're buying shares in a base metal royalty company @ incredible discounts.

 

Quote from the transcript

 

I've got to basically call it like I see it and not make a suggestion to shareholders that there's all sorts of deal flow coming at us for the types of assets that we're looking for. It's just not the case. The one exception to that, other than getting into the renewable sector where we do see lots of opportunity, is after this little company, which holds a huge portfolio of non-precious metals royalties that's trading at incredible discounts, we're buying as much of that as we can.

 

So maybe Altius' own shares, and this other royalty company, offer better value for the $ than LIF does now that the dividends will be reduced lowering the opportunity cost.

[bizaro86]

I thought that quote was talking about buybacks.

[Williams406]

Share buybacks is how that quote read to me as well.

[mikek]

He definitely was talking about buying back Altius shares. It was a tongue in cheek type of comment but definitely was referring to Altius shares.

[TwoCitiesCapital]

He definitely was talking about buying back Altius shares. It was a tongue in cheek type of comment but definitely was referring to Altius shares.

 

Lol, I guess that went over my head reading it. Scratch a separate royalty purchase from my comments above then

[Liberty]

I think they probably should go private. It's not like they're doing much for public shareholders.

[Thrifty3000]

Management should recognize there are few small cap investors sophisticated enough to appraise their assets. And, they should relax about that.

 

They should do exactly what they’re doing - seize this opportunity to buy back shares at a bargain.

 

Nobody (including Altius’s management) can accurately pinpoint Altius’s value.

 

BUT, we can very roughly and conservatively appraise SOME of Altius’s assets (and all liabilities) and decide to purchase based on a price we get excited about.

 

I break Altius’s valuation into categories like:

 

1. Easiest to appraise: cash and marketable securities (less LIORC)

2. Moderately difficult to appraise: mid-cycle free cash flow from royalties (including LIORC royalties)

3. Too hard to appraise: exploration projects

 

I put a pretty big discount on their equities and royalty cash streams depending on my level of confidence in my evaluation ability. I put a $0 value on exploration and hope to be pleasantly surprised to the tune of a few hundred million in the next decade or so.

 

I’m pretty conservative so I also called Altius’s investor relations and:

 

- asked about cash burn over the next two years (debt servicing, g&a, etc.)

- confirmed things like the coal royalties are fixed price and are for base load power.

 

After all that I assign a price to Altius that I would be excited to own it, and then set a trade trigger in my investment account. I never expect my triggers to hit, but it feels like Christmas morning when they do. After watching and reading Altius reports for 11 years, my triggers for Altius recently hit, and I’m thrilled about the prospect of following the company for years to come.

[Liberty]

I'm actually impressed by how this stock never really goes anywhere. That's a lot more unlikely than either going down or up over time. It's like a weird case of financial homeostasis.

[reader]

Liberty,

 

You're the most prolific contributor on this thread, which is mostly dead and you're not even short AFAIK.

I think that's a bullish signal  :o

 

[Liberty]

Liberty,

 

You're the most prolific contributor on this thread, which is mostly dead and you're not even short AFAIK.

I think that's a bullish signal  :o

 

If I can make it move this easily, then I'm happy to help

[cwericb]

"I'm actually impressed by how this stock never really goes anywhere."

 

I'm not!

 

Then again I am somewhat embarrassed to admit that I am a shareholder.

Liberty if you can advance the share price significantly I might split my profits if there ever will be any. :'(

[Liberty]

"I'm actually impressed by how this stock never really goes anywhere."

 

I'm not!

 

Then again I am somewhat embarrassed to admit that I am a shareholder.

Liberty if you can advance the share price significantly I might split my profits if there ever will be any. :'(

 

Sorry, my powers don't extend that far ¯\_(ツ)_/¯

[reader]

Not to downplay Liberty's stock-kinesis I was trying to pull the straw of the inverse correlation between the length of a thread to the underlying stock performance.

 

 

 

 

 

"I'm actually impressed by how this stock never really goes anywhere."

 

I'm not!

 

Then again I am somewhat embarrassed to admit that I am a shareholder.

Liberty if you can advance the share price significantly I might split my profits if there ever will be any. :'(

 

Sorry, my powers don't extend that far ¯\_(ツ)_/¯

[omagh]

Management should recognize there are few small cap investors sophisticated enough to appraise their assets. And, they should relax about that.

 

They should do exactly what they’re doing - seize this opportunity to buy back shares at a bargain.

 

Nobody (including Altius’s management) can accurately pinpoint Altius’s value.

 

BUT, we can very roughly and conservatively appraise SOME of Altius’s assets (and all liabilities) and decide to purchase based on a price we get excited about.

 

I break Altius’s valuation into categories like:

 

1. Easiest to appraise: cash and marketable securities (less LIORC)

2. Moderately difficult to appraise: mid-cycle free cash flow from royalties (including LIORC royalties)

3. Too hard to appraise: exploration projects

 

I put a pretty big discount on their equities and royalty cash streams depending on my level of confidence in my evaluation ability. I put a $0 value on exploration and hope to be pleasantly surprised to the tune of a few hundred million in the next decade or so.

 

I’m pretty conservative so I also called Altius’s investor relations and:

 

- asked about cash burn over the next two years (debt servicing, g&a, etc.)

- confirmed things like the coal royalties are fixed price and are for base load power.

 

After all that I assign a price to Altius that I would be excited to own it, and then set a trade trigger in my investment account. I never expect my triggers to hit, but it feels like Christmas morning when they do. After watching and reading Altius reports for 11 years, my triggers for Altius recently hit, and I’m thrilled about the prospect of following the company for years to come.

 

T3000...a model using FCF has a higher degree of certainty than a sum-of-the-parts model -- counting cash is easier and more certain than counting assets.  The art in the FCF model is determining a realistic rate of growth and their reinvestment runway.  The SOTP model is probably better for determining the liquidation value and modeling the downside risk.  Another FCF modelling risk for this royalty company is to separate out the return of capital from the return on capital.

[reader]

 

PolarX Limited had held a webinar on the 11th

 

"the JORC resource grade at Zackly is 1.2% Copper and 2.0g/t Gold, with 14g/t Silver."

 

"PolarX intends to commence a ~3,000m (15‐20 shallow holes) drill program at Zackly East in July 2020, following up on the thick, high‐grade gold and copper mineralization intersected by drill holes ZX‐18020 (55m @ 2.8g/t Au + 0.6% Cu) and ZX‐18024 (47m @ 3.1g/t Au + 0.6% Cu)."

 

Forthcoming field season still possible with COVID-19 restrictions

Drilling of the high-grade Zackly East deposit (55m @ 2.8g/t Au + 0.6% Cu) to start in July

Extension of Mars porphyry Cu-Au discovery hole planned later in Q3

Multiple prospective partners undertaking due diligence for earn-in JV on Stellar porphyry project

 

 

https://bit.ly/2N1vaG8

 

 

Altius Royalty on core Stellar claim blocks:

 

2% NSR for precious metals

2% Gross value royalty on U3O8

1% NSR for other metals (including Cu)

 

 

 

[reader]

 

Copper and Iron ore are soaring, Altius  :o

 

On a more serious tone, Q2 PG update is out.

 

 

Altius Provides 2nd Quarter 2020 Project Generation Update

St. John’s - Altius Minerals Corporation (“Altius”) (ALS:TSX) (ATUSF: OTCQX) is pleased to provide an update on its Project Generation (“PG”) business activities and the performance of its related junior equities portfolio for the second quarter of 2020.

 

The market value of the junior equities portfolio was $48.4 million at June 30, 2020 compared to $34 million at March 31, 2020. The increase in the portfolio value during the quarter is consistent with the broader junior mining sector recovery following initial negative market impacts in the first quarter related to the COVID-19 pandemic. During the quarter, sales of equities generated $340,000 in cash proceeds, while new investments required cash of $324,700.  An updated list of the public equity holdings is posted to the Altius website at http://altiusminerals.com/projects/junior-equities.

 

Q2 2020 Portfolio Company and Project Updates

 

During the quarter the Company exchanged its 8.22 million common shares of Antler Gold Inc.  (TSXV: ANTL) in return for the 100% re-acquisition of the Wilding Lake gold project.  The Company has since executed a Letter of Intent for the sale of the project to a third party.

 

Adventus Mining Corporation (TSXV:ADZN) was very active during the quarter with commencement of a US$7 million exploration campaign on June 8, 2020 to include drilling of several targets at its Pijili, Santiago and Curipamba, projects in Ecuador - http://adventusmining.com/news/122545.  Altius retains a 2% NSR on the Curipamba project.

 

Alderon Iron Ore Corp. (TSX:IRON) (“Alderon”) announced that it had defaulted on a US$14 million secured loan as well as the resignation of its board of directors and management group.  On June 17th the Newfoundland and Labrador Supreme Court appointed Deloitte Restructuring Inc.  as receiver of Alderon and the Kami Mine Limited Partnership, with power to sell their assets and property.  Altius retains a 3% gross sales royalty which comprises an interest in land and follows the Kami project into the hands of any purchaser from the receiver. 

 

Evrim Resources Corp. (TSX-V: EVM) (“Evrim”) and Renaissance Gold Inc. (TSX-V:REN) (“Renaissance”) announced a proposed arrangement agreement on June 10th to combine in a merger-of-equals transaction.  Evrim will acquire all of the outstanding common shares of Renaissance in a share exchange transaction to create a new royalty and project generator company to be re-named Orogen Royalties - https://www.evrimresources.com/news/2020/evrim-resources-and-renaissance-gold-combine-to-form-new-royalty-prospect-generator-company/. Under the terms of the agreement, each Renaissance share will be exchanged for 1.2448 Evrim shares, which will result in Renaissance and Evrim shareholders each holding 50% of the issued and outstanding shares of Orogen. Altius will remain the largest shareholder of the combined entity at ~11%. Altius is pleased to see the formation of this unique organic royalty generation company.

 

On June 3rd Renaissance announced that AngloGold Ashanti NA had made the final payment of US$2,400,000 to acquire a 100% interest in the Silicon project, subject to Renaissance’s retention of a 1% NSR royalty on a defined area of interest including the Silicon project.  Altius also retains a 1.5% NSR royalty on the Silicon project.

 

AbraPlata Resource Corp. (TSXV:ABRA ) (“AbraPlata”) announced the recommencement of drilling at the Diablillos silver-gold project and also announced two sperate private placement financings in May and June raising aggregate gross proceeds of $7 million to fully fund its 2020 exploration plans. Altius is a substantial shareholder of AbraPlata through its participation in the joint venture company Mining Equity Fund.

 

Wolfden Resources Corporation (TSXV: WLF) (“Wolfden”) announced the commencement of a 5000 metre drilling program at its Pickett Mountain Project in Maine, USA that is designed to test new targets identified from recent exploration work that represent both potential extensions of its known high-grade polymetallic massive sulphide resource as well as distinct new target areas within the broader project area.  Altius holds a 1.35% GSR royalty with respect to the Pickett Mountain Project.

 

 

[reader]

Altius Reports Second Quarter 2020 Attributable Royalty Revenue of Approximately $13 million.

 

Brian Dalton, CEO, commented, "Perhaps the most positive thing I can say about Q2 is that it is behind us. While we all understand that the world is not yet done dealing with the health and economic impacts of the pandemic, and that uncertainty levels remain generally high, we are encouraged by the resilience being shown by our operators and the potential positive impact that expected widespread infrastructure-based economic stimulus will have on demand for many of our key commodity exposures. This has the potential to be particularly important to Altius given that much of this new investment is expected to be directed towards new infrastructure, supporting acceleration of the key sustainability based macro-transitions – transitions that Altius has been pro-actively and aggressively aligning its royalty portfolio exposure to for the past several years."

 

 

 

 

http://altiusminerals.com/storage/press-releases/2020-07-17-altius-q2-royalty-revenue-final-1594999112.pdf

 

 

[Liberty]

"Altius to Acquire Additional Royalty Interests from Liberty Metals & Mining Holdings, LLC"

 

entered into an agreement with Liberty Metals & Mining Holdings, LLC (“LMM”), to acquire its 44.9% interest in certain royalty based limited partnerships, of which Altius acts as general partner.  Upon closing, Altius’s partnership interests will increase from 52.4% to 97.3%.

 

These limited partnerships hold tonnage-based, cash-flowing royalties relating to coal operations that are predominantly integrated with several Alberta, Canada based electrical generation plants. The underlying electrical generation plants are subject to regulations and/or compensation agreements that require the cessation of coal fuelling by 2030 as part of federal and provincial government policy initiatives. While revenues from the acquired royalty units are expected to decline progressively as the phase out of coal based power generation within Canada continues toward an ultimate deadline of 2030, Altius expects to receive a strongly accretive return on its capital and an enhancement of free cash flow that it intends to allocate towards investment in our long-term renewable energy royalty growth strategy.

 

Under the agreement structure, Altius will acquire a company that holds LMM’s units in the partnerships for C$11.25 million before positive working capital adjustments, which it will fund using existing cash-based liquidity.

 

More coal

 

Brian Dalton, CEO of Altius, commented on the transaction, “This acquisition may seem at first glance to be contradictory to our strategic objective of providing royalty focussed alignment with major sustainability-based growth trends, including the fossil fuel to renewable energy transition.  Three years ago however, rather than choosing to divest our coal royalty interests, we took the decision to proactively allocate remaining revenue from these interests to direct investment in the growth of the renewable energy sector. Divesting would have changed nothing other than the name of the royalty revenue recipient while reinvestment of proceeds into renewable energy developers allowed Altius to become a leader in supporting the sustainability transition - and we have met this goal with actions. At that time, we expected around $100 million in coal-based royalty revenue before scheduled phase outs were complete.  We have since committed this full amount into the innovative funding of wind, solar and hydro based renewable energy projects through our emerging renewable energy royalty subsidiary.  With this partnership consolidation we can now even further accelerate the growth and impact role of Altius Renewable Royalties.”

[mikek]

Yeah but with that purchase price you would be a fool not to do it.

 

I make that deal all day. It's a no brainer. I don't like the coal royalties just as mucH as the next guy but with that price I'm glad they did it.

[StevieV]

Yeah but with that purchase price you would be a fool not to do it.

 

This is the Gennessee coal partnership?  Altius had about $1.3 CAD in Q1 royalty.  This would add about $1.1 million/quarter at that rate.

[mikek]

No this is the entire coal royalty, they can make that investment back in one year

 

4.7 million in the first 6 months is what the royalty earned for altius with a 52.4 percent holding. They are acquiring the other 44.9 percent for 11.25 million Canadian.

[StevieV]

No this is the entire coal royalty, they can make that investment back in one year

 

4.7 million in the first 6 months is what the royalty earned for altius with a 52.4 percent holding. They are acquiring the other 44.9 percent for 11.25 million Canadian.

 

Well then, great.  If Liberty wants to make an uneconomic deal in order to exit the coal space, take it.