Guest Dazel Posted March 15, 2013 Share Posted March 15, 2013 Congrats to the optimistic. Dazel. Link to comment Share on other sites More sharing options...
Guest Dazel Posted March 15, 2013 Share Posted March 15, 2013 As we know this is huge news for Altius...but more importantly to us is it allows them to move on to what we think will create other cash streams...they are liquid and ready to take advantage of the carnage in the resource sector. We expect them to do exceptional things as they have in the past. Congrats to Brian and his team and Alderon for this exciting accomplishment...you deserve it for all your hard work! Dazel. Link to comment Share on other sites More sharing options...
no_free_lunch Posted March 16, 2013 Share Posted March 16, 2013 Very good news indeed. If you go back and look at the stock price in comparison to the timing of the news release there was about an hour+ period where there was very little movement on Altius. This in spite of the news release removing one of the major concerns on the investment. Had Hebei pulled out, in this environment, who knows where the funding would have came from, when and at what cost. Anyways, for about an hour you could get Altius within a couple percent of the pre-release price. After that it started marching up as analysts had a chance to review and pass the word on. Very interesting. Link to comment Share on other sites More sharing options...
LTVALUE Posted March 16, 2013 Share Posted March 16, 2013 Brian Dalton interview at Memorial University of Newfoundland's 48th annual business day: http://www.vocm.com/newsarticle.asp?mn=2&ID=32073&latest=1 Many irons in the fire for Altius shareholders!! Link to comment Share on other sites More sharing options...
Guest Dazel Posted March 16, 2013 Share Posted March 16, 2013 Altius is unknown to analysts (there is not a single analyst covering them!) and the investing public has no idea who they are so I would not waste too much time trying to figure out their share price movements. That is the reason I started this thread...I think that will change going forward. This is global news as you know and it will attract attention. Hebei is the second largest steel producer in the world....Hebei is now almost a quarter of a billion in and has gone through a tremendous amount of red tape to get the deal done. Why would they do this if iron ore prices and "their" demand are going to fall apart? Because Hebei needs and wants the iron ore...they have done their due diligence and have spoken with their pocket book. They will drive production to 16m tonnes because they need it... This is worth about $60m a year to Altius at $115... Alderon is now a billion tonne resource that is going to head to production...this makes it a global player. To put this in perspective arcelormittal sold their 15% stake in the Labrador trough for $1.1b...this values their 15m tonne per year production at over $7b. This was negotiated while iron ore prices were much lower than they are now. http://canadianprivateequity.com/arcelormittal-to-sell-15-of-labrador-trough-assets-to-posco-and-china-steel-for-1-1-billion/2013/01/02/ Dazel. Link to comment Share on other sites More sharing options...
no_free_lunch Posted March 16, 2013 Share Posted March 16, 2013 Dazel, I guess I wasn't clear enough on my argument. Basically, there was a near-arbitrage opportunity on altius yesterday after the announcement. I went back and looked and it was actually only about 15 or 16 minutes but during that time window alderon was up, the deal was done and altius hadn't moved. I know you are looking at the big picture and thinking of multiples. That is the correct way to think. But you had for those 15 minutes the chance to make a gain for very little risk. I just don't see those opportunities very often. As far as the long-term implications it certainly settles some issues I had with the investment. I still view iron as a big question mark but even at $70-80 a tonne altius would be underpriced currently. My main risk factor, beyond the iron price, was that without Hebei they might have had to have resorted to lesser terms to get financing and watered down altius equity stake. With Hebei financing done I am a lot more bullish. At this point, I feel that cash + alderon equity + discounted royalty gets you the altius prospecting business / other investments for very cheap if not free. Link to comment Share on other sites More sharing options...
Guest Dazel Posted March 16, 2013 Share Posted March 16, 2013 No_free_lunch, I got ya. I think you may see more of those opportunities...Alderon is pretty liquid compared to Altius....and the U.S listing complicates things for Altius and Alderon as well. Not sure why they bother...very little volume there. They should follow Fairfax and get rid of them. Dazel. Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted March 16, 2013 Share Posted March 16, 2013 Alderon still needs financing. They are only part of the way there. The US listing is to help Alderon sell stock to US investors. Link to comment Share on other sites More sharing options...
beerbaron Posted March 16, 2013 Share Posted March 16, 2013 Alderon still needs financing. They are only part of the way there. The US listing is to help Alderon sell stock to US investors. How hard is it to issue 800M of junk bond in the current market environment? BeerBaron Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted March 16, 2013 Share Posted March 16, 2013 It's very difficult for juniors to raise capital right now since their share prices have been crushed. The TSX Venture exchange is a rough proxy for juniors (most though not all stocks on the TSXV are junior miners). It's roughly half of what it was in 2011... 2/3rds of what it was in 2007. That's what I would call a crash. I don't think that there is much demand for junk bonds on development/exploration stage miners... though I don't know the market that well. I don't recall a lot of miners raising junk bonds, unless they are backed by some silly government program (where some government agency is practically doing the lending). 2- Alderon is hoping that Hebei can tap Chinese banks for financing. I don't understand the politics of state-controlled banks so I don't know how that works. You can bet that Alderon will pursue that option, since government entities (anywhere in the world) tend to lend at rates that are too low. It's very attractive financing if you can get it. Link to comment Share on other sites More sharing options...
Green King Posted March 17, 2013 Share Posted March 17, 2013 from what i experienced its pretty much ok as long as it follows government policy and meets the model (or data) requirements. They are producing some funny money there in China. :) Link to comment Share on other sites More sharing options...
Guest Dazel Posted March 17, 2013 Share Posted March 17, 2013 Alderon does need any financing for a long time...they will be opportunistic with their connection to Hebei which really is a big deal...Hebei is a partner and a large owner of Alderon, it is in their best interest for Alderon to get to 16 m tonnes of production. However, the next financing will come from off take agreements for future production...with Hebei as a partner they will have to get the okay for who takes the rest of production in my opinion...who would not want to partner with Hebei? They will have many options for global steel producers for off take agreements. The Hebei deal being completed is just absolutely huge for Alderon and Altius...it puts them both in a different tier...the financing will be there now...last week it was questionable...with Hebei's stamp of approval we are on our way to production. It was worth the wait. Dazel Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted March 17, 2013 Share Posted March 17, 2013 Alderon does need any financing for a long time What are you talking about? Right now they do not have enough money to build a mine. The sooner they get financing the better because money now is better than money in the future (the present value of future cash flows). It was worth the wait. It was not worth the wait... extending options is like giving away free money. Hebei following through on its investment is definitely bullish for Alderon. But Alderon will still need financing. Alderon needing financing is not necessarily a bad thing. Don't be shocked when Alderon works very hard at promoting the stock. If their share price is a lot higher, expect to see a secondary offering. Debt would be good too. Everybody at Alderon (Stan Bharti and company, Altius, Hebei) wants to see the mine financed. Because Altius and Hebei own shares, they don't want to see their shares be diluted if stock is sold at a very low price. But that's why they protect themselves with seats on the board of directors (I can't remember if Hebei has seats). from what i experienced its pretty much ok as long as it follows government policy and meets the model (or data) requirements. There is a lot of corruption in China so I'm not sure how state-owned entities there work. However, I suppose this can only work to Alderon's benefit. Alderon's assets are in Canada and subject to Canadian laws and politics... immune to all the egregious stuff that happens in China (like Chinese banks participating in the reverse merger accounting frauds). Link to comment Share on other sites More sharing options...
Guest Dazel Posted March 17, 2013 Share Posted March 17, 2013 It's a Value Trap, Not sure if you read my posts...Your responses do not make a lot of sense...it is Saturday night...so I will leave it there. I said the next payment was going to be an off take...of course they want financing!!!!!!! I said they would be opportunistic. "It was not worth the wait?!!" what are you taking about present value cash-flow. Your third statement makes absolutely no sense. Dazel. Link to comment Share on other sites More sharing options...
Guest Dazel Posted March 17, 2013 Share Posted March 17, 2013 Hebei steel sometime ago nominated 2 directors. Stan Bharti is not on the board of directors. Here is a list.... http://alderonironore.com/corporate/board_directors/ I appreciate all of the feedback and participation on this thread. I have started repeating myself to the point nausium...all the facts are here... Altius is an investment, a great company that was largely going on noticed. I have done all I can to educate and explain our position that this company was unique and being compared to other speculative mining companies. They do not need anymore explaining. I will monitor the thread for something new or interesting...or a question I have not answered before but for the most part I will keep away...Altius and Alderon are set up for the future. Disclosure: we have only added to our position over 3 years...and we intend to make a lot of money as we continue to view Altius as a great company with special assets and excellent management... Good luck to all...we are optimistic as you already know. Dazel. Link to comment Share on other sites More sharing options...
original mungerville Posted March 17, 2013 Share Posted March 17, 2013 Dazel, Congratulations, with the Hebei financing done this certainly changes the risk/return profile significantly for Altius. I think your main problem now will be calculating all your quarterly gains going forward! Cheers Link to comment Share on other sites More sharing options...
Guest Dazel Posted March 19, 2013 Share Posted March 19, 2013 Thanks Original Mungerville, Some the Fairfax money we made years ago is now in Altius....I appreciate your input back then...when the world was against us! Used to feel a bit like that here at Altius but things have changed with the Hebei deal as you know....I will leave you with this from Altius' earnings today...it is a hint for the future. " The corporation is encouraged by the ongoing decline in market based Valuation of mineral related assets as this Presents an improved opportunity for the corporations royalty acquisition goals." Be greedy when others are fearful. Dazel. Link to comment Share on other sites More sharing options...
biaggio Posted March 20, 2013 Share Posted March 20, 2013 http://altiusminerals.com/uploads/PDAC-2013-CW.pdf I think this is an updated presentation from company. Looks like 2016 is the year to look forward to when they project royalty revenue of $30 million per year on a market cap of $315 million less $150 million in net cash. Link to comment Share on other sites More sharing options...
Phaceliacapital Posted March 20, 2013 Share Posted March 20, 2013 Lastly there are two notable developments among the Antipodeans. First is the forecasts for iron ore prices. One major investment house cut their forecasts to $139 a tonne from $144 average for this year. The main considerations were moderating demand in the face of softer steel production in China. In contrast, the Australian government raised its forecast to $119 from $106 a tonne forecast last December. Separately, Australia reported a 1% decline in merchandise imports. We suspect that poor weather and the Chinese New Year distortions have skewed the data. Link to comment Share on other sites More sharing options...
original mungerville Posted March 20, 2013 Share Posted March 20, 2013 Dazel, I am not a huge fan of investing in industrial metal miners but thinking long-term if I want a certain percentage of my portfolio tied to mining its going to be through royalties, and Altius at this price with their royalty focus is quite a good long-term deal. Thanks so much for the great idea. I also hope we invest in the future in similarly great ideas like we did in the past with Fairfax and now with Altius. Cheers Link to comment Share on other sites More sharing options...
Liberty Posted March 21, 2013 Share Posted March 21, 2013 Mr. Market can be so weird at times. Both ADV and ALS are more or less back to where they were before the announcement. Link to comment Share on other sites More sharing options...
Liberty Posted March 22, 2013 Share Posted March 22, 2013 http://www.alderonironore.com/_resources/news/ADVNR20130322.pdf Alderon Acknowledges the Assistance of the Federal Government Link to comment Share on other sites More sharing options...
no_free_lunch Posted March 26, 2013 Share Posted March 26, 2013 This is a bit of yesterdays news but came across an article that iron prices are on a bit of a slide, with long-term forecasts dropping. This is of course a recipe for a price slide. Australia's Bureau of Resources and Energy Economics says prices will average about $US90 a tonne by 2018. Goldman says the average will be about $US139 a tonne this calendar year after weather-related production setbacks in the Pilbara and Brazil, but has cut its forecast 2014 price from $US126 a tonne to $US115 a tonne, and lowered its 2015 price forecast from $US90 a tonne to $US80 a tonne. Its longer-term price projection is $US88 a tonne, landed in China. Given that iron ore costs about $US20 a tonne to rail, load and ship to the Chinese steel mills, the only local iron ore miners that will be clearly profitable at that price are Rio, which has a cash cost of about $US25 a tonne, and BHP, which has a cash production cost of about $US30 a tonne. Fortescue has a cash production cost of just over $US50 a tonne, and would be somewhere either side of break-even, depending on how successful it is in offloading infrastructure assets, pulling its debt load down, and pushing its cash cost down as new lower-cost production comes on stream. http://www.theage.com.au/business/iron-ore-glut-will-send-prices-south-20130320-2gfy1.html This is why it is so important that Alderon cost structure really does come in at that $40 range. Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted March 26, 2013 Share Posted March 26, 2013 The mining analysts have been predicting lower iron ore and gold prices for years, yet they were wrong year after year after year. Eventually they will get lucky and be right. If they are skilled at predicting future iron ore prices, how could they have been wrong for several years? *I don't really know where iron ore prices are headed. I think that mining costs will definitely go up. pushing its cash cost down as new lower-cost production comes on stream. Usually you try to mine the lowest-cost ore first. For most mines, you mine the highest-margin ore first and therefore a mine's profitability will slowly drop as time progresses. Sometimes you can't get at the highest-margin/highest-grade ore because there is other ore in the way. It is rare for a mine's costs to go down unless the mine is in its startup phase where they are figuring everything out. This is why it is so important that Alderon cost structure really does come in at that $40 range. Do you seriously think that costs in the $40 range will happen? That is a fantasy that Alderon is trying to sell investors. BBA did the technical report for Alderon and Bloom Lake/Consolidated Thompson. Their technical reports are written for naive investors and are a joke. Read them and then look at Cliffs figures for Bloom Lake. Altius is undervalued. But it's not as undervalued as before, that is why they are slowing down their share repurchases. Kami will likely become a mine but it is not a sure thing. It still needs financing. Link to comment Share on other sites More sharing options...
no_free_lunch Posted March 26, 2013 Share Posted March 26, 2013 I certainly have my suspicions on costs being that low. Where do you put them at? Link to comment Share on other sites More sharing options...
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