ALS.TO - Altius Minerals

[nostradamus]

Does anyone know if there is an easy way to find out what 2260761 Ontario Inc owns?

 

Altius has now invested $30m after putting in an extra $5m last quarter. So far it has a mtm loss of about $3.5m (probably more after the recent sell off).

 

From google searches it seems like it owns 21.38% of Synodon and 7.8% of Kobex minerals. But I am struggling to find out what else it owns. Any help would be much appreciated.

 

(This is the part of the Altius business that I am least happy about - I would rather that they make investments that I am unable to do myself as a private investor, and if they are going to invest my money in publically traded stocks, I would at least like a list of what they have invested in...)

 

N

[ItsAValueTrap]

if they are going to invest my money in publically traded stocks, I would at least like a list of what they have invested in...

Buffett doesn't want people copying his ideas.  I don't think Altius / Cranberry / Paul van Eeden does either...

[Ross812]

Does anyone know if there is an easy way to find out what 2260761 Ontario Inc owns?

 

Altius has now invested $30m after putting in an extra $5m last quarter. So far it has a mtm loss of about $3.5m (probably more after the recent sell off).

 

From google searches it seems like it owns 21.38% of Synodon and 7.8% of Kobex minerals. But I am struggling to find out what else it owns. Any help would be much appreciated.

 

(This is the part of the Altius business that I am least happy about - I would rather that they make investments that I am unable to do myself as a private investor, and if they are going to invest my money in publically traded stocks, I would at least like a list of what they have invested in...)

 

N

 

Ontario Inc. is jointly owned by Altius and Paul Van Eeden (Cranberry Capital). It is a company interested in building equity positions in promising juniors and royalty generators. They acquire enough of their target to get a director on the board, usually Eeden. Ontario Inc. also owns stakes in Miranda Gold and Evrim Metals.

 

I agree with ItsAValueTrap. 2260761 Ontario Inc is the means for Altius to directly benefit from Paul Van Eeden of Cranberry Capital. Altius can fund Paul Van Eeden to go after pitches that may be out of reach for Cranberry Capital. Remember Altius owns ~75% of Ontario Inc and is the key beneficiary of any of their successes while Eeden runs the company and owns the remaining 25%.

[nostradamus]

Thanks Ross812 for the info regarding the holdings of Miranda and Evrim. Do you know how much 2260761 Ontario owns?

 

(I also take your point that Altius and Van Eeden can get a director on the board, and so it is not just about making investments in public companies which I can do myself)

[Ross812]

Thanks Ross812 for the info regarding the holdings of Miranda and Evrim. Do you know how much 2260761 Ontario owns?

 

(I also take your point that Altius and Van Eeden can get a director on the board, and so it is not just about making investments in public companies which I can do myself)

 

He has been a Director at Miranda Gold Corp. since September 26, 2010; Kobex Minerals, Inc. since March 14, 2013; Synodon, Inc., since November 2011 and Evrim Resources Corp. since December 23, 2010. Mr. Van Eeden served as a Director at Avaranta Resources Ltd. since December 23, 2010.

 

The only info I could find on numbers was 175,000 shares of Evrim and 1M shares and 1M warrants of Miranda. I'm sure Ontario Inc. owns more than just this small stake. I would also suspect Ontario Inc. owns some Avaranta Resources as well.

 

This is interesting: Rick Rule owns 12% of Miranda and 10.5% of Evrim.

 

Miranda-  Sprott Asset Management LP    8,988,370    12.16%    New on 12/31/201

Evrim-  Sprott Asset Management LP        2,996,100    10.50%    New  on 03/31/2013

 

 

[nostradamus]

Thanks again Ross812, I may take a closer look at some of these. Kobex has $36m in cash and marketable securities and no debt, but has a market cap of $22m. Seems like Altius is finding ways to make its cash go further...

[Guest Dazel]

http://www.mining.com/chinese-company-begins-construction-of-a-huge-uranium-mine-in-namibia-10880/

 

 

It appears the chinese are not concerned about the present price of uranium...

 

Dazel.

[Blue Macaw]

Hi everyone!

 

New to this board from today atleast when it comes to writing. However I have followed the board for quite some time and I really appreciate your comments, reasearch etc.

 

Altius at these levels is a steal as are many other juniors at the moment. I also own FER, Century Iron which the market value (at times) less than the money they have in the bank and 3 times less book value. Of course if none of these iron deposit would ever get to production then that be the case and the company would be worthless but at these levels....(Joyce lake in production by 2015, small scale hematite DSO, WISCO and Min Metals)

 

If Kami gets going (and I do think it will, even with prices around $100. Cost will be higher than what they got out of BFS) the earnings could reach around 24 million in 2016 or 0,85 dollar per share. With a low p/e of 15 that would make it around 13 CAD/share just from the royalty of Kami. The thing I have been thinking about is if Altius plan to invest in the construction of the mine? They do own 32 something million shares and the CAPEX will be fairly large. So maybe a part of those 150 million they have in the bank might be used to keep their % in the company?

 

Also interesting things ahead are Snelgrove which might be a quite substancial Hemitaite discovery and Julienne lake which I hope will come through with the Chinese partners. The Chinese are everywhere which is very good for the world and the region.

 

Having big hopes when it comes to Chile. It will take some time to build up but the 2 powerhouses in the future when it comes to mining are Peru and Chile. (Hopefully Canada)

 

 

 

 

 

[ItsAValueTrap]

Hebei invested $183M into Alderon.  Alderon's current market cap is around $140M.  This is kind of insane because Hebei owns only a piece of Alderon.  And this is not a stale price either because Hebei's most recent investment was only a few months ago.

 

The thing I have been thinking about is if Altius plan to invest in the construction of the mine?

I think they would prefer to see other people finance the mine.  Once the mine is fully built, I think that it's very likely that Altius will sell its stock.  Alderon's management is TERRIBLE, even by junior mining standards.  Stan Bharti's company is Forbes and Manhattan.  Any company associated with Bharti and F&M usually pays its insiders way, way too much.  Alderon is no exception.  You don't want to own the high-cost guys in a commodity industry.  And Bharti is an idiot who wants to explore in the Democratic Republic of Congo, a country that expropriates assets from foreigners.

Also look at Aberdeen International... it is a vehicle where its shareholders get shafted because it's a F&M company on top of other F&M companies, so shareholders get to pay two sets of fees instead of one.

 

I don't like FER / Century Iron because those companies are black boxes which I can't figure out.  Altius itself isn't as excited about Century Iron's deposit as it is about their Rio Tinto JV and Julienne Lake.  I think it's much simpler just to buy Altius, which invests in juniors through van Eeden / Cranberry Capital anyways.  So you get to buy juniors at a discount via Altius (which trades below what its assets are worth).

[ItsAValueTrap]

Hebei paid C$120M for 25% of Kami.  Therefore, Alderon's share of the Kami project is worth 75% * ($120M / 25%)  or $360M.  Add $120M in cash (plus Alderon's working capital, if you feel like it) and Alderon should be worth at least $480M.

 

$480M versus current market cap of $140M... this is insane?

[Blue Macaw]

Yes, it seems kind of insane. However it did not some time back and Hebei must be wondering what they did wrong. I suppose that is the beauty of entering at the right time.

 

But Alderon needs the Chinese especially now more than anytime. Without them this will not be a producing mine. Not with the financial market we are in. So the key for all juniors now is the finicial situation.

 

Hebei will have to put in approx. 25 % of capex approx $250 million and Alderon $750 million. This will be way too much for Alderon. Of course Hebei owns 20 % of Alderon so some money could come through them. Altius would have to put up their share if they want to keep the % in the company. I think we will be looking into Hebei taking a bigger stake in the Joint venture from 25 % up to 49 % and maybe a larger equity stake as well. This would lessen the burden of having to come up with money. These times ahead will be rough for many of the Juniors.

 

Century Iron might not be a black box but a grey one. Here are some points why I do find them attractive at these prices:

1. Market value of 37 million. Assests roughly 159 million with money in bank 40 million.

2. Partners in Minmetals(Chinese) and Wuhan steel (WISCO)

3. Joint ventures (like Alderon) with WISCO paying up for exploration work to a certain amount for a stake in the joint venture. Therefore no need of money for some time.

4. 6th largest when it comes to attributable resources in the world.

5. Founders and directors owning 33%, Management 23% (parts looked in until producing mine), Wisco and Minmetals 30 %, Public shareholders 14%. Can you say that about Alderon?

6. Nearby production 2015

7. Full moon PEA in Q3. (Very large Taconite discovery)

 

Interesting times ahead. Especially the financial parts of many of these projects.

[Liberty]

May 1, 2013                                                                                               

 

Alderon Iron Ore Corp. (TSX: ADV) (NYSE MKT: AXX) ("Alderon" or the “Company”) is pleased to announce the appointment of Mr. Brian Penney as Chief Operating Officer of Alderon effective immediately. Mr. Penney previously worked for the Iron Ore Company of Canada (“IOC”), a Rio Tinto subsidiary, for more than 15 years. During this period Mr. Penney held many senior roles including General Manager of Processing Operations, General Manager of Mining Operations and General Manager of Integrated Planning. Not only does Mr. Penney have extensive operating experience in iron ore, he also has a great deal of knowledge working within the Labrador Trough.

 

Mr. Penney's twenty years of experience in the mining sector also includes senior operating and environmental positions in the gold industry. He is a professional engineer and holds a Bachelor of Engineering Degree in Metallurgy from the Technical University of Nova Scotia (TUNS).  Mr. Penney is returning to Alderon after spending time as the President & Chief Executive Officer of Ridgemont Iron Ore Corp. Ridgemont has recently announced a transaction whereby all of its common shares will be acquired by a Newfoundland focused gold exploration company.

 

“Brian and I worked together for many years at IOC and Rio Tinto and I am excited to have someone of his calibre re-join the Alderon team to drive the Kami Project straight through to production”, says Tayfun Eldem, President and CEO of Alderon.  “I am pleased that we are adding such expertise to our management team which already has extensive hands-on experience in the Labrador Trough and the iron ore sector. Brian’s rich background and qualifications will be invaluable as we pursue our aggressive plans towards production.” 

[Phaceliacapital]

(CMN) ADV CN: Signs Engineering, Procurement & Construction Mana

gement

 

+------------------------------------------------------------------------------+

 

ADV CN: Signs Engineering, Procurement & Construction Management

2013-05-03 10:38:24.579 GMT

 

ALDERON IRON ORE CORP ("ADV-T;AXX-A")

- Signs Engineering, Procurement & Construction Management

- Agreement

 

    Alderon Iron Ore Corp. ("Alderon"or the "Company")is pleased to

announce it, through The Kami Mine Limited Partnership, has entered into a

definitive Engineering, Procurement and Construction Management Agreement

(the "EPCM Agreement") with WorleyParsons Canada Services Ltd.

("WorleyParsons") who will be the engineering, procurement and construction

management ("EPCM") contractor for the development of the Kami Iron Ore

Project (the "Kami Project"). The budget for the EPCM Agreement with

WorleyParsons is estimated at $92.5 million, which is consistent with the

cost estimate set out in Alderon's Feasibility Study for the Kami Project.

 

        A request for expressions of interest was issued in May 2012 to 10

Engineering & Construction firms and following an extensive evaluation,

WorleyParsons was selected based on their health, safety and environment

("HSE") performance, technical and project management expertise,

Newfoundland & Labrador ("NL") experience, global reputation and financial

and commercial parameters. Alderon announced in November 2012 that it had

entered into an Interim Engineering and Planning Services Agreement (the

"Interim Agreement") with WorleyParsons, which allowed Alderon to continue

to move ahead with detailed engineering. The EPCM Agreement replaces the

Interim Agreement and provides the framework for all of the EPCM services

that WorleyParsons will provide going forward.

 

        "Alderon is looking forward to continuing to work with

WorleyParsons and developing the Kami Project," says Tayfun Eldem,

President and CEO of Alderon. "We were impressed with their commitment to

and performance in workplace health and safety along with their track

record in successful execution of EPCM mega projects in the natural

resources sector."

 

        About Alderon

 

        Alderon is a leading iron ore development company in Canada with

offices in Vancouver, Toronto, Montreal, St. John's and Labrador City. The

Kami Project, owned 75% by Alderon and 25% by Hebei Iron & Steel Group Co.

Ltd. ("HBIS"), is located within Canada's premier iron ore district and is

surrounded by four producing iron ore mines. The Alderon team is comprised

of skilled professionals with significant iron ore expertise to advance

Kami towards production. HBIS is Alderon's strategic partner in the

development of the Kami Project and China's largest steel producer.

[Grenville]

Not sure if this article has been posted before. It talks about the building of a couple of small refineries in North Dakota due to the oil boom there.

 

 

In North Dakota, a Burst of Energy

http://online.wsj.com/article/SB10001424127887324010704578414973536719986.html

[Phaceliacapital]

Despite economic uncertainty on world markets, a Multi-billion dollar development in Labrador remains on track. The Executive Chairman for Alderon Iron Ore Corporation, Mark Morabito of Vancouver, says the outlook for the 1.3-Billion dollar Kami project in Labrador is positive. He says the company expects to be released from the Environmental Assessment process and have all of its construction permits in hand by the 4th quarter of this year. Morabito says this will allow mine construction to begin, which is scheduled to be completed in the second half of 2015. He admits, like every other mineral exploration and development company, Alderon has seen its share price decline with the current difficult economic uncertainties, however the project remains the lowest risk iron ore development company in the Labrador trough. Morabito says Alderon is also in the fortunate position of having secured a partner, Hebei Iron and Steel Group from China, that country's largest steel producer. He says the total investment from Hebei of 182.2-million dollars ensures the long term success of Kami project, as Hebei is committed to purchasing 60 per cent of the annual production

 

 

 

[Blue Macaw]

May 5/13  May 3/13  Altius Minerals Corporation  Direct Ownership  Common Shares  38 - Redemption, retraction, cancellation, repurchase  -80,700   

May 5/13  Apr 30/13  Altius Minerals Corporation  Direct Ownership  Common Shares  10 - Acquisition in the public market  80,700  $10.43

 

And they keep buying shares. Cancelled 80,700. At these prices I find it a good thing they keep buying back shares.

[Guest Dazel]

 

 

We agree...their business prospects continue to get better and the share count continues to drop at these ridiculous prices.

 

 

Dazel.

[Phaceliacapital]

Just to keep the finger on the pulse

 

Century Iron Mines Corporation Files Preliminary Economic Assessment for Its Duncan Lake Iron Project

2013-05-06 20:15:00.501 GMT

 

 

Century Iron Mines Corporation Files Preliminary Economic Assessment for Its

Duncan Lake Iron Project

 

NEWS RELEASE TRANSMITTED BY Marketwired

 

FOR: Century Iron Mines Corporation

 

TSX SYMBOL:  FER

 

May 6, 2013

 

Century Iron Mines Corporation Files Preliminary Economic Assessment for Its

Duncan Lake Iron Project

 

TORONTO, ONTARIO--(Marketwired - May 6, 2013) -

 

THIS PRESS RELEASE IS NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. NEWS

AGENCIES

 

Century Iron Mines Corporation (TSX:FER) ("Century" or "Century

Iron" or the "Company") announced today that subsequent to its

news release dated March 22, 2013, it has filed a Preliminary Economic

Assessment ("PEA") on SEDAR for its Duncan Lake Iron Project. A copy

of the PEA, dated May 6, 2013, is available under Century's SEDAR profile

at www.sedar.com and will be posted on Century's website at

www.centuryiron.com.

 

The Duncan Lake Property

 

The Duncan Lake Property is an advanced exploration stage property comprised of

approximately 534 mining claims covering approximately 25,605.4 hectares in the

western part of the La Grande Greenstone Belt in the James Bay region of Quebec

located approximately 130 kilometres from the East coast of James Bay. The

Duncan Lake Property is the subject of a joint venture agreement between the

Company and Augyva Mining Resources Inc. ("Augyva"). The Company has

a 65% interest in the Duncan Lake Property. Augyva holds the remaining 35%

interest. Additional information regarding the Duncan Lake Property is provided

in the Company's 2012 AIF.

 

About Century

 

Century is an exploration and development company of iron projects in Canada.

It has significant interests in several properties in western Quebec and in the

prolific iron ore-producing region of the Labrador Trough in eastern Quebec and

western Newfoundland & Labrador. Century has two key strategic partners in

WISCO International Resources Development & Investment Limited

("WISCO") and Minmetals Exploration & Development (Luxembourg)

Limited S.ar.l., both state-owned Chinese companies with the financial and

technical resources to assist the Company with funding and technical expertise

for the exploration and development of its projects.

 

Century has interests in the following mineral exploration projects located in

the Provinces of Quebec and Newfoundland and Labrador:

 

/T/

 

--  The Duncan Lake Iron Project in which Century currently has earned a 65%

    interest under an option and joint venture agreement with Augyva Mining

    Resources Inc. (TSX VENTURE:AUV) ("Augyva"). Century has entered into a

    Joint Venture Framework Agreement with WISCO pursuant to which WISCO may

    earn a 40% joint venture interest in the Duncan Lake Iron Project;

   

--  The Attikamagen Project in which Labec Century Iron Ore Inc. ("Labec

    Century") has a registered 56% interest and in which it has requested a

    further 4% interest under the Attikamagen Joint Venture Agreement with

    Champion Iron Mines Limited ("Champion"). Champion is completing its due

    diligence investigations with respect to the transfer of the 4%

    interest. Labec Century is a joint venture company owned by Century and

    WISCO, as announced by Century on September 26, 2012.

   

--  The Sunny Lake Project, which is a joint venture between Century and

    WISCO under the Sunny Lake Joint Venture Agreement, as announced by

    Century on November 29, 2012; and

   

--  The Astray, Grenville, Menihek and Schefferville projects acquired from

    Altius Minerals Corp. (TSX:ALS) (100% owned by the Company). These

    projects are 100% owned by Century, except that Century has sold 80% of

    its interest in the Astray project and retained a 20% interest.

[Blue Macaw]

This I find interesting:

 

Steel consumption per capita in South Korea is approx 1300 kg

Steel consumption Japan 2011 536 kg/capita and year

Steel consuption China 2011 464 kg/capita and year

Lets assume China will increase this up to around 600 kg. (Maybe it will never reach the status and GDP/capita as South Korea, maybe it will???) This means an increase of 150 kg or 0,150 tons. Multiply this with 1,300 million people and we have around 195 million ton steel. It takes about 2,5 tons iron ore for every ton steel so this means that we need to supply china with roughly 487 million ton iron ore per year extra from todays values.

 

Conclusion is that many of these mines will be developed. It will of course be rough ride and some companies will fail (Northland Resources for example with the worst management team that I have seen in a long time. I was luckily not invested there).

 

Comments on this?

[tengen]

I wonder how much of the steel is for cars. Certainly there is a huge potential for more car ownership in China. On the other hand, car manufacturing may shift to using lightweight composites and much less steel.

[alertmeipp]

Hebei paid C$120M for 25% of Kami.  Therefore, Alderon's share of the Kami project is worth 75% * ($120M / 25%)  or $360M.  Add $120M in cash (plus Alderon's working capital, if you feel like it) and Alderon should be worth at least $480M.

 

$480M versus current market cap of $140M... this is insane?

 

To state the obvious, the market is not paying what Hebei paid for ADV.. why would we...

[ItsAValueTrap]

I'm saying the market cap is too low / Alderon looks crazy undervalued.

[TwoCitiesCapital]

Hebei paid C$120M for 25% of Kami.  Therefore, Alderon's share of the Kami project is worth 75% * ($120M / 25%)  or $360M.  Add $120M in cash (plus Alderon's working capital, if you feel like it) and Alderon should be worth at least $480M.

 

$480M versus current market cap of $140M... this is insane?

 

I'm not sure this is quite the right way to look at it. I was under the impression that Hebei's investment bought it a 25% ownership position in the mine, a 20% equity stake in Alderon, the right to receive a fee in the event environmental assessments are delayed, the right to a certain amount of tonnage produced by the mine, and a 5% discounted price to pay for this tonnage. Seems like you would need to adjust for these optionalities. I doubt they are worth $360 M but haven't done the math. I imagine the "discount" is significantly less than what it appears using your reasoning though.

[ItsAValueTrap]

Hmm lemme try this again.

 

Suppose that Altius' 3% royalty and Hebei's off-take agreement accounts for 30% of the Kami project's profits (15% each).

 

First stage of Hebei's investment:

30% - royalty + offtake (70% left for everybody else)

14% - Hebei's interest in 20% of Alderon's shares (*actually 19.9% ignoring dilution from options/warrants)

56% - other Alderon shareholders

Hebei has a call option on Kami to increase its stake.

Hebei has a right to receive a fee if environmental assessments are delayed.

 

Hebei paid roughly $62.2M for 15% + 14% + call options on the Kami project.  Implied $214M valuation for the entire Kami project if the option is worth nothing.

 

---

*Then, cash was spent on the Kami project so that it is worth more now.  More importantly, the Kami project is worth more because it has been "de-risked".  As you advance a mine, there is always the chance that you will find some kind of fatal flaw.  If you don't find that fatal flaw, the deposit is worth a lot more. 

**Assume that Alderon's valuation is completely dependent on Kami and that its cash isn't worth anything.

 

Second stage of Hebei's investment:

30% - royalty + offtake (70% left for everybody else)

17.5% - Hebei's 25% interest in the JV (25% * 70%); 52.5% left for everybody else

10.5% - Hebei's 20% interest in Alderon shares

42% - other Alderon shareholders

Hebei still has a right to receive a fee if environmental assessments are delayed.

 

C$24M - If Hebei pays Alderon $120M, its 20% share ownership means that it owns $24M in cash.

 

Hebei's total ownership rose from 29% to 43%.

Hebei paid $96M for an additional 14% of Kami.  So the implied valuation of the entire Kami project (royalties + equity) is at least $685M.  Alderon owns 52.% of Kami ($360M) and $120M cash.  So Alderon would be worth $480M.

 

---

Notes:

A- Hebei's $120M investment in Kami was *optional*.  If the Kami project were worth a lot more than $685M (or the non-royalty part of it worth a lot more than $480M), Hebei would still exercise the option.  So it's possible that the Kami project is worth a lot more.  Given the financing delay, I might assume that the fair value of the Kami project is close to $480M.

B- There are some faulty assumptions and shortcuts here.

C- The 3% royalty and off-take agreement aren't equivalent.  Not a big deal.

D- The relative values of the royalty, the offtake agreement, and the equity are hard to figure out.  I don't think that this is a huge deal.  If the offtake+royalty are worth nothing, then Alderon should still be worth $480M.  If they are worth a lot more than what I assumed, it still wouldn't matter.

E- The equity side will need to raise financing.  The shortcut way of thinking about this is assuming that Alderon can be 100% financed with junk bonds.  Similarly, the cash flows between the royalty side and the equity side are different.  The royalty side will see cash flow first, so the present value of its cash flows will be higher.  You just make a simplifying assumption that there is some kind of loan that magically equalizes all the cash flows.

The royalty+offtake have lower risk than the equity side.  Just make the assumption that there is some type of magical insurance or financial instrument that equalizes all the differences between the royalty and the equity.

F- I assume that Alderon's cash balance is always 0 going into the deals.

G- I give no discount to Alderon having excessive overhead costs.

 

[Blue Macaw]

Some things taken from Century Irons financial statements regarding Altius. The 35,000,000 shares was new to me:

 

Pursuant to the Altius Agreement (note 5), the Company agreed to issue (i) an aggregate of 5,000,000 common shares at nil proceeds (with 2,000,000 common shares issued on November 18, 2011 and 3,000,000 common shares issuable by November 18, 2013), and (ii) up to a maximum of 35,000,000 common shares upon satisfaction of certain milestones related to the definition of National Instrument 43-101 compliant iron ore resources above specific thresholds to acquire a 100% interest in four of Altius’ regional iron ore projects in the Labrador Trough: Astray, Grenville, Menihek and Schefferville. In addition, the Company agreed to incur minimum exploration expenditures of $7 million per project cumulatively over a 5-year period.

In connection with the transfer of Astray-X project to Northern Star as described in note 5, on November 30, 2012, Altius agreed to amend the provisions of the Altius Agreement to provide for an option to replace the remaining 750,000 common shares of the Company issuable to Altius for the acquisition of the Astray project, and up to a maximum of 8 million “bonus” shares for the project, with common shares issuable by Northern Star as adjusted by certain equivalence formulae stipulated in an assignment agreement. Pursuant to the X-Star Agreement, the Company has transferred the associated obligations of the Astray-X project to Northern Star.