giofranchi Posted January 10, 2014 Share Posted January 10, 2014 Kept on reading and kept on buying: my investment in ALS is another 50% larger today. :) Gio Link to comment Share on other sites More sharing options...
Otsog Posted January 10, 2014 Share Posted January 10, 2014 http://www.juniorminingnetwork.com/junior-miner-news/news-releases/354-tsx/adv/23123-alderon-iron-ore-corp-kami-project-released-from-provincial-environmental-assessment.html#.UtAM8H-9KK0 :) Link to comment Share on other sites More sharing options...
phil_Buffett Posted January 10, 2014 Share Posted January 10, 2014 http://www.juniorminingnetwork.com/junior-miner-news/news-releases/354-tsx/adv/23123-alderon-iron-ore-corp-kami-project-released-from-provincial-environmental-assessment.html#.UtAM8H-9KK0 :) very nice! :) Link to comment Share on other sites More sharing options...
craigatk Posted January 10, 2014 Share Posted January 10, 2014 1. Highvale royalty seem to be non existing. The operator gave up on it it seems like? So the question is if that will be a factor or if there will only be 11 royalties instead of 12? This was troubling to me too and I'm still trying to figure out why they would announce a royalty that didn't seem to exist or pay anything.... In trying to read between the lines, there may be some answers but it's kind of vague at the moment. In the Royal Utilities Income Fund prospectus there may be an answer. Here's a quote from page 29/30 of the amended English prospectus. Under a non-unitized arrangement, actual royalties earned by the Company may vary depending on the total coal production at each of the mines. At Paintearth, Sheerness and Highvale, not all coal rights have been unitized and, as such, variations will result from mining operations moving in and out of the areas where the Company’s coal and mineral rights are located. Sherrit (and Fording/predecessor companies) had the contract for mining at the Highvale mine going back however this contract was not renewed by TransAlta and I haven't found out who is currently under contract or if TransAlta is operating their own mine. So this work stoppage may have impacted royalties during the reported period through non-production. In addition, it appears that Altius only has purchased a royalty that covers part of the mineral rights of the mining area and not the total mine. If the operator is not mining in the area covered by their royalty, this might explain why they purchased a non-paying royalty. Link to comment Share on other sites More sharing options...
Liberty Posted January 10, 2014 Share Posted January 10, 2014 http://www.juniorminingnetwork.com/junior-miner-news/news-releases/354-tsx/adv/23123-alderon-iron-ore-corp-kami-project-released-from-provincial-environmental-assessment.html#.UtAM8H-9KK0 :) Thanks, good news! Link to comment Share on other sites More sharing options...
Guest Dazel Posted January 10, 2014 Share Posted January 10, 2014 Very good news for Alderon... it is a provincial release...Federal release should be imminent....I would expect a financing agreement (likely off take agreement) to accompany the federal release. However, the Canadian currency move could help with a larger financing deal. As explained a major financing deal in the billion range would save over $100 million to U.S or Euro denominated investors. Link to comment Share on other sites More sharing options...
Guest Dazel Posted January 10, 2014 Share Posted January 10, 2014 Craigatk, They are only buying 11 producing royalties....the 12th is Voisey Bay.... Dazel. Link to comment Share on other sites More sharing options...
Guest Dazel Posted January 10, 2014 Share Posted January 10, 2014 Criagatk, If you look a the presentation the list Highvale royalty at -nil...it is the 12th in the list but is not included in the their headline of purchasing 11 producing royalties. Thank for you work...would love more questions and discoveries...pardon the pun. Dazel. Link to comment Share on other sites More sharing options...
Guest Dazel Posted January 10, 2014 Share Posted January 10, 2014 Blue and Craigatk, I just modified this post.... I did not see your Highvale question before.....they have another $200k in royalties misc coming in that is number 12 in their list...without it there is 11 royalties...the headline was the purchase of 11 and Voisey Bay would make 12 producing royalties... Dazel. Link to comment Share on other sites More sharing options...
jwfm1985 Posted January 10, 2014 Share Posted January 10, 2014 After following this for a while, finally made the plunge today - thanks for your contributions Dazel!! Link to comment Share on other sites More sharing options...
Guest Dazel Posted January 12, 2014 Share Posted January 12, 2014 I am seeing the Canadian dollar chatter quite a bit in the main stream...another thread has used a Canadian resource stock as a natural hedge. I have discussed this here briefly. Here is how Altius is hedged. The majority of our costs are in Canadian currency...our cash and equivalents are mostly Canadian dollar denominated...Our stock holdings on the TSX are in Canadian currency and short term you could come to the conclusion they are depreciating in relation to USD and Euro's...they are if you sold them tomorrow and converted currency. The hedge: All capex and production costs have dropped with the cdn currency depreciation...this very positive for Alderon and the Kami project. Why? All of the resources that Alderon (kami has over a billion tonnes of iron ore) and Altius own are priced in USD. So the resource assets themselves have not depreciated from the currency drop but our costs to extract them have. Altius royalty income is based on the USD price and the operators of those projects have their margin expand because their costs have dropped in comparison to the USD price of the resource. In many cases this why investors buy hard assets...If you are in all USD or Euro's you can buy a USD based asset for a discount (CDN dollar discount)... Link to comment Share on other sites More sharing options...
muscleman Posted January 12, 2014 Share Posted January 12, 2014 Kept on reading and kept on buying: my investment in ALS is another 50% larger today. :) Gio What is your target portfolio %, gio? When I first came across this thread, I felt like this definitely fits your taste. :D Link to comment Share on other sites More sharing options...
giofranchi Posted January 13, 2014 Share Posted January 13, 2014 Kept on reading and kept on buying: my investment in ALS is another 50% larger today. :) Gio What is your target portfolio %, gio? When I first came across this thread, I felt like this definitely fits your taste. :D I would gladly put 7% - 8% of my firm’s portfolio in ALS at these prices. Hoping to get a chance in the future of averaging down. If I could take advantage of lower share prices, I would invest up to 15% of my firm’s portfolio. The same is true for BH. Look, as you have said, they both fit my taste very well: I like franchise businesses, I like royalty businesses, and I like shrewd businessmen / investors. In BH I have a franchise business led by a shrewd businessman / investor; in ALS I have a royalty business led by a shrewd businessman / investor. When the odds are in your favor, bet big… do I remember well? ;) Gio Link to comment Share on other sites More sharing options...
Blue Macaw Posted January 13, 2014 Share Posted January 13, 2014 So finally turning around the down trend today.... So February we will have the federal verdict. I and the rest assume it will be a go but that is not what is holding back Alderon shares. It is the bloody power line that they keep on bringing up every other day. That has scared the heck out of investors. My assumption for the spring is that in february we will have a positive EA. Only power line which will drag into march april until settled. Therefore the production will be delayed until beginning of 2016. Alderon shares will however jump on the news and hit a new 52 week high of around 4. New agreement with Chinese partner. The new partner buys Altius shares for a price around 3.50. Altius uses the cash to pay of loans. Altius get a positive repsone on Jullienne lake. (I cannot really see how they can fail this!!) Drilling will commence and PEA also. Full value (current market) for Kami is around 8-10 CAD and Julienne around 20 CAD. I think we could see a value of around 20 CAD per Altius share at the end of the year if things turn out the way we want. Link to comment Share on other sites More sharing options...
goldfinger Posted January 13, 2014 Share Posted January 13, 2014 Full value (current market) for Kami is around 8-10 CAD and Julienne around 20 CAD. I think we could see a value of around 20 CAD per Altius share at the end of the year if things turn out the way we want. 8 + 20 + all the rest = 20??? Link to comment Share on other sites More sharing options...
ap1234 Posted January 13, 2014 Share Posted January 13, 2014 Dazel, congratulations on a successful investment! I have enjoyed reading some of your insightful comments on the company. I am relatively new to Altius. I have a couple questions for you: 1. The company's historical track record (BV/share growth) is very impressive. Can you provide additional color on how they achieved that performance. In other words, was their BV/share growth driven by a few outsize winners (Aurora, IRC, etc.) or have there been many consistent winners over the past 17 years? 2. What is your sense for the quality of the people behind Alderon? I had previously looked at Aberdeen Int'l. I passed on the investment as I was somewhat concerned by some of the dealings of Stan Bharti (not simply excessive compensation but questions of integrity). Do you have any concerns about Bharti's connection to Alderon? Given that you have followed the name very closely, I'd love to hear your thoughts. Link to comment Share on other sites More sharing options...
Guest Dazel Posted January 14, 2014 Share Posted January 14, 2014 Thank you...but we are very much undervalued still as our projects including the Kami royalty, Julienne Lake and over 10 other projects are priced at about $10m, Voisey Bay at $8m. The three assets alone without the other 10 projects or the new royalty purchase could be worth a billion dollars. Altius is just getting started. 1. Growth has been steady...other winners are Rambler, Mamba, Century, Millrock cost is 0 as they sold the majority of their position at .80, Voisey Bay is an unrecognized home run as it will return over $100m pretax from $11m purchase. Fukushima was a big set back or Aurora would be a producing royalty now, the partnerships over the years have been positive and the stable right now looks very promising. The fact they kept their cash from their winnings rolling into Voisey Bay, IRC , Virginia Mines is becoming a nice winner etc...and made it grow are the polar opposite from the industry who have blown all of their money and over paid for "streams" of cash...now they will reap the rewards of their patience with their latest royalty purchase and Kami and Julienne Lake are poised to be home runs as well... 2. Alderon-Stan Bharti has not been a director since September 4 2012...Altius is the largest shareholder at Alderon and with Liberty and Hebei have voting Control of Alderon with almost 70% of the shares. So no I am not sure why Stan Bharti' s name even comes up? It's an Altius controlled board with a Great management team from IOC for the most part with some from Consolidated Thompson all with a long experience in developing mines in the Labrador Trough. Link to comment Share on other sites More sharing options...
Guest Dazel Posted January 14, 2014 Share Posted January 14, 2014 Ap 1234, I actually missed a year...they are 18 years old...their compound return is 29% over that time...I am not sure of any company with that kind of record. And really it does not matter to me unless I thought they had the foundation to continue at that pace....and it is obvious that I think the market has not figured out yet that they are set up beat those numbers. Dazel. Link to comment Share on other sites More sharing options...
hohi Posted January 14, 2014 Share Posted January 14, 2014 Maybe it is good to reiterate that Mr. Market has not factored in any of the opportunity that lies within the Julienne Lake proposal. As valuable as is Kami and the new royalties and as undervalued Altius might be with the current assets, it will blow peoples minds once we get the green light to develop Julienne Lake. I predict that within 4-5 short years Julienne Lake will be worth at least double what's Altius is trading for right now (the royalty + some minority equity). Very, very exciting! Link to comment Share on other sites More sharing options...
Blue Macaw Posted January 14, 2014 Share Posted January 14, 2014 Altius is not really showing enough of the royalties they have by ownng the shares in Virginia Mines and Callinan. Are investors really valuing these? The 777 mine will bring in approx. 0,9 million per year (6 % of 15) and Eleonore will bring in 0,6 million to start with the first year before ramping up. Link to comment Share on other sites More sharing options...
cwericb Posted January 14, 2014 Share Posted January 14, 2014 Here is one thing that bothers me a little about Altius. From the Yahoo chart: 2003-2005 Steady run up in share price to the $3-4 range 2006 price up to nearly $10 2007-8 now hitting the $25-30 range 2009. Bang! ALS was knocked back to the $4-7.00 range. A haircut of about 80%! Now nearly all stocks took huge hits in 2009, but 80% is a lot and most other stocks have fully recovered and many have set new highs. But up until last month Altius has only recovered to the $10 range - one third of it previous highs, and even with the Sherritt announcement is still less than half of its highs of four years ago. In fact we are still below our 2011 highs. Now I can see the upside to Altius, but what concerns me as I invest more into the company is that past history indicates that the potential downside could be more than a little scary. Comments? Also, there was consistent and steady run up of price in the earlier years, but then a very quick run to the highs in 2007-8. So why did the price run up so quickly and drop so deeply? Link to comment Share on other sites More sharing options...
giofranchi Posted January 14, 2014 Share Posted January 14, 2014 Now nearly all stocks took huge hits in 2009, but 80% is a lot and most other stocks have fully recovered and many have set new highs. But up until last month Altius has only recovered to the $10 range - one third of it previous highs, and even with the Sherritt announcement is still less than half of its highs of four years ago. In fact we are still below our 2011 highs. Well, but this is a positive! Not a negative in the least! It means the price is still low. A low price equals a small downside. Doesn’t it? Think of it this way: in 2008 it was in the $25-$30 range… Now, after 5 years of great value creation, it is around $14… In 2009 it went down to around $5… A compound rate of 29% annual, like Dazel says, means that in 5 years your value gets to be circa 3.5 times bigger… $5 x 3.5 = $17.5… I think Dazel is right: I don’t see much downside here, even if a serious market correction should come. :) Gio Link to comment Share on other sites More sharing options...
giofranchi Posted January 14, 2014 Share Posted January 14, 2014 Also, there was consistent and steady run up of price in the earlier years, but then a very quick run to the highs in 2007-8. So why did the price run up so quickly and drop so deeply? I guess this could be explained with the commodity bubble that spiked around 2007-2008. I guess ALS is not the only company whose stock price got pumped up by the crazy love for commodities that swept the whole world in those years… Then it popped, like any bubble always does, and the stock price followed suit. Here, I think, Dazel is right again: today’s sentiment towards commodities is very far from that last speculative fever. If anything, the opposite is true: commodities nowadays are looked at with great suspicion (just look at the Canadian$ and the Australian$ in 2007 and today!). Gio Link to comment Share on other sites More sharing options...
Williams406 Posted January 14, 2014 Share Posted January 14, 2014 I'm going to guess Newfoundland and Labrador Refining Corporation had a lot to do with the run up and back down in price during that time period. The feasibility study started early 2006. Environmental assessments and approvals in 2008. And it was a big project that would have been very material to Altius had it been completed. As I wasn't involved with Altius at that time, I never did any valuation work on NLRC, so I'm speculating a bit on this last point. I think a rough parallel is evaluating blue chips like Wal-Mart post 2000. Working off the top of my head, Wal-Mart traded for 40-50x earnings in the 90's bubble. It traded at nearly the same stock price mid 2000's, though revenue, earnings, and cash flows were much higher. Past stock price behavior may not be indicative of future results. It seems to me whether or not Altius should have traded at $25-$30 is a question for 2007-2008 and I don't have a Way Back Machine. How is Altius positioned now? What are the risks? What is the opportunity? I think investors are saying "show me the cash flow, show me the environmental permits, show me the financing deals and even then I'll wait until the check clears, before giving credit for anything in the mining space right now. Once bitten, twice shy. I'm happy to accumulate Altius from the ballroom wallflowers and wish y'all would stop doing so for a couple of days. 406 Link to comment Share on other sites More sharing options...
cwericb Posted January 14, 2014 Share Posted January 14, 2014 "I'm going to guess Newfoundland and Labrador Refining Corporation had a lot to do with the run up and back down" Good point! I had forgotten about that. Link to comment Share on other sites More sharing options...
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