ALS.TO - Altius Minerals

[jwfm1985]

Not only that, but they could very likely have additional liquidity with Alderon in the short-mid term...

[EliG]

Not about Altius but I found this an interesting read.

 

http://www.bloomberg.com/news/2014-01-16/miners-chopping-10-billion-search-bodes-next-price-boom.html

 

From the article:

 

“Anyone who is wisely investing in exploration because they have a long-term picture, they are smart but extraordinarily rare,” said Tom Price, a commodities analyst at UBS AG in Sydney.

 

[ItsAValueTrap]

Noticed this in Alderon's latest MD&A:

 

Image Air Charter Ltd (“Image Air”)

On March 1, 2012, the Company entered into a two-year aircraft charter agreement (the “Charter Agreement”)

with Image Air for a plane that Image Air leases from a limited partnership. The former Vice Chairman of the

Company’s Board of Directors is the sole limited partner of this limited partnership. Per the Charter Agreement,

the minimum cost to the Company is $44,400 per month, with additional charges incurred for each hour that the

aircraft is flown. On April 9, 2013, the Company sent notice to Image Air terminating the Charter Agreement, in

accordance with its terms.

 

I believe Alderon's former vice chairman is Stan Bharti.  The minimum cost of the corporate aircraft would be $532.8k/year.  I have no idea if the following company is the Image Air that is doing business with Alderon:

 

http://www.imageaircharter.com/page/index.aspx

[ItsAValueTrap]

It also seems like G&A has dropped dramatically from 2012 to 2013.  I can't figure out if some of the 2013 G&A is being capitalized into the Kami project.

 

The company still spends around a million dollars a year on "travel" and another million on "investor relations".

 

Investor relations is usually an euphemism for stock promotion.  The level of corporate waste might still be at high levels.

[giofranchi]

Gio, I think you are missing my point.

 

ap1234,

I have understood your point, and I think my actions speak very loudly: do you see any post of mine in the Altius thread from 5 months ago? No. Do you see some posts of mine now? Yes. Did I have an investment in Altius 5 months ago? No. Do I have an 8% investment in Altius now? Yes. It should be clear that I am very well aware of the fact Altius today is no longer the same business it was 5 months ago. And it should also be very clear which Altius I prefer!! ;)

a) to possess a cash-flow machine + some dry powder

b) to have a mountain of dry powder

I will choose a) anytime, without hesitation.

You have written:

So IF we have a downturn 6 months from now, the company does not have the ability to take advantage of the distressed opportunity the same way they did before they spent all of their cash.

This not only is “macro” (a downturn in commodities), but it is also “timing” (6 months), and I cannot invest based on “macro” + “timing”. I simply don’t know how. What if “macro” is correct, and the worst for commodities is really yet to come, but “timing” is wrong, and it will take another 3 years before a deflationary scare finally falls upon us? 3 years of cash-flow and Altius will have almost the same cash at hand it had 5 months ago…  :)

 

Gio

 

[Guest Dazel]

Trap,

 

Turn the page on your Bharti discussion....you have been trying to talk about it for years and years....he was gone in 2012!

You are smart give us something else please.

 

I would hope that costs were expensed they flow through to Altius income statement and become an asset as they are expensed under equity ownership.

[Guest Dazel]

ELiG,

 

Jim Rogers et all believe the article you posted is correct and we are entering the next phase of the commodity cycle.

 

Jeremy Grantham-says we are in peak everything.

 

Jeff Gundlach has even said Gold  and Gold miners look good for 2014

 

These  guys are not average investors... They are legendary contrarian investors.

[matts]

Trap,

 

Turn the page on your Bharti discussion....you have been trying to talk about it for years and years....he was gone in 2012!

You are smart give us something else please.

 

I would hope that costs were expensed they flow through to Altius income statement and become an asset as they are expensed under equity ownership.

 

If the company is renting planes from Bharti at potentially unfavourable terms how is he "gone"? This and the high travel and stock promotion costs should be worth a discussion at least no?

 

What you could have said is that Bharti left in 2012 and it looks like altius terminated the agreement at the earliest legal opportunity.

[ItsAValueTrap]

I suppose that Stan Bharti is gone and Mark Morabito is in control.

 

Mark Morabito used to run Forbes West.  I believe that Forbes West and Forbes and Manhattan have parted ways.  Forbes West is now "king and bay west management corp".  Alderon has related party transactions with king and bay.  Obviously travel and investor relations expenses are still as high as they were before.

 

Altius is one of the founders of Alderon.  Altius employees sit on Alderon's board and get paid seven figures for a part-time job (assuming that the options expense is correct; you can argue that the options are overstated).  At Altius they work full-time and get paid six figures in most years.

To be fair to Altius, Altius' business model requires them to enter into joint ventures with almost anybody they can do a deal with.  Doing a deal with a TSXV junior exploration garbage stock can be attractive because they tend to overexplore.  However, it is not a good idea for Altius to tell its partner what not to do; this will not help them build business relationships.

 

I would be shocked if Altius does not dump their shares once Kami is financed.

[Guest Dazel]

 

 

 

Altius controls Alderon and if they want to fire Morabito they will. And thanks for posting "again" Trap on the very same thing you have said 20 times.Are you looking to trade Alderon again?

 

 

 

Brokerage, investment banking, and financial report fees......Is that Promotion? Yes it is. The stock market is a promotion machine.

 

[Guest Dazel]

 

Gio,

 

Can you send me name of the operator with the great long term record you posted... am too lazy to scroll thorugh posts to find it.

 

Thanks,

 

Dazel

[ItsAValueTrap]

In no particular order:

 

Are you trying to start a flame war on an Internet forum or are you trying to make money?

 

I don't like promotional stocks because all of the money wasted on promotion hurts performance.  Investors in general would be better off with lower fees and less waste.

 

The money spent on excessive "travel" expenses (e.g. corporate jets) is a complete waste of shareholder money.

 

The reason why I was reading the latest MD&A in the first place is because it's a good idea to read every quarterly MD&A.  Sometimes the exploration companies will leave hints as to how well the project is doing.  In this case I didn't find anything positive or negative.  (Though I would say that no news is slightly negative.)

 

I am long Altius and it is the largest position in my portfolio.  I have no position in Alderon (though I would make more money if its share price went up so they can get financing).  I will probably trim some of my Altius position if it goes higher because the recent price move didn't make a lot of sense to me. 

 

I'm not the type of person to relentlessly pump a stock just because I am long.

[Guest Dazel]

 

Trap,

 

Flame war?

 

you have known that Bharti has been gone for years because I have repeatedly told you so... And as you said you read the M&A... if you read it in the detail you are describing...you would know that Bharti is gone? Right?

 

I know you are intelligent because I have read some of your stuff. So why do you keep bringing it up?

[Guest Dazel]

 

 

Trap,

 

Don't need an answer to the last post.

 

I don't really care.

 

[ItsAValueTrap]

Let's just leave that topic alone.

 

Cheers

[SharperDingaan]

Folks ... give it a rest.

 

We own both ALS & Alderon. They are junior resource companies, & promotion (however you define it) is part of what they have to do. If you are not comfortable with that reality, you should not be in a junior resource company.

 

ALS continues to rise; nothing prevents you from reducing the size of your holding. We hold a lot less than we used to, & it does not bother us at all. Should Alderon suddenly rise as well, great - but its not a big deal to us.

 

There has been a lot of great work done on this stock, it has all been given free, & virtually every poster on this board has benefited. We should be thanking those people, not pissing all over them.

 

SD

[garrett1]

+1

 

[Guest Dazel]

 

Back to business...

 

I have not seen this for awhile...Altius better hurry up if we are going to bottom fish some more....I did not know why so many resource stocks popped Friday...this likely had something to with it.

 

http://blogs.marketwatch.com/thetell/2014/01/16/citi-goes-bullish-on-miners-for-the-first-time-in-three-years/

[Blue Macaw]

 

Back to business...

 

I have not seen this for awhile...Altius better hurry up if we are going to bottom fish some more....I did not know why so many resource stocks popped Friday...this likely had something to with it.

 

http://blogs.marketwatch.com/thetell/2014/01/16/citi-goes-bullish-on-miners-for-the-first-time-in-three-years/

 

Dazel

 

It looks like you will be right about the fact that share price will rise as people are trying to get on the train. I am surprised we see these levels already. With a nod now for Julienne Lake and I think we could see another jump over 20 CAD per share.

[giofranchi]

 

Gio,

 

Can you send me name of the operator with the great long term record you posted... am too lazy to scroll thorugh posts to find it.

 

Thanks,

 

Dazel

 

Hi Dazel,

I was referring to TransDigm Corp.

From the 2012AR:

Shareholders saw the Company’s total

enterprise value (equity capitalization plus

net debt) increase by 57% year over year

and at a 33% compound annual rate since

the Company’s formation in 1993. A portion

of that value was realized by shareholders

in the form of a special dividend of $12.85

per share paid in November 2012 after

our fiscal year-end.

Should a market correction come, TransDigm is probably my first choice! It’s a $9 billion company, with a lot more room to grow, and a leader / founder who is both an extremely shrewd investor and businessman. He is in his mid 60s’ and could stay at the helm for another couple of decades! How I have missed the boat with this one so far, I cannot truly tell… :(

 

I attach the latest presentation to shareholders.

 

Cheers,

 

Gio

TDG_IR_Presentation_-_September_2013.pdf

[giofranchi]

I know you are intelligent because I have read some of your stuff.

 

I also think ItsAValueTrap is very smart. He has done an outstanding job with the LMCA thread, and therefore I respect his thought very much.

This is the reason I would like to know why he expects a correction in ALS stock price to come anytime soon. Is it a valuation concern? If so, could you explain why ALS should be overvalued? Based on the true worth of the assets on its balance sheet, and based on its track-record for compounding shareholders wealth, I would say ALS is still cheap! Certainly not overvalued!

Could you please let us know your thesis on ALS?

Thank you! :)

 

Gio

 

[ItsAValueTrap]

I don't think it is overvalued.

 

In this case I don't plan on selling out of Altius completely unless the share price gets out of hand (e.g. $25+).  It is my largest position and I might take a little bit off the table because my average cost is under $10.

 

I'm guessing that Altius won't be buying back shares.

[giofranchi]

I don't think it is overvalued.

 

In this case I don't plan on selling out of Altius completely unless the share price gets out of hand (e.g. $25+).  It is my largest position and I might take a little bit off the table because my average cost is under $10.

 

I'm guessing that Altius won't be buying back shares.

 

Ok, thank you! I guess I knew what your answer would be, but I just wanted to know for sure! ;)

 

Gio

[Phaceliacapital]

http://www.moneyshow.com/investing/article/1/tptp072513-33536/Altius-Minerals/

 

Offering value, growth, plus a future dividend, our top pick for 2014 is a resource exploration company with a difference, suggests Adrian Day, money manager and editor of The Global Analyst.

 

Altius Minerals (OP:ATUSF) (TSX:ALS) is a resource exploration company with a difference. It has sought out partners for the expensive work of developing properties while retaining royalties. Now in a transformational transaction, Altius has announced it is buying 51% of a package of mineral royalties for $233 million.

 

The royalties are on 11 long-life producing mines of potash and coal, with most of the coal assets paying based on production, not the prevailing coal price. The royalty payers are mostly large companies, utilities in the case of the coal, and Potash and Mosaic for the potash.

 

Thus, these are mostly low-risk assets with almost utility-like returns. Last year, Altius' 51% would have paid $25 million.

 

To finance the deal, Altius will spend about $110 million of cash and take on about $130 million in debt; it will issue no equity. The company plans to eliminate the debt as a priority, either from royalty cash flow or from the sale of some of the shares it holds in other companies (valued at about $100 million now).

 

The company has also indicated it plans to initiate a dividend from the royalty cash flow, once debt is reduced significantly. The transaction completes the transformation of Altius, from a prospect generator exploration company, to Canada's largest diversified royalty company.

 

In addition to these royalties, Altius also has a cash-flow generating royalty on the Vale's large Voisey's Bay nickel mine, as well as a significant royalty on the development-stage Kami iron ore deposit.

 

Once in production, Kami will generate as much as the new royalties (while Voisey's Bay, at around $5 million last year, is considerably less, but covers the overhead).

 

Altius remains a low-risk, value play, undervalued on a sum-of-the-parts calculation, with lots of upside and the potential to morph into a dividend-paying company within a couple of years.

 

 

[hohi]

Adrian Day owns about 5% of the company. Nice to see him excited as well.