Alderon: 608 million tonnesA banner day for Altius. The market hasn't rewarded ALS yet but Alderon is going to be a huge win. ADV announces 608 million tonnes in indicated/inferred resources, and a clear path to a billion tonnes. ADV, with its location, infrastructure, and reserves, is now de-risked. This is definitely going to be a mine, even if, disastrously, iron ore prices decline 50%. They can break even with iron ore prices at $40 to $45 per tonne.
*
What's next for ADV? Prove up another 300 million tonnes at the North Rose zone, and produce a revised scoping study. I expect the project to now plan to produce 16 million tonnes of iron ore concentrate per year (comparable to Consolidated Thompson) and for project capex to cost about a billion (increased from $500 to $750 million to account for extra annual production).
*
I expect ADV to double or triple in the next 6 to 9 months. A Chinese steelmaker will invest $400 million or so this summer to get a significant piece of the company. I expect Altius to sell of some of its 32 million shares into the rising tide of the stock price or to the Chinese. They'll play it safely and take a couple hundred million off the table, just like with the Aurora uranium project.
*
The 3% royalty that ALS owns on Kami with 16 million tonnes of production per year: 16 million x $175 per tonne x .03 royalty = $84 million a year. Sea-borne iron ore is one of the most profitable businesses on the planet and we've got a monster tax on that business.
*
How much has Altius actually spent drilling and exploring Kami? Is it even 3 million total? The value this company creates from early stage opportunities is staggering.