RE: RE: Dalton in ChinaThe $200 million number is probably how much IRC's Voisey Bay stake was valued by Royal Gold. RGLD paid about $740 million total for all of IRC, so by inference, Altius' royalty couldn't be worth that much according to the transaction. But one could make an argument that the royalty should be valued near $100 milllion, if one believes in commodity prices holding up and other considerations.
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There's a research paper from 2003 called "Voisey's Bay and the Nickel Potential for Labrador" by A. Kerr (you should be able to google this) that sets out the Voisey's Bay reserves before production began.
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Voisey's Bay had 141 million tonnes of mineralized rock at average grades of 1.63% nickel, .83% copper, and .06% cobalt. That's 2.3 million tonnes of nickel, 1.1 million tonnes of copper, 84 thousand tonnes of cobalt.
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Convert tonnes to pounds: 5 billion pounds of nickel, 2.4 billion pounds of copper, 185 million pounds of cobalt.
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What's the current prices of these commodities? Nickel, $12 a pound, Copper, $4.35 a pound, Cobalt, ~$13 a pound (not sure about that one). So total economic value at Voisey's Bay: Nickel, $60 billion, Copper, $10.4 billion, Cobalt, ~$2.4 billion.
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What's Altius' royalty worth, undiscounted, at current prices? $72.6 billion x royalty rate of 0.003 = $217 million dollars.
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Considerations: 1) Vale has produced a lot of reserves already, so there may only be 100 million tonnes left; 2) Altius expects Voisey's Bay, like other premier nickel districts worldwide, to be expanded over time. Mining could last for 100 years, not the currently planned 30 years, see examples of Sudbury and Norilsk. There are likely more deposits in the district. Altius gets a piece of all discoveries.
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I think iron ore prices will decline, perhaps to $100 or $75 per tonne, but no more than that because the long-term growth story of Asia is real. This price decline will wash out Alderon's competitors with those ugly $4 billion capex numbers. But I estimate a 75% probability Alderon will still reach production because of its low capex ($750 million might get it done), location, and financial backers (I love the Forbes and Manhattan team). If iron prices don't decline the company will definitely produce. All blue sky.