Perhaps you make a good point there bizaro. My past experience in following FFH's investments has made me gun shy of doing that. These guys are in a different game and this could be a sound idea.
1) Lundin is a much larger company (by market cap) than Yamana. They have more financial resources to fund the $250 million expansion projects at Chapada (throughout increase and Sucupira pit pushback).
2) Lundin is a copper-focused company. Chapada is primarily a copper mine with significant gold credits. Lundin spends a lot of money aggressively exploring for copper at its properties. The Yamana copper reserves and resource growth will likely ramp up under Lundin's exploration team.
This is more or less the entire argument, if you ask me. Just can take a LOOOOONG time to play out given how long cycles last and how long it takes to get a mine from idea to production.
BHP makes a strategic investment in Midland, way above current market price. C$5.9 million raised at 1.70 a share.
BHP gets right of first offer on Mythril. If the drilling hits BHP wants the project because it is potentially a very large copper deposit (based upon the IP surveys).
Lundin conference call emphasizes that they have no capital constraints compared to Yamana. They plan to bring copper production forward in an aggressive manner. I expect the gold-only Suruca deposit to be shelved, while Chapada expansion timeline will be accelerated. Yamana had been slowplaying the major expansion spending to try to keep a cash flow positive profile for a few years.
I can imagine the conservatives putting political pressure on the utilities to delay the coal power plant conversions a few years to save thousands of coal mine or coal power plant related jobs. Phaseout is inevitable but the exact timing is still up in the air, especially for the Genesee plants.
Wolfden Resources cutting timber for forest management has been kicking out revenue to Altius. Altius gets 20% of the sales receipts from timber sales. Altius received C$92,232 in timber revenue in 2018, and has received C$66,299 so far in 2019. See Wolfden’s most recent MD&A. I believe these sales receipts become part of Altius’s project generation revenue.
These regular sales are separate from what will eventually be a total sale of the Mt. Pickett timber rights (for at least US$5 million).
Because the total sale of timber rights didn’t happen by November 2018 Altius can now, at any time, demand the return of what it paid for the Mt. Pickett royalty, C$7.663 million, in cash or shares of Wolfden.
Wolfden was a speculative royalty deal but Altius built some excellent protections into the deal.
Strong Q1 performance and raised guidance. Potash is performing very well.
Altius should be in striking range for C$90 million total revenue in 2019 (royalty and project generation revenue). This preliminary Q1 royalty number doesn’t include ~C$300K from Voisey’s Bay and PG revenue (timber sales etc). LIF must keep paying out and Chapada should have a big second half of the year with the improved recovery circuits installed this quarter. Maybe a couple hundred thousand extra revenue from Excelsior in Q4.
90 million would be quite a reach. I will stick with 80 million for the year. Lundin buying Chapada, UCP win, highest quarter royalty revenue record, raised guidance and Altius barely moves. I think CapitalCities comment about the market not caring sums it up nicely.