Feb 27Liked by The Thinking Investor

For me EVO and KSPI and PAX the are always delivering!!

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Feb 26Liked by The Thinking Investor

And to add (about optionality) ALS owns 11% of Lithium Royalties : LRC.

This entity just filed for an IPO: at a contemplated valuation of $700-$900mill

Most analysts give ALS zero credit for their lithium division (or, maybe $25m best case)…but this IPO highlights that there is an added $50mill in value (low end of the IPO pricing) just in this division

They have multiple such situations

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Feb 26Liked by The Thinking Investor

Altius Minerals (ALS in Toronto) : the perfect commodity stock, with a dividend and endless optionality. Management are true long term thinkers looking out for the shareholders.

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Feb 26Liked by The Thinking Investor

Probably NNI for me. Almost forget I even own it sometimes. Relatively underfollowed and hard to understand but fantastic management.

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Mar 8Liked by The Thinking Investor

ALS for me as well, never knew it was so loved.

Just discovering your substack - good work.

Some good ideas here to look into, thanks.

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Mar 3Liked by The Thinking Investor

Berkshire and Coca-Cola Company

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Feb 27Liked by The Thinking Investor

from a CDN guy (Jonathan Lansky...No Straight Lines blog) that just wrote an update to his ALS pitch:


When I first wrote about Altius Minerals, I suggested there were some significant near-term value creating outcomes.

Over the past few weeks we have received 2 such announcements and indications that a 3rd will follow sometime before mid year.

Lithium Royalty Corporation files for an IPO

ALS owns 11.4% of LIRC. The suggested pricing range on the LIRC term sheet pegs the market cap of the company between $861mm and $1.02B post money.

For ALS, this represents between $2.06/share and $2.45/share, assuming the IPO is priced within the prescribed range.

Here is a list of the properties covered by LIRC royalties as disclosed in ALS most recent slide deck:

As you can see, ALS also holds 3 direct co-participating royalties in mines that will be in production in 2023. ALS will receive 10% of each of these royalties directly.

There are a few other tidbits worth digesting with regards to LIRC.

Of the 29 royalties, 28 are revenue based, which means that the royalty owner (LIRC) fully participates in upside moves in the Lithium price.

Much press has been devoted to the recent correction in Lithium prices (north of 30%). The fact that we are witnessing auto OEM’s looking to lock-up long term supplies of lithium for their battery needs RIGHT NOW is all the comfort I need that the lithium market will remain robust.

As further proof, the company believes that the $$ raised on the IPO can be invested in a very compelling pipeline of lithium royalty opportunities that have been cultivated since 2018. Much like ARR’s unique model in wind and solar, LIRC has a substantial first mover advantage in the lithium square.

The prospectus provided some compelling evidence of the leverage achieved in a couple of the near production royalties, have a look:

The key takeaway point is that leverage is coming from both annual production increases AND the lithium price.

I have previously stated that NAV calculations are flawed with respect to longer life assets covered by royalties due to the exaggerated impact of the discount rate on the further out cashflows.

Be that as it may, the mid-point of the range on LIRC is approximately 0.8x NAV, using multiples lower lithium price (standard practice of course is to use a long term pricing assumption so fair enough).

I still think it’s possible an entity steps in and outright purchases LIRC before it actually goes public.

How could one of the large precious metals royalty companies allow this unique and irreplaceable collection of lithium royalties go public and likely obtain a much more powerful currency?? We shall see.

The company starts marketing to potential investors Monday Feb 27 and the IPO is scheduled to price the week of March 6, which is only a week away.

At a minimum I suspect LIRC will garner significant institutional demand which should lead to some value recognition in ALS’ share price.

Release of Sauva Maiden Resource

My apologies for not flagging this important data point sooner.

If you recall, Lundin Mining suggested that costs for Chapada were expected to increase 18% for 2023.

The Sauva maiden resource suggests grades 39% better than the current Chapada grades.

More importantly, drill results also indicate a higher grade mineralization core near surface that could provide potential mine optimization plans i.e. open pit.

What’s the best way to lower costs? Increase grades!!

These next 2 slides (from Altius) provide all the detail you need to see the potential of Sauva:

I recognize the stock has not moved since the release of the Sauva maiden resource, but it doesn’t change the fact that expansion of Chapada is currently being evaluated and it seems quite likely that Sauva will figure in future mine plans, possibly sooner than the market anticipates.

To me the numbers suggest that copper production from the Chapada district is poised to increase significantly (2X?) and will consequently drive much higher copper-based royalty revenues.

And you know I loves my copper!

The Merlin Deposit as Part of the Silicon Gold District

Earlier this week, Anglogold Ashanti released an updated resource estimate for it’s Silicon deposit in Nevada.

There had been hope that the company would release a maiden resource for Merlin, but that didn’t happen. It is expected that the PFS will be finished sometime in the 1H of 2023.

Have a look at the updated slide from the ALS deck:

As I have previously argued, if Merlin is what I think it is, and my ballpark estimate is at least 4.5mm oz’s, there is ENORMOUS value in the royalty held by ALS that covers the Silicon Gold District. A royalty on a world-class gold district located in Nevada, USA? I mean, who would be interested in owning it??

I had a listen to the Anglogold Ashanti call. The CEO Alberto Calderon talked about Silicon being 4.2mm oz’s and 3 other deposits adding up to 4.2mm oz’s, and then he added: “that doesn’t even include Merlin yet which we think is the real gem of the portfolio”. Drop the mic Alberto!

Whilst the lack of maiden resource at Merlin is frustrating, it’s not like the gold has disappeared, and we KNOW it’s big.

I believe ALS will attempt to swap this royalty into a base metal (copper) royalty.

I also think it is likely that preliminary discussions regarding this potential transaction are occurring now, in spite of the lack of resource at Merlin and a PFS for Silicon.

In my original write-up on ALS( ALS Initiation ) I calculated a potential value of $225mm, or $4.73/share. At this point I see no reason to adjust my numbers.

It is worth reading through the entire ALS slide deck: ALS NEW DECK


It is clear to me there are many ways to win on ALS.

In the immediate term, we will find out what value the market ascribes to LIRC.

We should hear more on Sauva and Merlin by the middle of the year, and it is hard to imagine anything but positive results and progress.

I remain a very comfortable holder of ALS and look forward to seeing the multiple value drivers play out further.

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Feb 27Liked by The Thinking Investor


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Feb 27Liked by The Thinking Investor

Investor AB

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Feb 27Liked by The Thinking Investor


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Feb 26Liked by The Thinking Investor

Berkshire Hathaway.

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Feb 26Liked by The Thinking Investor

Costco, Apple, Tencent, Lvmh. Once you build a position, I feel zero inclination to look at them.

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right now it’s $aep.v because it’s cheap and stock is starting to gain momentum to catchup to fundamentals

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Feb 26Liked by The Thinking Investor

Just discovered this one on NNI:


@aaronvalue comments regularly on NNI on Twitter. FRPH has a 2021 VIC writeup, and this:


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Feb 26Liked by The Thinking Investor

INMD, easily.

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boring Fluor ($FLR) which I started buying under $10 in 2020 (a Kramer recommendation) while it's revenues were dropping and cancelling its dividend. Now over $30, share price keeps climbing and revenue over 10% growth expected for a few years.

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Feb 26Liked by The Thinking Investor


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