I wrote some nice things about Altius — a company I’ve owned since the Spring — following a Dan Ferris teaser a few weeks back that told us about “Newfoundland’s Golden Mountain”, and today I picked up a few more shares, increasing my position by roughly 80% at a price of $6.78.
Why now? I still am not betting on Altius being a huge gold mining play anytime soon — that Viking gold property is in the very early stages of exploration — but their continuing work to develop their vast holdings in the maritime provinces, and their conservative management of those properties, continues to give me faith that management knows what they’re doing. That, and the tiny icing on the cake is that the Newfoundland and Labrador Refining Corp. (NLRC) will be coming out of bankruptcy and possibly adding some value for Altius shareholders in the next year or two — Altius “won” the latest court hearing so the firm isn’t being liquidated to repay other creditors (like the companies who got the orders for refinery equipment), but it is certainly questionable how much the permitted land is worth. As of the most recent numbers I’ve reviewed, they had written down the investment in the refinery project by $50 million.
So that refinery bit is very much an open question, to be sure — NLRC was a big part of the spike in Altius shares a couple years ago, as the only newly permitted North American oil refinery site, and possibly the home of the first new refinery for the US and Canadian markets in decades, but, to be brief, it didn’t work out and the putative refinery went bankrupt before they did much work … which was a big part of Altius’ fall back to the $5 range last year. Now Altius, as a major shareholder in the refinery project, can use the project’s remaining funding to shop the site and look for an operator or buyer who might be interested before the permits expire. It’s unlikely to be a big deal, but it’s another potential low-risk investment that could pan out without any further cash infusion from Altius, and possible gravy for shareholders … as long as you weren’t part of the enthusiasm that drove Altius shares up to $30 two years ago.
If you’re curious to read more on Altius, there have been ...