I was hoping that we’d get a dip in the price this month, but it doesn’t look like that’s going to happen anytime soon — Investors are following up on the relatively good news for iron ore of late, with Chinese demand remaining firm, and thinking positively about the iron ore projects underway in Labrador … including the Kami project from Alderon, which was created by Altius Minerals and in which Altius still holds a large stake. So I added a bit more to my longstanding Altius position as prices have been climbing — I don’t know if the recent spike is due to increased attention from newsletters or from some other source, but rising awareness for Altius should, even if the price spike is short-lived, help lead to higher prices over time.

Altius has a lot of prospecting land and partnerships that should over time generate more mines, but it often takes many years. The real hidden asset at Altius is their royalty on the Kami project, not the actual shares they own in Alderon — the Alderon shares are worth something like $70 million right now, but if iron ore prices stay in a reasonable range for a few years the royalty has the potential to generate $20-30 million per year as the mine ramps up (and there’s an outside chance, if the mine is expanded as it might be, of royalties of over $50 million a year starting sometime in the next decade). It’s occasionally been possible for value-minded investors to buy Altius for less than their easily ascertained net asset value, and it’s above that now since that royalty and their other very early stage projects aren’t given any real value on the balance sheet, but this is still a small company with a market cap of around $350 million and almost half of that amount in cash that’s just waiting for royalties or other deals to be struck when the time is right. Should the Kami mine be developed as is now envisioned, Altius plans to dividend out the lion’s share of the royalty income — nothing to count on right now, since that’s probably at least three years out given the delays that new mines always see, but potentially significant for long-term holders.

These are smart mining prospect generators and royalty creators who have patience and great connections, so I continue to think ...