I haven’t written much in the last six months about Altius Minerals, which has not been an official “Idea of the Month” stock but is one of my largest personal holdings — but with the strike at Voisey’s Bay now coming to an end, continuing interest from the big players in finding new iron ore, and the share price climbing substantially in recent months, I thought I should double-check how the valuation of the shares is looking.

Altius, which trades at the ticker ALS in Toronto and at ATUSF on the pink sheets, is a prospect generator/royalty originator company that is admirably run to minimize shareholder dilution and maximize long-term royalty generation. In the past they have been nimble investors in special situations, as with the temporarily very undervalued International Royalty Corp, which they bought into heavily a few months before the buyout by Royal Gold, but they have for most of the last several years focused on staking and exploring new assets or forgotten old assets in the maritime provinces of Canada, including uranium, rare earths, gold, and iron.

They then seek out partners for these projects for earn-ins or joint ventures, let others invest to develop the property, then gradually sell off their ownership stake and hold their overriding royalties on any future mineral revenues. That’s the short version of the story, but we can stick with basics.

Altius’ only cash-generating asset right now is their royalty on the massive Voisey’s Bay nickel/copper mine, and the unionized portion of that mine’s workforce has been on strike for about a year and a half, so production has been limited (the mine is operated by Vale). The strike has ended, so sometime in the next few months they should resume a higher production level, which will help to generate cash flow to offset Altius’ corporate expenses and exploration work (especially given current copper prices).

That Voisey’s Bay royalty is an overriding 0.3% (actually, they own 10% of a partnership that owns a 3% royalty — same effect) on the mine and on any extensions to it in the defined region, which doesn’t sound like much but is quite substantial given the huge size of the mine (and the future potential of the area). This royalty brought in $4-5 million per year in the fat years of 2007 and 2008, with high nickel prices and high production, ...