Alderon Reaches Settlement with Newfoundland and Labrador Hydro
VANCOUVER, BC--(Marketwired - September 25, 2017) - Alderon Iron Ore Corp. (TSX: IRON) ("Alderon" or the "Company") is pleased to provide an update on recent corporate developments. The Kami Mine Limited Partnership ("Kami LP"), Alderon's affiliate and the owner of the Kami Project, has reached a settlement with Newfoundland and Labrador Hydro with respect to the $21 million letter of credit that it posted for the construction of a new transmission line to the Labrador West area. As a result of the settlement, Kami LP will be returned $11.5 million (plus accrued interest) from the release of the letter of credit. In addition, if construction of the transmission line resumes within the next five years, Kami LP will receive an additional $750,000 payment as a re-start credit.
Alderon also announces that it is working with BBA, Inc. to update the re-scoped preliminary economic assessment ("PEA") that was completed in February of this year. The Wabush Scully Mine was recently acquired by a third party who has stated its intention to re-open the mine. As a result, Alderon and BBA will be updating the PEA to remove the components related to the Wabush Scully Mine. The use of the depleted pit at the Wabush Scully Mine was just one of the many cost savings that were identified as part of the re-scope of the Kami Project and the updated PEA will still encompass the other cost savings as outlined in the previous PEA.
The Kami Project remains an attractive development prospect due to its high-grade iron ore concentrate with low impurities. Stricter environmental regulation has driven demand for the premium product that will be produced from the Kami Project, as it allows end users to meet more stringent environmental standards. In particular, China's bid to reduce emissions is seeing an increase in domestic steel mills switching to high-grade iron ore products with fewer impurities. For the type of iron ore concentrate that the Kami Project will produce (65% Fe), there is already a spread to the Platts iron ore index price, currently pegged at US $21 per tonne above the benchmark product. This spread has widened over the last 18 months and prices for high-grade ore are expected to continue to increase as environmental regulation becomes more stringent.
About Alderon
Alderon is a leading iron ore development company in Canada. The Kami Project, owned 75% by Alderon and 25% by HBIS Group Co. Ltd. (formerly Hebei Iron & Steel Group Co. Ltd.) ("HBIS") through The Kami Mine Limited Partnership, is located within Canada's premier iron ore district and is surrounded by two producing iron ore mines. Its port handling facilities are located in Sept-ÃŽles, the leading iron ore port in North America. HBIS is Alderon's strategic partner in the development of the Kami Project and China's second largest steel producer.
For more information on Alderon, please visit our website at www.alderonironore.com
Alderon is part of the King & Bay West group of companies. King & Bay West is a merchant bank and management services company that specializes in identifying, funding, developing and managing growth opportunities in the resource and technology sectors.
Alderon Iron Ore Corp.
On behalf of the Board
"Mark J Morabito"
Chairman & CEO
Cautionary Note Regarding Forward-Looking Information
This press release contains "forward-looking information" within the meaning of the U.S. Private Securities Litigation Reform Act and Canadian securities laws concerning anticipated developments and events that may occur in the future. Forward-looking information contained in this press release include, but are not limited to, statements with respect to the advancement and development of the Kami Project, the completion of an updated PEA and the demand for iron ore concentrate produced from the Kami Project.
In certain cases, forward-looking information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Forward-looking information contained in this press release is based on certain factors and assumptions regarding, among other things, receipt of governmental and other approvals, the estimation of mineral resources, the realization of resource estimates, iron ore and other metal prices, the timing and amount of future development expenditures, the estimation of initial and sustaining capital requirements, the estimation of labour and operating costs, the availability of necessary financing and materials to continue to explore and develop the Kami Project in the short and long-term, the progress of exploration and development activities, the ability of the Company to gain access to the Wabush Scully Mine site, the ability of the Company to use the multi-user terminal facility at the Port of Sept-ÃŽles, the receipt of necessary regulatory approvals, the estimation of insurance coverage, assumptions with respect to currency fluctuations and exchange rates, environmental risks, title disputes or claims, and other similar matters. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.
Forward looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include risks inherent in the exploration and development of mineral deposits, including risks relating to changes in project parameters as plans continue to be redefined including the possibility that mining operations may not commence at the Kami Project, risks relating to variations in mineral resources, grade or recovery rates resulting from current exploration and development activities, risks relating to the ability to access rail transportation, sources of power and port facilities, risks relating to changes in iron ore prices and the worldwide demand for and supply of iron ore and related products, risks related to increased competition in the market for iron ore and related products and in the mining industry generally, risks related to current global financial conditions, uncertainties inherent in the estimation of mineral resources, access and supply risks, reliance on key personnel, operational risks inherent in the conduct of mining activities, including the risk of accidents, labour disputes, increases in capital and operating costs and the risk of delays or increased costs that might be encountered during the development process, regulatory risks, including risks relating to the acquisition of the necessary licences and permits, financing, capitalization and liquidity risks, including the risk that the financing necessary to fund the exploration and development activities at the Kami Project may not be available on satisfactory terms, or at all, risks related to disputes concerning property titles and interest, risks related to disputes with Aboriginal groups, risks related to a third party acquiring the Wabush Scully Mine site, risks related to insufficient capacity being available for the Company to access the multi-user terminal facility at the Port of Sept-ÃŽles, environmental risks and the additional risks identified in the "Risk Factors" section of the Company's Annual Information Form for the most recently completed financial year, or other reports and filings with applicable Canadian securities regulators. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information is made as of the date of this press release. Except as required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking information.
Contact
For further information please call:
Fiona Grant Leydier (NATIONAL Equicom)
1-416-848-9851
fgrantleydier@national.ca
