Alderon Iron Ore Corp. (TSX:IRON)
("Alderon" or the “Company”) is pleased to
announce that it and The Kami Mine Limited Partnership
(“
Kami LP”) have closed a previously announced
loan facility (the "
Loan Facility") with Sprott
Resource Lending (“
Sprott”), a global leader in
resource asset investments. Alderon used the funds received from
the settlement with Newfoundland and Labrador Hydro, together with
a portion of the US$14 million Loan Facility to repay the Liberty
Metals & Mining Holdings, LLC (“
LMM”) loan.
The closing of the Sprott transaction comes as Alderon advances its
updated Feasibility Study (“
FS”) scheduled for
conclusion this fall. Upon completion, the updated FS is expected
to demonstrate that the Kami Project is well-positioned to pursue
project financing on account of improved project economics
initially highlighted in the updated Preliminary Economic
Assessment released on November 7, 2017.
“With the closing of the Sprott Loan Facility
and the repayment of the loan from Liberty, Alderon is well
positioned to complete its updated Feasibility Study and re-launch
its project financing efforts,” stated Tayfun Eldem, President and
CEO of Alderon. “The replacement loan is an endorsement of the
quality of the Kami Project and provides Alderon with the capital
to execute the next steps in the development plan while allowing it
to reduce its overall debt load.”
The terms of the Loan Facility
are:
- Principal amount of US$14 million.
- Interest at 10% per annum, payable monthly.
- Original maturity date of December 31, 2019 (the
“Maturity Date”).
- The proceeds of the Loan Facility were advanced as a single
draw on the closing date (the “Closing
Date”).
- The proceeds of the Loan Facility were used to repay the
existing LMM loan and to reimburse Alderon for amounts that are
pre-paid to LMM prior to closing.
- Alderon is acting as guarantor for the Loan Facility.
- Altius Minerals Corporation (“Altius”),
through a wholly-owned subsidiary, participated in the Loan
Facility by providing US$2 million of the US$14 million principal
amount.
- As consideration for the establishment of the Loan Facility,
Alderon issued 4,123,740 common shares (“Common
Shares”) to Sprott and 687,290 common shares to
Altius.
- In the event that the Maturity Date is extended in accordance
with the terms of the Loan Facility, an additional total of
US$350,000 in Common Shares shall be issued to Sprott and Altius on
the Maturity Date and at a price per share equal to a 10% discount
to the volume weighted average trading price on the TSX for the
five trading days prior to the Maturity Date. United States dollar
amounts shall be converted into Canadian dollars using the daily
average exchange rate for the conversion of United States to
Canadian dollars set by the Bank of Canada as at the business day
immediately prior to the date of issuance of the Common Shares. The
Common Shares shall be issued based on a ratio of 12/14th to Sprott
and 2/14th to Altius.
Prior to the Closing Date, Altius held
51,838,916 Common Shares (representing 39% of the Company’s current
issued and outstanding Common Shares). After the Closing Date,
Altius now holds 52,526,206 Common Shares (representing 37.98% of
the Company’s current issued and outstanding Common Shares).
About Sprott
Sprott is an alternative asset manager and a
global leader in precious metal and real asset investments. Through
its subsidiaries in Canada, the US and Asia, the company is
dedicated to providing investors with best-in-class investment
strategies that include Exchange Listed Products, Alternative Asset
Management and Private Resource Investments. The company also
operates Merchant Banking and Brokerage businesses in both Canada
and the US. Sprott is based in Toronto with offices in New York,
Carlsbad and Vancouver and its common shares are listed on the
Toronto Stock Exchange under the symbol (TSX:SII). For more
information, please visit www.sprottinc.com.
Sprott Resource Lending is a globally recognized
leader in natural resource financing and specializes in providing
flexible debt solutions to mining companies. Since joining Sprott,
the team has financed more than $1.0 billion in bespoke private
debt investments. For more information, please visit
www.sprottlending.com.
About Alderon Iron Ore
Corp.
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, the Labrador
Trough, and is surrounded by two producing iron ore mines. Its port
handling facilities are located in Sept-Îles, 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 IRON ORE CORP.On behalf
of the Board"Tayfun Eldem"Director &
CEO
Alderon is part of the King & Bay group of
companies. King & Bay is a merchant bank that specializes in
identifying, funding, developing and supporting growth
opportunities in the resource, aviation, and technology
sectors.
For further information please
call:
Mishka Gounden 1-604-681-8030 ext
289info@alderonironore.com
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 (i)
future demand for production from the Kami Project; (ii) the next
steps in the development of the Kami Project; (iii) the completion
of project financing; and (iv) the market and future price of iron
ore and related products.
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 use the
multi-user terminal facility at the Port of Sept-Îles, 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 insufficient capacity being
available for the Company to access the multi-user terminal
facility at the Port of Sept-Îles, 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.