Alderon Iron Ore Corporation announced that it has signed a definitive subscription agreement with Liberty Metals & Mining Holdings, a subsidiary of Liberty Mutual Group. In connection with the CAD 194 million subscription agreement recently signed between Alderon and Hebei Iron & Steel Group Co Limited, LMM indicated to Alderon that it intended to exercise its pre emptive right to maintain its relative proportionate interest in the company. LMM has now reconfirmed this intention with the execution of the Subscription Agreement.
Under the terms of this Subscription Agreement, LMM will acquire approximately 3,805,576 common shares at the subscription price of CAD 3.42 per share, for gross proceeds to the company of CAD 13,015,070.
The subscription by Liberty will allow it to maintain its proportionate interest in the company after the closing of the previously announced strategic partnership with Hebei, China's largest steel producer. Hebei will make a strategic investment into both Alderon and its Kami iron ore project in an aggregate amount of CAD 194 million, in exchange for 19.9% of the outstanding common shares of Alderon and a 25% interest in a newly formed limited partnership that will be established to own the Kami Project. The closing of the transactions with Hebei remain subject to approvals from the government of the People's Republic of China and are also subject to the approvals of the Toronto Stock Exchange and NYSE MKT.
The closing of the private placement with Liberty contemplated by the Subscription Agreement is conditional on the closing of the Hebei Private Placement. In addition, the Subscription Agreement is subject to the approvals of the Toronto Stock Exchange and the NYSE MKT.
In addition to the private placement with Liberty and the strategic partnership with Hebei, during the preceding 12 months the Alderon team has compiled an impressive list of accomplishments. Highlights include:
Completing an initial mineral resource estimate on North Rose, Rose Central and Mills Lake of 490 million tonnes at 30.0% iron in the Indicated category and an additional 598 million tonnes at 30.3% iron in the Inferred category. Mineral resources that are not mineral reserves do not have demonstrated economic viability
Completing a Preliminary Economic Assessment of the Kami Project which indicates a positive pre tax NPV of USD 3.07 billion; pre tax IRR of 40.2%; payback period of 2.7 years and an annual production of 8 million tonnes at 65.5% iron. The PEA is preliminary in nature and it includes Inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the conclusions reached in the PEA will be realized
Initiating the Federal and Provincial Environmental Assessment processes and the Government of Canada and the Provincial Government of Newfoundland and Labrador have issued draft environmental impact statement guidelines for public review
Adding former Newfoundland and Labrador Premier Mr Danny Williams to its Board of Directors
Adding several senior former Iron Ore Company of Canada and Consolidated Thompson executives to the management team, most notable appointing Mr Tayfun Eldem as President and CEO
Completing a strategic investment with Liberty Metals & Mining Holdings, LLC of approximately CAD 40 million
Graduating to the Toronto Stock Exchange under the symbol ADV
Commencing trading on the NYSE MKT exchange under the symbol AXX
Successfully completing its final exploration drill program prior to the preparation of a Feasibility Study on the Kami Project which consisted of 32 holes, totaling 12,300 meters
The securities described herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended, or any state securities laws, and accordingly, may not be offered or sold within the United States except in compliance with the registration requirements of the US Securities Act and applicable state securities requirements or pursuant to exemptions the reform. This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the Company's securities in the United States
Source - Alderon Pacific Iron Ore
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