Alderon Iron Ore Corp announced that it has committed to work with Canadian National Railway Company on a feasibility study for a proposed rail line and terminal handling facility to connect the Labrador Trough to the Port of Sept-Iles, QC.

This proposed multi-user rail line is expected to include a fully operational and continuous railroad network, as well as a multi-user material handling facility located at the Port of Sept-Iles. Alderon remains committed to concluding an initial agreement with Quebec North Shore and Labrador Railway owned and operated by the Iron Ore Company of Canada and with the Chemin de fer Arnuad owned and operated by Cliffs Natural Resources, both of which are common carriers under Canadian Federal law. Alderon management is of the view that the development of a second railway option in the future is in Alderon's best long term interests and further that the proposed terminal handling facility at the port would also add optionality to Alderon's current business plan.

CN, its partner in the venture, La Caisse de depot et placement du Quebec along with a number of iron ore exploration and mining companies, including Alderon, are participating in the feasibility study, which will examine the cost and engineering parameters of the proposed rail network and associated infrastructure.

Mr Tayfun Eldem president and CEO of Alderon said that "By entering into this agreement, Alderon will be able to evaluate all potential alternatives to transport its product from its Kami Mine site to the Port of Sept-Iles. The additional development of a multi-user material handling facility at the Port would supplement the new multi-user deep water dock facility we have also secured access to."

CN has announced that to advance the process as quickly as possible, it will coordinate the application with the Canadian Environmental Assessment Agency for the required permits for the project. This will allow the feasibility study to be launched along with the appropriate consultations with all relevant stakeholders, including First Nations.

Under the terms of the agreement with CN, Alderon will commit to fund USD 1.5 million for the feasibility study that will be carried out over the next twelve months and to secure capacity on the new rail line. The funds would be refunded to Alderon under certain circumstances.

Source - Alderon

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