Alderon Signs Agreement with Nalcor to Perform Stage III Engineering and Assessment for the Supply of Power for Alderon's Kami Project
December 13th, 2012 (TSX: ADV) (NYSE MKT: AXX) Alderon Iron Ore Corp. (TSX: ADV) (NYSE MKT: AXX) ("Alderon") is pleased to announce that it
has entered into an agreement (the "Agreement") with Nalcor Energy ("Nalcor") whereby Nalcor will
perform Stage III engineering and assessment related to providing transmission and electrical plant and services associated with supplying electrical power for Alderon's Kami Project. Nalcor Energy is headquartered in St. John's, NL, Canada. Its business includes the development, generation, transmission and sale of electricity; the exploration, development, production and sale of oil and gas; industrial fabrication and energy marketing.
"Alderon commenced Nalcor's formal process for the provision of power to an industrial customer in Labrador in September 2011 and we are very pleased to now be in the third and final stage of the engineering and assessment process," says Tayfun Eldem, President and CEO of Alderon. "The third stage of the process will lead to the completion of detailed engineering and will also mark the start of the formal negotiations towards a mutually acceptable Power Purchase Agreement."
Nalcor has established a formal process in advance of Nalcor or Newfoundland and Labrador Hydro being able to supply power to an industrial customer in Labrador. The technical process involves three stages: Stage I - Pre-Project Phase; Stage II - Concept Selection; and Stage III - Front End Engineering Design. Alderon and Nalcor have completed Stages I and II of the process. With the signing of the Agreement, Stage III has commenced and it is expected to take 6-8 months to conclude. Alderon funded all of the costs associated with Stage II and will also fund all Stage III costs which are estimated to be $3.8 million. Commercial discussions will commence during Stage III of the process and once commercial terms are agreed upon, a formal Power Purchase Agreement will be signed by Alderon and Nalcor subject to environmental and regulatory approvals. The commercial terms and rates for power, transmission and other infrastructure costs will be governed by a Labrador Industrial Rates Policy Framework.
Alderon is a leading iron ore development company in Canada with offices in Vancouver, Toronto, Montreal, Labrador City and St. John's. The 100% owned Kami Project is located within Canada's premier iron ore district and is surrounded by four producing iron ore mines. The Alderon team is comprised of skilled professionals with significant iron ore expertise to advance Kami towards production.
Additional information about the Kami Project can be found in the technical report filed on SEDAR at www.sedar.com entitled: "Technical Report Preliminary Economic Assessment of the Rose Central Deposit and Resource Estimate for the Rose Central, Rose North and Mills Deposits of the Kamistiatusset (Kami) Iron Ore Property, Labrador for Alderon Iron Ore Corp." dated effective October
Cautionary Note Regarding Forward-Looking Information
This press release contains "forward-looking information" 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) the supply of power by Nalcor; (ii) successful negotiation of a Power Purchase Agreement; (iii) the timelines for completion and costs of the formal Nalcor process; and (iv) the receipt of environmental and regulatory approvals.
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, the estimation of mineral reserves and resources, the realization of resource estimates, iron ore and other metal prices, the timing and amount of future exploration and 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 Property (as defined herein) in the short and long-term, the progress of exploration and development activities, the receipt of necessary regulatory approvals, the completion of the environmental assessment process, the estimation of insurance coverage, and assumptions with respect to currency fluctuations, 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 Property, 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 Property may not be available on satisfactory terms, or at all, risks related to disputes concerning property titles and interest, 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 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.