Alderon Iron Ore Corp. (AXX) Inks Labrador City Annual Grant Agreement
Seeking Alpha Analyst Since 2010
Alderon Iron Ore, whose flagship Kami Iron Ore Project (18.8k plus acres) up in Canada holds just over 668M tonnes (29.5% iron) of proven/probable reserves ($3.24B NPV), reported good news today regarding the portion of the project which falls within the Municipal Planning Area for Labrador City, as an agreement has been signed with the city that provides additional revenue for infrastructural demand related to regional growth from the mine.
Currently slated to begin commercial production in Q4 next year, running some 8M tonnes of concentrate (65.2% iron) each year out to global markets via deep sea port access the company has secured at Port of Sept-Iles (Canada's most important ore-handling port), The Kami Project is 75%-owned by AXX through The Kami Mine Limited Partnership alongside renowned industry steelmaker (44M tons produced in 2011 alone) and the largest steelmaker in China, Hebei Iron & Steel Group (25% ownership). With over 204k feet of drilling from 2010 to 2012 backing their plan and such excellent development characteristics (also a 30-year mine life), as well as ready access to multi-user railway and year-round port facilities, it is little wonder why the third largest steel producer in the world has taken such an interest in AXX and their Kami Project.
Mayor of Labrador City, Karen Oldford, noted how the deal that has been struck mirrors other deals with mining companies operating in the town (Kami is surrounded by four producing iron ore mines). This parity creates a level playing field for local operators, as well as helps to stimulate the community robustly, making it an attractive place for all to live, work and play with their families. The agreement calls for the Kami LP to pay a grant based on the project's operations each year and will do a great deal to prepare the town for expansion by future employees of the mine and their families. Given the fact that Kami LP doesn't have to fork over any municipal or other taxes for operations located in the Municipal Planning Area, this agreement firmly reinforces the symbiotic relationship between Kami LP and Labrador City, being mutually attractive.
President and CEO of AXX, Tayfun Eldem, greeted conclusion of the agreement warmly, confident in the knowledge that it will not only ultimately translate into improved conditions for Kami Mine employees, but that the swift closure on mutually agreeable terms helps cement the already positive relationship that has been established with Labrador City. Shrewd moves here by AXX ahead of the Kami ramp, keeping relations with the primary towns (Fermont, Labrador City and Wabush) fresh, so no snags come up as they accelerate into production.
More information on Alderon Iron Ore can be found at AlderonIronOre.com
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