Alderon Provides Corporate Update
August 11, 2015
Alderon Iron Ore Corp. (TSX: ADV) (NYSE MKT: AXX) (“Alderon” or the “Company”) announces a corporate update to shareholders. The update addresses changes in the executive management team and an update on the Company’s cash conservation program.
Changes in the Executive Management Team
The Company announces that Mr. Tayfun Eldem will transition from his current role as President & Chief Executive Officer of the Company to become the Vice Chairman of the Company effective August 24. Mr. Mark Morabito will transition from his role as Executive Chairman to become Non-Executive Chairman and Chief Executive Officer.
Mr. Eldem has been instrumental in advancing the Company from the exploration stage to the point where the necessary regulatory approvals have been received, contracts for port and power secured, stakeholder agreements concluded and the Company has completed the required pre-construction engineering on the Kami Project, such that it is ready for construction. The Company intends to commence construction of the Kami Project when it has obtained sufficient debt and equity financing to fund the construction. The Company’s efforts to conclude the financing plan will continue to be led by Mr. Morabito. In his role as Vice Chairman, the Company will have continued access to Mr. Eldem’s advice and expertise in operational, technical and commercial matters as it pursues its financing and value-engineering objectives.
Going forward, Mr. Morabito will be focused on the following initiatives: continuing to spearhead the Company’s financing plan, working with Mr. Eldem and Alderon’s partner Hebei Iron & Steel Group Co., Ltd. (“HBIS”), to re-scope the capital and operating costs of the Kami Project in order to identify savings that have arisen from the current depressed state of the market and changes in ownership and management of assets in the Labrador Trough, and evaluating strategic alternatives for the Company. If the market price of iron ore remains at current levels, the Company expects to have additional delays in completing its financing plan.
Mark Morabito, Executive Chairman of Alderon, commented that “Alderon management recently travelled to Beijing, China to present and discuss its project re-scoping plans with HBIS, Chinese government agencies and Chinese banks. HBIS has confirmed its commitment to the Kami Project and Chinese banks continue to be interested in exploring the financing of the Kami Project. As a result of these meetings, Alderon is going to proceed with a re-scope of the project in order to identify savings resulting from the current market environment and HBIS and the Chinese banks have agreed to participate in the process. If cost savings can be identified in the re-scope of the project, this will provide significant assistance in completing the financing plan for the Kami Project.”
Cash Conservation Plan Update
Due to the decrease in the market price of iron ore, the completion of the financing plan has taken longer than anticipated. The delay in the completion of the financing has led to the Company implementing a
cash conservation program (the “Program”) which will allow it to maintain sufficient liquidity while it continues to advance its financing plan (see press release dated December 9, 2015). The Program includes an interest deferral agreement with Liberty, voluntary partial payment deferrals with equipment vendors for work completed to date, workforce reductions and the implementation of the DSU Plan for Directors in place of cash director fees. The Program remains on track with the Company having approximately $17.6 million in cash and short -term investments while Management continues to identify and implement additional cash conservation measures. For additional information please refer to the Company’s unaudited condensed interim consolidated financial statements and notes thereto as of June 30, 2015 and the related Management’s Discussion and Analysis that are available on SEDAR at www.sedar.com.
As a further cash conservation measure, the Company will proceed with the closure of its Montreal office. As a result the Company’s sole corporate office will be based in Vancouver. As part of the closure of the Montreal office, after a transition period, the Company will replace its current Interim Chief Financial Officer with a new Chief Financial Officer located in Vancouver.
Alderon is a leading iron ore development company in Canada with offices in Montreal and Vancouver. The Kami Project, owned 75% by Alderon and 25% by Hebei Iron & Steel Group Co. Ltd. (“HBIS”) through The Kami Mine Limited Partnership, is located within Canada’s premier iron ore district 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 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
“Mark J Morabito”
For further information please call:
Mark J. Morabito
1-604-681-8030 or 1-888-990-7989