Alderon Iron Ore (TSX: IRON) (“Alderon” or the “Company”) is pleased to provide an update on recent corporate developments. The Kami Mine Limited Partnership (“Kami LP”), Alderon’s affiliate and the owner of the Kami Project, has reached a settlement with Newfoundland and Labrador Hydro with respect to the $21 million letter of credit that it posted for the construction of a new transmission line to the Labrador West area.
As a result of the settlement, Kami LP will be returned $11.5 million (plus accrued interest) from the release of the letter of credit. In addition, if construction of the transmission line resumes within the next five years, Kami LP will receive an additional $750,000 payment as a re-start credit.
Alderon also announces that it is working with BBA to update the re-scoped preliminary economic assessment (“PEA”) that was completed in February of this year.
The Wabush Scully Mine was recently acquired by a third party who has stated its intention to re-open the mine. As a result, Alderon and BBA will be updating the PEA to remove the components related to the Wabush Scully Mine.
The use of the depleted pit at the Wabush Scully Mine was just one of the many cost savings that were identified as part of the re-scope of the Kami Project and the updated PEA will still encompass the other cost savings as outlined in the previous PEA.