With iron ore prices off 49% year-on-year at US$71 per tonne, Alderon Iron Ore (TSX: ADV; NYSE-MKT: AXX) says it has no choice but to start a “comprehensive” cash preservation program.
The decision comes Just four months after Alderon secured an offtake agreement with Glencore (LSE: GLEN) for iron ore from its US$1.3 billion, fully permitted Kami project in the Labrador Trough.
The cost saving measures are necessary to maintain a healthy working capital position into 2017, Alderon said, emphasizing that the program does not mean the company is on care and maintenace.
Management said it is working more closely than ever before with Hebei Iron & Steel to find a way to increase the Chinese company’s participation in Kami to boost Alderon’s access to available capital. Hebei Iron & Steel currently holds a 25% stake in the project.
In the meantime, Alderon’s cost saving measures include a number of voluntary vendor payment deferrals and relief from debt servicing requirements, as well as cuts to the company’s workforce.
Read the complete article at NorthernMiner.com/news/alderon