IRON STUDY: Kami PEA carries $1-B development price

LABRADOR - The preliminary economic assessment for developing the Rose Central deposit of the Kamistiatusset iron ore property comes with a US$989 million price tag says owner Alderon Resource Corp. The property is 6 km south of the Wabush Mines iron mine. The PEA was prepared by BBA Inc. of Montreal and Stassinu Stantec LP of St. John's, NL.

The proposal for the Kami project involves building an 8-million t/y open pit mine, concentrator, tailings management area, infrastructure, rail transport system and port facilities. Commercial production could begin in 2015 and continue for 15.3 years. The cost does not include closure costs, sustaining capital or equipment leases.

The numbers are favourable. The net present value (discounted 8%) is US$3.07 billion, and the project would have a payback period of only 2.7 years. The pre-tax internal rate of return is estimated to be 40.2%. Total operating costs (excluding royalties) would be US$44.87 per tonne of 65.5% Fe concentrate over the life of the mine. The level of accuracy of the PEA is considered to be between -20% and +30%.

Alderon said the PEA is based only on the development of the Rose Central deposit which has an indicated resource of 376 million tonnes at 29.8% Fe and an inferred resource of 46 million tonnes at 29.8% Fe. The total indicated resource is 490 million tonnes at 30.0% Fe and an additional inferred resource of 118 million tonnes at 30.3% Fe.

A more detailed description of the project is available at www.AlderonMining.com in the news release dated Sept. 8, 2011.