Tuesday 19 Mar, 2013Alderon Iron Ore Corporation announce that Hebei Iron & Steel Group Co Ltd has contributed the remaining CAD 119.9 million of its initial investment and Alderon has contributed the Kami iron ore project to a limited partnership which is owned 25% by HBIS and 75% by Alderon.

 

This concludes HBIS's initial strategic investment, first announced on April 13th 2012, into both Alderon and its Kami Project for an aggregate amount of CAD 182.2 million, in exchange for 19.9% of the outstanding common shares of Alderon and a 25% interest in the Kami Limited Partnership which was established to own the Kami Project. Alderon has the remaining 75% interest in the Kami Limited Partnership.

 

Mr Mark Morabito executive chairman of Alderon said that "Alderon is very pleased with its long term partnership with HBIS, China's largest steel company and among the largest steel groups in the world. The conclusion of this strategic investment further validates and meaningfully de-risks the project and leads the way to successful development of the Kami Project into a high quality iron ore mine."

 

The entire CAD 119.9 million of investment proceeds contributed by HBIS will be used for the continued development of the Kami Project.

 

In addition, Alderon and HBIS will be required to contribute to capital expenditures for the development of the Kami Project not covered by initial capital contributions and project debt financing, in accordance with their respective interests subject to the terms of the agreement governing the Kami Limited Partnership.

 

In connection with the CAD 119.9 million contribution, Alderon has provided confirmations to HBIS with respect to certain information rights related to the development of the Kami Project and the expenditure of the CAD 119.9 million contribution.

 

In addition, Alderon has agreed that in the event that the environmental assessment and related approvals for the Kami Project are not obtained by March 31st 2014, Alderon will be required to pay to HBIS CAD 3 million per month for each whole month until such approvals are obtained.