All-Canadian royalty portfolio
Kami Iron Ore Royalty / Alderon Equity (NL, Canada)
Altius entered into an agreement with respect to its Kami iron ore project in November 2009 as part of its merchant-banking like approach to co-found a new public company to explore the project and western Labrador region. The agreement resulted in the restructuring and financing of Alderon Iron Ore Corp. (ADV:TSX) who in December 2010 fulfilled its option agreement terms with Altius to earn 100% interest in the Kamistiatusset iron ore project ("Kami") by issuing Altius 32,285,006 payment shares of Alderon. Altius also retains a 3% gross sales royalty relating to any potential future mining operations.
Since that time Alderon has achieved a significant number of milestones, the most significant of which was the completion of a Feasibility Study Report ("FS") regarding the Kami Iron Ore Property completed by BBA Inc., Stantec, and Watts, Griffis and McOuat Ltd. Consulting Ltd. effective Dec. 17, 2012. The National Instrument 43-101-compliant report summarizing the results of the FS was filed on SEDAR on January 16, 2013. Highlights of the FS disclosed by Alderon are tabled below and note all $ values are in USD and pre-tax (except where otherwise indicated).
|Highlights of the FS include:|
|NPV at 8% discount rate||$3,244 M|
|Average Estimated Operating Costs (loaded in ship Port of Sept-Iles)||$42.17|
|FOB Concentrate Sales Price Forecast - based on long term CFR benchmark price of $110/T @ 62% iron adjusted for Kami Fe grade and Hebei agreement terms|
|Year 1-5 (2016-2020)||$107|
|Year 6 onward||$102|
|Estimated Mine Life||30 years|
|Final Product Iron Grade (% Fe)||65.2%|
|Measured and Indicated Resource of the Rose Deposit (COG=15%, 29.6% Total Iron)||1093.2 Mt|
|Proven and Probable Reserves of the Rose Deposit (COG=15%, 29.5% Total Iron)||668.5 Mt|
|Annual Production Rate (average life of mine, post ramp-up year)||8.0 Mtpa|
|Projected Plant Start-up and Commissioning||Q4, 2015|
|Projected Commencement of Revenue Generation||Q1, 2016|
|Projected Years to Payback at 8% discount rate||3.8|
For further information on Alderon's development plans at Kami please visit Alderon's website.
Alderon is the third special purpose company co-founded by Altius since 2005 in its proven merchant banking business strategy.