IRON ORE: Alderon updates FS for $1.7B Kami project

[caption id="attachment_1003724992" align="aligncenter" width="298"] High grade core from the Kami iron ore project in Labrador. (Image: Alderon Iron Ore)[/caption] LABRADOR – Montreal-based Alderon Iron Ore Corp. updated the feasibility study for the Kami project (75% owned) 10 km from Wabush. The company says the project will produce a premium quality concentrate grading 65.2% iron and with low impurities. The 2018 study is expressed in U.S. dollars and assumes the pre-tax scenario with iron concentrate selling at $89.67 per tonne. Kami has a net present value (8% discount) of $1.7 billion and an internal rate of return of 24.6%. Payback will be only 4.0 years on a project with a 23-year life. Pre-production capex will be $982.4 million. Over the life of the mine, approximately 7.8 million tonnes of concentrate will be produced annually. The estimated operating costs per tonne (loaded at Sept-Iles) is $30.72. The Kami feasibility study covers three deposits – Rose Central (544.4 million measured and indicated tonnes at 28.9% iron and 160.7 million inferred tonnes at 28.9% iron); Rose North (312.5 million M&I tonnes at 30.4% iron and 287.1 million inferred tonnes at 29.8% iron); and Mills Lake (130.6 million M&I tonnes at 29.8% iron and 74.8 million inferred tonnes at 29.3% iron). The study puts proven and probable reserves at 517.2 million tonnes averaging 28.8% iron. Alderon said all of the planned production has been pre-sold to its project partner HBIS Group and to a subsidiary of Glencore. The Kami project has received federal and provincial environmental permissions. A power contract with Newfoundland and Labrador Hydro is in place. Ship loading contracts have also been negotiated. More information is available at www.AlderonMining.com.