VANCOUVER, BRITISH COLUMBIA--(Marketwired - Sept. 12, 2013) - Alderon Iron Ore Corp. (TSX:ADV) (NYSE MKT:AXX) ("Alderon" or the "Company") is pleased to announce that it has signed an engagement letter (the "BNP Paribas Engagement Letter") under which it has given BNP Paribas an exclusive mandate to act as lead arranger of up to a US$1 billion senior debt financing facility (the "Senior Debt Facility") to complete the construction and start-up of the Kami Iron Ore Project (the "Kami Project"), located in the Labrador Trough. The BNP Paribas Engagement Letter sets forth the required steps, including agreement on final terms and conditions and requisite documentation for the Senior Debt Facility, completion of due diligence, and procurement of credit approvals, among other things. The BNP Paribas Engagement letter does not constitute a commitment to provide financing.
Alderon is pursuing a financing strategy for the Kami Project based on a combination of the Senior Debt Facility, other debt options, equipment financing, equity and off-take partner contributions. In order to provide flexibility and maximize its financing options, Alderon intends to pursue the Senior Debt Facility and its other debt options in parallel, and is targeting a total debt financing amount of US$1 billion. Alderon will in particular be evaluating an offering of senior secured notes in the capital markets to ensure that it obtains the total US$1 billion target.
"The signing of the engagement letter represents a significant step forward towards obtaining project financing for the construction of the Kami Project," said Mark Morabito, Alderon's Executive Chairman. "We expect our financing strategy to provide maximum flexibility for Alderon to achieve its US$1 billion debt financing target and to obtain all of the required capital to develop the Kami Project. Alderon also expects that a portion of the debt financing will be provided by Chinese banks given Hebei Iron & Steel Group's involvement in the Kami Project and the strong relationship that Hebei has with many Chinese banks."
"We are pleased to be working with the BNP Paribas team to bring the Kami Project into production. The combination of the proven financial capability of BNP Paribas, coupled with the high quality project team currently at work on the Kami Project gives us great confidence that this project will be developed in an environmentally and socially responsible manner to the benefit of our shareholders, employees and local stakeholders" said Tayfun Eldem, President and CEO of Alderon. "We believe the high quality, large scale and favorable proximity to infrastructure in the Labrador Trough combined with 60% of the production presold to Hebei for the next 15 years, make it an attractive candidate for financing from the international banking community. This step illustrates that progress for finalizing our financing is keeping pace with the Kami Project environmental assessment process, which we expect to be nearing completion in the coming months."
This press release shall not constitute an offer to sell or a solicitation of an offer to purchase any securities of the Company in the United States or any other jurisdiction. The securities of the Company have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), or the securities laws of any other jurisdiction and may only be offered and sold in the United States pursuant to an exemption from the registration requirements of the U.S. Securities Act. In addition, the securities of the Company may only be offered and sold in Canada pursuant to an exemption from the prospectus requirements of Canadian securities laws.
Alderon is a leading iron ore development company in Canada with offices in Vancouver, Toronto, Montreal, St. John's and Labrador City. The Kami Project, owned 75% by Alderon and 25% by Hebei Iron & Steel Group Co., Ltd. ("HBIS"), is located within Canada's premier iron ore district and is surrounded by four producing iron ore mines. The Alderon team is comprised of skilled professionals