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Kami Feasibility Study
43-101 Technical Report

Kami Iron Ore Project

FEASIBILITY STUDY

Technical Report: Feasibility Study of the Rose Deposit and Resource Estimate for the Mills Lake Deposit (22.27MB).

 

LOCATION

The Kami Property is strategically located next to the mining towns of Wabush, Labrador City and Fermont. The property includes 305 claims in Labrador for a total of 7,625 hectares.

Kami is within close proximity to a road (~2.5km), a common carrier railway (~15km) and a hydro power station (~15.5km).  The multi-user railway will transport the material to a deep sea port which will provide year round access to the global market.

Phase 1 of the Point Noire Port Expansion is moving ahead with the federal government investing $55 million towards this multi-user deep water platform.  Alderon has secured port access to ship up to 8 million metric tonnes of iron ore annually.

 
click here to view
the location map

click here to view the
infrastructure map

click here to view the
Kami property location map


ROSE DEPOSIT FEASIBILITY STUDY

The Feasibility Study was completed by BBA Inc. located in Montreal, Quebec, Stantec Consulting Ltd. located in St. John's, Newfoundland & Labrador and Watts, Griffis and McOuat Limited located in Toronto, Ontario.

Highlights of the Rose Deposit Feasibility Study include:

  • Concentrate production rate of 8 million tonnes per year at a grade of 65.2% iron
  • Commercial production commencing in Q4 2015 with a mine life of 30 years
  • Capital cost of US$1.27 billion (excluding sustaining capital)
  • Operating costs of US$42.17 million (loaded in ship Port of Sept-Iles)
  • Pre-Tax IRR of 29.3%
  • NPV (discounted at 8%) of US$3.24 billion
  • Payback period of 3.8 years

The proposed site plan for the Kami Property can be viewed below:

Financial Analysis
IRR 29.3%  
Discount Rate
NPV (billion US$)
Payback (years)
0%
11.545
3.1
5%
5.030
3.5
8%
3.244
3.8
10%
2.461
4.0
 



ROSE DEPOSIT

 
Mineral Reserves
(15% cut-off grade)
Zone Category Tonnes
(Million)
Tfe%
Rose Deposit Proven 431.7 29.7
  Probable 236.8 29.2
  Total 668.5 29.5
       
       
Measured and Indicated Resource
(15% cut-off grade and is inclusive of Mineral Reserves)
Zone Category Tonnes
(Million)
Tfe%
Rose Central Measured 249.9 29.4
  Indicated 294.5 28.5
  Inferred 160.7 28.9
       
Rose North Measured 236.3 30.3
  Indicated 312.5 30.5
  Inferred 287.1 29.8
       
Total M&I Resources 1,093.2 29.6
 




PREVIOUS EXPLORATION

Alderon carried out a total of 62,247 metres of drilling on the Kami Property in 2010, 2011 and 2012.  Complete drill results can be seen below:


click here to view the
2012 Plan Map 



click here to view
complete drill results

 

 

 


CLAIM OWNERSHIP

Alderon has acquired a 100% interest in the Kami iron ore project from Altius by issuing 32,285,006 common shares to Altius as well as appointing John Baker (Chairman of Altius) and Brian Dalton (CEO of Altius) to the Alderon Board of Directors.  Altius will also retain a 3% gross sales royalty on iron ore concentrate from the Kami Project.


GEOLOGY

The Sokoman Fm. also known as the Wabush Iron Fm. is the ore-bearing formation in the Wabush Lake-Mount Wright area. The formation conformably overlies the Wishart Fm. quartzite where it is present, but also locally shares its basal contact with the Denault Fm. dolomite. The Sokoman Fm. is subdivided into Lower, Middle and Upper Members.

The Lower Member (LIF) consists of a 0 - 75 m thick sequence of fine to coarse grained banded quartz - carbonate, and/or quartz - carbonate - magnetite, and/or quartz-carbonate (i.e. siderite, ankerite and ferroan-dolomite) - silicate ( i.e. grunerite, cummingtonite, actinolite, garnets), and/or quartz - carbonate - silicate - magnetite, and/or quartz -magnetite - specularite units. Mixtures of these units can occur both vertically and laterally. This member may contain iron ore locally.

The Middle Member (MIF) which forms the principal iron ore unit consists of a 45 - 110m thick sequence of quartz-magnetite, and/or quartz-specularite-magnetite, and/or quartz-specularite-magnetite-carbonate, and/or quartz-specularite-magnetite anthophyllite gneiss and schist units. Actinolite and grunerite rich bands can be present in this member. Martite can also occur in weathered zones by alteration of magnetite.

The Upper Member (UIF) consists of a 45 - 75 m thick sequence similar in composition to the Lower Member and can generally only be differentiated through their contact relationships with the overlying and underlying formations supported by detailed structural interpretations. The hydrous iron oxides, limonite and/or goethite, have been observed in all members of the Sokoman Fm. Limonite and/or goethite are present in weathered and fractured zones and are derived primarily from alteration of carbonates. Pyrolusite (MnO2) was also observed in all members of the Sokoman Fm. and is typically associated with surficial or supergene enrichment, extending to depth along and adjacent to fault and fractured zones.


HISTORICAL EXPLORATION

Airborne surveys were carried out in the 1970s and in 1978 LM&E carried out a lake bottom sediment geochemical program. In 1979, a limited four line (3,500 m) ground magnetic survey was carried out in the Mills Lake area and in 1979 LM&E completed one hole, (28m) in the Elfie Lake area. In 1982, a 51 m hole was completed in the same area with 2 m of oxide iron formation intersected. In 1985, LM&E carried out limited field work in the north part of the Altius ground.

In 2001, IOCC carried out an airborne geophysical survey and although the Altius claim area was recommended by SRK as a high priority area, no follow-up work is recorded.


ALTIUS EXPLORATION

Altius carried out reconnaissance mapping in 2006 and 2007 in conjunction with an airborne geophysical survey in 2007.

Work in 2008 included acquisition of satellite imagery, line cutting, 69.8 km of ground magnetic and gravity surveys, and 6,130 m of diamond drilling in 27 holes of which 24 were completed to bedrock.

click here to view 2008 drill results

 

Additional information about the Kami Project can be found in the technical report filed on SEDAR at www.sedar.com entitled “Feasibility Study of the Rose Deposit and Resource Estimate for the Mills Lake Deposit of the Kamistiatusset (Kami) Iron Ore Property, Labrador for Alderon Iron Ore Corp.” dated effective December 17, 2012 which is filed on SEDAR at www.sedar.com.

Alderon’s operational developmental work on the Kami Project is supervised by Brian Penney, P.Eng., the Chief Operating Officer for Alderon and a Qualified Person as defined by National Instrument 43-101. Mr. Penney has reviewed and approved the technical information above.