VANCOUVER, British Columbia, Dec. 05, 2017 (GLOBE NEWSWIRE) -- Alderon Iron Ore Corp. (TSX:IRON) ("Alderon" or the “Company”) releases an update to the independent Economic Impact Assessment (“EIA”) of the Kamistiatusset (“Kami”) Iron Ore Project, located in the Labrador Trough, Canada’s premier iron ore district. The EIA outlines significant economic benefits and positive implications for the economies of Newfoundland and Labrador, Quebec and Canada.
The Kami Project is expected to create more than 100,600 full-time equivalent jobs across Canada, resulting in $7.6 billion in incomes to workers and businesses. In addition, Kami is expected to generate $5.1 billion in total revenue for federal and provincial treasuries and $19.5 billion in GDP over a 26-year period, including two years of construction activities.
Strategic Concepts, Inc. (“SCI”) prepared the EIA along with Dr. Wade Locke of Memorial University on behalf of Alderon for the purposes of evaluating the economic impacts expected from the development of the Kami Project. The Kami Project’s economic impacts were analyzed for the economies of Newfoundland and Labrador, Quebec, Ontario, the other Provinces of Canada and Canada as a whole.
“China’s bid to reduce harmful emissions is driving an increase in domestic steel mills switching to high-grade iron ore products with fewer impurities,” stated Mark Morabito, Chairman and CEO of Alderon.
“For the type of iron ore concentrate that the Kami Project will produce (in the order of 65% Fe), there is already a significant spread to the normal Platts 62% iron ore index price, that, on September 1, 2017, was pegged at US$23.50 per tonne; this spread has widened over the last 18 months and prices for high-grade ore are expected to continue to increase as environmental regulation becomes more stringent. The high-grade, low deleterious element iron ore that will be produced at Kami is the perfect composition to be blended with Pilbara iron ore and will fetch a premium price because of its quality. Because of these changes in the marketplace the Kami Project is now well positioned to progress into development.”
Government Support of Kami Project
“I am excited by Alderon’s renewed interest in the Kami Project, a project that will bring considerable wealth and growth to the Labrador West region,” said Graham Letto, MHA for Labrador West. “We are seeing a greater demand for high quality iron ore on the world markets, a product that the Kami Project can deliver. I am looking forward to working with Alderon and their partners to move the project forward.”
"I am excited that the Kami Project will bring jobs to the people of Labrador, and bolster economic development in our province,” said Yvonne Jones, Member of Parliament for Labrador. “We have a wealth of natural resources here, but our greatest resource is still the hardworking people who call Labrador home. Alderon and HBIS Group’s Kami project is a clear indication that we are serious about growth and ready to succeed in the international resources market."
Kami’s Economic Impact Estimated for Newfoundland and Labrador
The EIA estimates that over the life of the project, Kami will generate the following benefits for the people, communities and government of Newfoundland and Labrador. (All dollar estimates are denoted in Canadian dollars unless otherwise stated.):
- $2.2 billion in direct, indirect and induced incomes to workers and local businesses;
- Over 32,000 person years of direct, indirect and induced employment during construction and operations;
- Approximately $2.3 billion in treasury contributions from total direct, indirect and induced taxes; and
- Approximately $16 billion in contribution to the provincial GDP through incomes generation and the production undertaken.
Kami’s Economic Impact Estimated for Quebec
The independent assessment anticipates that the Kami Project will generate the following benefits for the people, communities and the government of Quebec:
- $3.3 billion in direct, indirect and induced incomes to workers and local businesses;
- 42,400 person years of direct, indirect and induced employment during construction and operations;
- $462 million in treasury contributions through direct, indirect and induced taxes; and
- $3.3 billion contribution to the provincial GDP.
Kami’s Economic Impact Estimated for Canada
The independent assessment calculates that the Kami Project will generate the following benefits for the people, communities, provincial governments and the Government of Canada:
- $7.6 billion in direct, indirect and induced incomes to workers and local businesses;
- 100,600 person years of direct, indirect and induced employment during construction and operations;
- $5.1 billion in total treasury contributions, including $2.2 billion in total contributions to the Federal treasury, through direct, indirect and induced taxes; and
- $21.3 billion in contribution to the national GDP through income and production.
The Economic Impact Assessment was based on the production profile, operating cost assumptions and capital cost projections included in the technical report entitled “Update to the Re-Scoped Preliminary Economic Assessment of the Kamistiatusset (Kami) Iron Ore Property, Labrador”, dated effective November 7, 2017 (the “Updated PEA”). A copy of the Updated PEA is available on SEDAR at www.sedar.com. The economic impacts associated with the development of Kami were analysed from a number of perspectives, including cash-flow, employment, income, GDP, taxation and sensitivity to changes in commodity prices, capital and operating costs.
About Alderon Iron Ore Corp.
Alderon is a leading iron ore development company in Canada. The Kami Project, owned 75% by Alderon and 25% by HBIS Group Co. Ltd. (formerly Hebei Iron & Steel Group Co. Ltd.) (“HBIS”) through The Kami Mine Limited Partnership, is located within Canada’s premier iron ore district and is surrounded by two producing iron ore mines. Its port handling facilities are located in Sept-Îles, the leading iron ore port in North America. HBIS is Alderon’s strategic partner in the development of the Kami Project and China’s second largest steel producer.
For more information on Alderon, please visit our website at www.alderonironore.com.
ALDERON IRON ORE CORP.
On behalf of the Board
"Mark J Morabito"
Chairman & CEO
Alderon is part of the King & Bay group of companies. King & Bay is a merchant bank that specializes in identifying, funding, developing and supporting growth opportunities in the resource, aviation, and technology sectors.
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Cautionary Note Regarding Forward-Looking Information
This press release contains "forward-looking information" within the meaning of the U.S. Private Securities Litigation Reform Act and Canadian securities laws concerning anticipated developments and events that may occur in the future. Forward-looking information contained in this press release include, but are not limited to, statements with respect to (i) the details of the re-scoping of the Kami Project (ii) expected infrastructure requirements; and (iii) the results of the EIA including the number of jobs created, expected tax revenue and expected GDP and income contributions.
In certain cases, forward-looking information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Forward-looking information contained in this press release is based on certain factors and assumptions regarding, among other things, receipt of governmental and other approvals, the estimation of mineral resources, the realization of resource estimates, iron ore and other metal prices, the timing and amount of future development expenditures, the estimation of initial and sustaining capital requirements, the estimation of labour and operating costs, the availability of necessary financing and materials to continue to explore and develop the Kami Project in the short and long-term, the progress of exploration and development activities, the ability of the Company to use the multi-user terminal facility at the Port of Sept-Îles, the receipt of necessary regulatory approvals, the estimation of insurance coverage, assumptions with respect to currency fluctuations and exchange rates, environmental risks, title disputes or claims, and other similar matters. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.
Forward looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include risks inherent in the exploration and development of mineral deposits, including risks relating to changes in project parameters as plans continue to be redefined including the possibility that mining operations may not commence at the Kami Project, risks relating to variations in mineral resources, grade or recovery rates resulting from current exploration and development activities, risks relating to the ability to access rail transportation, sources of power and port facilities, risks relating to changes in iron ore prices and the worldwide demand for and supply of iron ore and related products, risks related to increased competition in the market for iron ore and related products and in the mining industry generally, risks related to current global financial conditions, uncertainties inherent in the estimation of mineral resources, access and supply risks, reliance on key personnel, operational risks inherent in the conduct of mining activities, including the risk of accidents, labour disputes, increases in capital and operating costs and the risk of delays or increased costs that might be encountered during the development process, regulatory risks, including risks relating to the acquisition of the necessary licences and permits, financing, capitalization and liquidity risks, including the risk that the financing necessary to fund the exploration and development activities at the Kami Project may not be available on satisfactory terms, or at all, risks related to disputes concerning property titles and interest, risks related to disputes with Aboriginal groups, risks related to insufficient capacity being available for the Company to access the multi-user terminal facility at the Port of Sept-Îles, environmental risks and the additional risks identified in the “Risk Factors” section of the Company’s Annual Information Form for the most recently completed financial year, or other reports and filings with applicable Canadian securities regulators. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information is made as of the date of this press release. Except as required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking information.