Alderon Iron Ore and the Kami Mine Limited Partnership entered into an agreement with Sprott Resource Lending for a $14 million loan facility. The facility will be used to repay the loan due to Liberty Metals & Mining Holdings and provide additional runway for Alderon to continue the re-boot for the Rose Deposit of the Kamistiatusset Iron Ore Property in western Labrador, Canada.
“We recognize and greatly appreciate the confidence and support shown by Sprott in providing this financing. We are pleased to be working with the Sprott team as we continue the re-boot of the Kami Project, which will ultimately benefit all of its stakeholders, including the many local and regional interests,” said Tayfun Eldem, president and CEO of Alderon. “The loan from Sprott will allow Alderon to reduce its overall debt position and provide an extended bridge to the completion of project financing.”
The new facility has an initial term of 18 months and will mature on December 31, 2019. The maturity may be extended for an additional six-month period, subject to certain conditions. Altius Minerals, through a wholly-owned subsidiary, will be participating in the facility by providing $2 million for the principal. The facility will bear interest at 10% per annum, payable monthly.
The terms of the facility also require Alderon to issue a total of $1.05 million in common shares to Sprott and Altius on the closing date. If the maturity date is extended, an additional $350,000 in common shares will be issued.
The closing of the facility is subject to the receipt of all regulatory, stock exchange and other third-party approvals, and satisfaction of other customary closing conditions.
Alderon is an iron ore development company in Canada. Its Kami Project is located within Canada’s premier iron ore district, the Labrador Trough, and is surrounded by two producing iron ore mines.
Sprott is an alternative asset manager with a focus on precious metal and real asset investments. It is based in Toronto with offices in New York, Carlsbad, CA, and Vancouver.
