Alderon Iron Ore and the Kami Mine closed a $14 million loan facility with Sprott Resource Lending.
Alderon used the funds received from a settlement with Newfoundland and Labrador Hydro with a portion of the $14 million facility to repay the Liberty Metals & Mining Holdings loan.
The closing of the Sprott transaction comes as Alderon advances its updated feasibility study, scheduled for conclusion this fall. Upon completion, the updated study is expected to demonstrate that the Kami Project is well-positioned to pursue project financing on account of improved project economics initially highlighted in the updated Preliminary Economic Assessment released on November 7, 2017.
“With the closing of the Sprott loan facility and the repayment of the loan from Liberty, Alderon is well positioned to complete its updated feasibility study and re-launch its project financing efforts,” said Tayfun Eldem, president and CEO of Alderon. “The replacement loan is an endorsement of the quality of the Kami Project and provides Alderon with the capital to execute the next steps in the development plan while allowing it to reduce its overall debt load.”
The terms of the Sprott loan facility are:
- Principal amount of $14 million
- Interest at 10% per year, payable monthly
- Original maturity date of December 31, 2019
- Proceeds advanced as a single draw on the closing date
- Proceeds used to repay the existing LMM loan and to reimburse Alderon for amounts that are pre-paid to LMM prior to closing
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Alderon acted as guarantor for the facility. Altius Minerals, through a wholly-owned subsidiary, participated in the facility by providing $2 million of the $14 million principal amount
