Alderon Iron Ore Corp · OTC:AXXDF
Alderon Iron Ore — Investor Presentation (March 2017)
23 slides from Alderon Iron Ore's investor presentation, March 2017
Slide 1: Re-booting the Kami Project
Re-booting the Kami Project Investor Presentation ‖ March 2017 ‖ IRON: TSX 1
Slide 2: Disclaimer
Disclaimer Special Note Regarding Forward-Looking Information This presentation 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. For
Slide 3: Recent Developments
Recent Developments Updated PEA Improving Iron complete Ore market Chinese demand is Activity in the expected to be Labrador Re-scoping with Prices recently hit strong through Trough is improved market $90/tonne for the 2020 resuming fundamentals and first time in 2 years lower capex requirements 3
Slide 4: Future of Iron Ore
Future of Iron Ore • Increased supply was significant factor on the weakening of the iron ore price • Majors need to strike balance between oversupply and threatened margins • Urbanization in developing nations is driving demand for steel, led by strong growth in China - Globally, roughly 2 billion
Slide 5: Key Events Leading to PEA
Key Events Leading to PEA • December 2012, Alderon issued its NI 43-101 Report summarizing the results of its Feasibility Study on the Kami Project. • May 2013, Alderon announced the award of the EPCM contract for advancing the project. • August 2013, Alderon announces placement of order for new AG
Slide 6: PEA Highlights
PEA Highlights $1.4B • • • Capital and operating costs significantly reduced $897.5M estimated Initial Capital Cost (USD) Utilization of idling neighbouring assets NPV @ 8% discount rate (USD) 6
Slide 7: Capital savings at the mine site
Capital savings at the mine site Tailings Management Facility • No dam construction for the first 10 years • Large reduction in pipe and pump requirement $374.5M Railway, Roads, and Bridges • No dam construction for the first 10 years • Large reduction in pipe and pump requirement Capital Cost Savin
Slide 8: Reduction in Capex due to re-scoping of project
Reduction in Capex due to re-scoping of project Comparison Points 2017 Re-Scoped PEA* 2012 Feasibility Study* Annual Production (65.2% Fe con) 7.8Mtpa 8.0Mtpa Initial CAPEX $897.5M $1,272.9M Cash operating cost (FOB) $31.05/t $42.17/t Payback period 3.9 years 3.1 years Measured and Indicated Resourc
Slide 9: Summary of Capex & Opex
Summary of Capex & Opex Estimated Average LOM Operating Costs Estimated Capital Costs (M$ US) (US $/t Dry Concentrate) Mine (Including Pre-Stripping) $ 91.8 Mining $ 11.16 Mineral Processing $ 286.3 Mineral Processing $ 5.55 Site Infrastructure and Utilities $ 195.9 General Site $ 0.50 TOTAL DIRECT
Slide 10: Kami's OPEX is projected to be lower than Bloom Lake
Kami’s OPEX is projected to be lower than Bloom Lake* OPEX/Tonne $50.00 $44.62 $45.00 $40.00 $35.00 $31.08 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 Bloom Lake Kami Kami has 30.4% lower OPEX *Based on comparison of Champion Iron’s Feasibility Study announced February 16, 2017 and Alderon’s PEA
Slide 11: Port Access Secured & Power Agreements Completed
Port Access Secured & Power Agreements Completed Access to infrastructure • Construction of C$220M multi-user port complete • Secured access to the facility in return for a C$20M investment • Multi-user platform in deep water up to 23 meters, suitable for large cape-size vessels (250,000dwt) • Loadi
Slide 12: Tailings Management Facility ("TMF")
Tailings Management Facility (“TMF”) Opportunity exists for 100% of Kami Cost of environmental and tailings Tailings to be put in Scully pit management expected to be US$1.04/t 22.9 Mtpa of ROM material expected to produce a Use of Scully Mine will produce cost - 7.8 Mtpa of concentrate savings - 15
Slide 13: Kami Project Optimization
Kami Project Optimization Scully Now Kami Flowsheet Assumptions Rose Pit Pit TMF • Rose Pit and Kami crusher designs remain Kami Scully Crusher Crusher • Kami concentrator built adjacent to Scully concentrator Kami Kami Scully Scully • Overland conveyor extended to Tailings Concentrator Concentrator
Slide 14: Canada's premier iron ore district
Canada’s premier iron ore district • Labrador Trough known for high grade and low impurities • Local skilled workforce of ~15,000 people • Government support is unparalleled • Foreign steelmakers and traders have been active investors in the region in recent years • Low access cost to paved highway
Slide 15: Kami is shovel-ready
Kami is shovel-ready Project is significantly advanced • Feasibility Study completed – December 2012 • Detailed engineering at 52% at the time of suspension in June 2014 • • Post-EA permitting process on-track 30% 3D process model review completed Steps • Major long-lead equipment committed being •
Slide 16: Numerous Milestones Achieved
Numerous Milestones Achieved Project largely de-risked Project • Procurement planning; orders for long lead items (complete) Development • Construction permits (on track) • Port of Sept-Iles Agreement (complete) Infrastructure • Power Purchase Agreement (complete) Agreements • Rail Agreements (acces
Slide 17: What sets us apart...
What sets up apart… Location Infrastructure Partners Management Labrador Trough Ideally Located Strategic Partnerships Capable Team • Safe & stable • 14.5 km to • HBIS Group • Hands-on jurisdiction common-carrier development & railway with 80Mtpa • Liberty Metals & operating experience • Long histor
Slide 18: Strong partners with 100% of production committed
Strong partners with 100% of production committed • HBIS Group (formerly Hebei Iron & Steel) is China’s second largest steelmaker and has invested a total of C$182.2M to date & will purchase 60% of annual production • C$119.9M in project equity for 25% interest in the Kami Project • C$62.3M in corpo
Slide 19: Management Team
Management Team Over 20 years’ experience in public markets with strong focus on junior mining, including capital-raising and corporate development Mark J. Morabito, B.A. J.D. Founding partner in Alderon - led team that struck an off-take agreement with HBIS Group, China’s second largest Chairma
Slide 20: Board of Directors
Board of Directors Over 20 years’ experience in public markets with strong focus on junior mining, including capital-raising and corporate development Mark J. Morabito Founding partner in Alderon - led team that struck an off-take agreement with HBIS Group, China’s second largest B.A. J.D. steel
Slide 21: Capital Structure
Capital Structure Share Structure as of February 28, 2017 $0.80 Shares Outstanding (IRON: TSX) 132,134,061 52 week high Options 4,760,000 Warrants 5,241,436 Fully Diluted 152,111,253 $0.08 Cash & Cash Equivalents CDN $8.85M 52 week low (as Of December 31, 2016) Current share price* $0.55 27% Retail
Slide 22: Investment Highlights
Investment Highlights Improved market Iron ore market is improving fundamentals with Chinese demand and lower capex requirements expected to remain strong with through 2020 re-scoped project Ideal location with access to Ability to capitalize on existing low cost utilities, transport and infrastruct
Slide 23: Contact Information
Contact Information Jennifer Paterson, Manager of Corporate Development Phone: 604-681-8030 ext. 248 Email: info@alderonironore.com Mailing Address 1240 – 1140 West Pender Street Vancouver, BC V6E 4G1 www.alderonironore.com IRON: TSX 23
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