Name and Location
Kamistiatusset (Kami) iron-ore project, Labrador, Canada.

Client
At the end of March, China’s largest steel producer Hebei Iron & Steel Group, completed its initial strategic investment in the Kami iron-ore project of C$182.2-million for 25% interest in the Kami Mine Limited Partnership, of which Alderon owns the remaining 75%.

Project Description
The Kami iron-ore property is 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 ha.

The project’s mineral resource is contained within two zones, Rose Central and Mills Lake.
Rose Central contains measured and indicated resources of 544.4-million tonnes, with a grade of 28.9% total iron and inferred resources of 160.7-million tonnes, with a grade of 28.9% total iron.

Mills Lake contains measured and indicated resources of 181.3-million tonnes, with a grade of 29.8% total iron and an inferred resources of 74.8-million tonnes, with a grade of 29.3% total iron.

The proposed project, as stated in the feasibility study, includes:
• the Rose ore deposit and waste rock disposal areas;
• processing infrastructure, including a crushing and grinding circuit, spiral plant, magnetite plant, and fine tailings thickener;
• a tailings management facility;
• ancillary infrastructure to support the mine and process plant, including a gate and guardhouse, a reclaim water pumphouse, a truck wash bay and repair shop, an electrical substation, administration/office buildings, maintenance offices, a warehouse area and employee facilities, conveyors, a load-out silo, stockpiles, sewage and effluent water treatment systems, mobile equipment and transmission lines;
• a temporary construction camp located off site;
• rail infrastructure, including the rail line connecting to Quebec North Shore & Labrador Railway, the rail loop and the service tracks consisting of 25 km of new track passing to the south and east of the Town of Wabush;
• a 315 kV transmission line.
The proposed project will produce eight-million metric tonnes of iron-ore concentrate a year and will ship concentrate to market through the Port of Sept-Îles facilities at Pointe Noire, Quebec;

Ore processing will take place at the Kami site and will involve:
• the mining of ore from the openpit mine using conventional drill-and-blast techniques and transported by haul trucks;
• the hauling of the ore to the primary crusher close to the pit, with the crushed ore to be delivered to the stockpile and to the process plant by conveyor;
• the grinding, screening and gravity and magnetic concentration;
• the pumping of tailings (process waste) to the tailings impoundment area south of the process plant; and
• the loading of iron-ore concentrate onto gondola rail cars for transportation to the Port of Sept-Îles, where it will be stockpiled and in turn transferred to ships for delivery to market.

The Rose deposit contains a proven and probable reserve of 668.5-million tonnes, with a grade of 29.5% total iron content.

A feasibility study completed on the development of the Rose Central deposit envisions a concentrate production rate of eight-million tonnes a year, with a grade of 65.2% iron.

Value
Capital costs are estimated at $1.27-billion.

Duration
Commercial production is planned for the fourth quarter of 2015.

Latest Developments
Alderon Iron Ore has, through the Kami Mine Limited Partnership, entered into a definitive engineering, procurement and construction management (EPCM) agreement with WorleyParsons Canada Services for the development of the Kami iron-ore project.

Under the terms of the agreement, WorleyParsons will be responsible for the $92.5-million budget to develop the project.

The partnership issued a request for expressions of interest to ten engineering and construction firms in May 2012 and, following an extensive evaluation, WorleyParsons was selected based on its health, safety and environment performance; technical and project management expertise; Newfoundland & Labrador experience; global reputation and financial and commercial parameters.

Alderon subsequently announced that it had entered into an interim engineering and planning services agreement with WorleyParsons, which allowed Alderon to continue to move ahead with detailed engineering.

Brian Penney has been appointed as COO with immediate effect to drive the Kami project through to production.

Meanwhile, Alderon has indicated that the project will not be affected by rail services provider Canadian National Railway’s shelving of the feasibility study for the construction of its proposed C$5-billion rail line and terminal handling facility to serve the Quebec/Labrador iron-ore range in February, owing to Alderon being in the fortunate position of being located close to an existing rail line.

Key Contracts and Suppliers
BBA and Stassinu Stantec (PEA), WorleyParsons Canada Services (EPCM).

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Alderon Resources, tel +1 604 681 8030, fax +1 604 681 8039 or email info@alderonmining.com.
WorleyParsons investor relations – general, Sharon Kelliher, tel +61 3 8676 3439 or email sharon.kelliher@worleyparsons.com .