Alderon has lost its Kami project, in Labrador.
TSX-listed Alderon Iron Ore has confirmed that Sprott Resource Lending would seize the Kami iron-ore project, in the Labrador Trough, after the junior miner failed to repay a $14-million loan that was due by the end of last month.
Alderon said it had explored “all available alternatives”, including a corporate transaction or a further extension with Sprott under a care-and-maintenance scenario.
“Unfortunately despite these efforts, the company has been unable to negotiate an alternative. Sprott has stated it intends to enforce its security and seize the Kami project and all related assets,” it said in a statement issued late on Tuesday.
Alderon was left in the lurch when Chinese group Tungshu withdrew its proposed investment in the project in March, citing the uncertainty created by the Covid-19 pandemic.
Alderon had planned to use a portion of the funds from Tungshu to repay a $14-million loan facility, plus accrued interest and fees, due to Sprott.
David Porter, Adrian Loader, Rolland Morier and Tayfun Eldem have resigned from the board of directors of Alderon.
Eldem has resigned as president and CEO of the company, Kate Lynn-Genzel has resigned as CFO and the company’s remaining officers have also submitted their resignations.
The proposed mine is located in the Labrador Trough and is surrounded by three producing iron-ore mines. Once developed, the Kami mine will operate for 23 years, producing an average of 7.84-million tonnes a year of premium-quality iron-ore concentrate with an iron content of 65.2%.
Chinese group HBIS already owns a 25% interest in Kami LP.