Alderon Iron Ore Corp. (TSX:ADV) (OTCQX:ALDFF) has announced the closing of a strategic investment from Liberty Metals & Mining Holdings (LMM) worth $40 million.
LMM has purchased almost 15 million common shares of Alderon in a private placement, with a price per share of $2.67.
The net proceeds of the placement are intended largely to fund a feasibility study and drilling program for Alderon’s Kami iron ore project near the Labrador mining towns of Wabush and Labrador City, and Fremont, Quebec.
Alderon said the balance of the investment will be spent on general and administrative expenses and securing long-lead equipment.
LMM investor relations spokesman Konstantine Tsakumis estimated the total cost of the Kami project to be $900 million.
“We have a long way to go,” Tsakumis said. “This financing will help cover us for the next year or so. It’s encouraging for our outlook long-term.”
The agreement grants Alderon the right to identify purchasers of its shares, should LMM choose to sell any or all of them at a future date. It also grants LMM a pre-emptive right to participate in Alderon’s future equity financings.
As of press time, Alderon’s share price was down 1.27% to $3.11.
Emma Crawford