There is no shortage of junior mining companies in Vancouver looking to be bought out, but Mark Morabito believes that is the wrong strategy.
“You have to run your company like you’re going to take it to production or you’ll never get full value [for it],” said the president and CEO of Alderon Resource Corp. (TSX-V:ADV). “Running your company as though you’re going to get taken out is a mug’s game and it’s a recipe for failure.”
His comments came during an interview at his office in Vancouver about his latest venture.
Alderon is focused on its Kami iron ore project in Labrador, Canada’s premier iron district and home to players such as the Iron Ore Co. of Canada and Cliffs Natural Resources Inc. (NYSE:CLF).
Kami is an early stage project that only began to drill for ore this past summer, but Alderon’s executive team includes the former leaders of Consolidated Thompson Iron Mines Ltd. (TSX:CLM).
Thompson recently became one of Canada’s newest iron ore producers when it put its Bloom Lake project into production, located less than 10 kilometres from Kami.
Morabito is confident his management team can strike it rich for a second time in Labrador even though Alderon has yet to prove up a resource at Kami.
Still, his strategy is to position the company so it could eventually put Kami into production on its own despite a common wisdom that input from major mining houses is often the key to success.
“If you run your company as though some big guy is going to come and pick you off, then that big guy will employ every strategy in the book to make your life miserable so he can pick you off at the lowest possible price,” Morabito said. “You must demonstrate to potential suitors and to the market that you are capable of going into production on your own.
Alderon’s shares were valued at $1.63 at press time.
Check out this week’s print edition of Business in Vancouver for more on Alderon.