The Next Consolidated Thompson?

Alderon Resource Corp. has recently released very important news that strongly suggests they can be  the next Consolidated Thompson.  On August 16^th, Alderon announced the appointment of Matt Simpson, a former Iron Ore Company (“IOC”) Mine General Manager, as Chief Operating Officer of Alderon. The very next day, Alderon announced a Memorandum of Understanding with the Innu Nation of Labrador, Canada.  On August 24^th, Alderon released the first set of drill results from its Kami Iron Ore Project. I am looking forward to a continuous flow of drill results over the next four months.

Why the next Consolidated Thompson?

For one thing, Alderon’s management team now includes 4 previous Consolidated Thompson management members including Alderon’s Executive Chairman Stan Bharti, who was the founder and Chairman of Consolidated Thompson, as well as independent director Bruce Humphrey, the previous President of Consolidated Thompson.  Both were key players in not only taking the company from a market cap of only $6.5 million in 2005 to over $1 billion in 2009, but also saw the company from exploration, through development and finally to production.  On that note, I would like to add that Consolidated Thompson’s Bloom Lake Deposit began production in the first quarter of this year.

Another reason why I believe Alderon is following in Consolidated Thompson’s footsteps has to do with the similarity between the two projects.  Kami is located only 6.4 km away from Bloom Lake and the projects have similar mineralization, grade, geology, and metallurgy.  As further drill results are released, I believe that my naming Alderon the next Consolidated Thompson can continue to become more and more of a reality.

A Bigger, Better, Stronger Team

Location Map

Matt Simpson, most recently the Mine General Manager at IOC’s Carol Lake Iron Ore Deposit in Labrador, will be supplementing Alderon’s already excellent management team as the new COO.  Matt Simpson is a valued addition, as he brings with him a great deal of experience that can prove extremely beneficial to Alderon as Kami continues to move towards production.  The Carol Lake Deposit is situated a mere 18 kilometers north of Alderon’s Kami Project, so not only does Matt have a working knowledge of the Labrador Trough, but his experience at Carol Lake includes all aspects of production, mine management, design, and operations.

Future Possibilities

If you review my last coverage on Alderon, you will remember that I discussed several possibilities for Kami moving forward towards production.  Two companies in particular were discussed (Consolidated Thompson and Cliffs Natural Resources) that may have potential interest in taking the Kami deposit should sufficient tonnage and grade prove up.  I would like to once again point out Carol Lake’s proximity to the Kami property.  Could the IOC be yet another suitor?  I still believe that Alderon has the team to take the Kami Project through to production, but with the company generating so much interest lately; it will be interesting to see how things unfold.

Agreement Reached with the Innu Nation of Labrador

Alderon has reached a Memorandum of Understanding (“MOU”) with the Innu Nation of Labrador, Canada, to have a mutually beneficial and long term relationship.  Alderon’s management team has worked out an agreement with the Innu by which both teams can achieve their individual goals in a cooperative manner.  For the Innu Nation, employment and training will be provided with local Innu registered businesses as well as a budget allocated for the Innu to be involved in the environmental monitoring of the Kami project, especially in regard to exploration and development activities.  As for Alderon, the primary goal was to achieve a good working relationship with the only indigenous group in the surrounding area.  This agreement is a major de-risking event and was a key step for Alderon as it continues on its path towards production.

The Results Are In!

Drill Plan Map

The first set of drill results are in and highlight a sample of what we can hope for as drilling at the Kami Iron Ore Project continues.  The company commenced a $7.5 million program on June 1, 2010 with the goal of delineating a resource of around 500 million tonnes at 28-34% iron.  Assays from four drill holes have now been completed and can be seen in the drill plan map to the right, as well as in the section that follows.

Section 20 - Rose Lake Central Zone

The four drill holes include K-10-27, K-10-29 and K-10-30, which were infill holes drilled to confirm the continuity of the zone, and K-10-28 which was drilled 180 meters to the southwest and confirms the extension of the mineralized zone (see the table below for full results).

Assay Results

Hole 28 proves to be very good news for Alderon as it shows that the known mineralized zone is open for expansion!  Mark Morabito, President and CEO of Alderon, said it best when he stated that “these first set of results clearly demonstrate the potential of this project”.  Now that the first set of results have been received, I am confident that we can expect additional drill results every couple of weeks since Mark Morabito is likely to be releasing information as it is received, with full sections and plan maps in order to keep investors up to date.

Bottomline

As Alderon advances with an even stronger management team than it previously had, with good working relationships with the surrounding community, and with exceptional drill results, I am confident that Alderon can be making further announcements that can continue to greatly interest the investment community.  Alderon continues to demonstrate itself as a company with exceptional potential to drive the Kami Project through to production and accomplish its desired goals, and I eagerly look forward to hearing more from the Alderon management team.

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