Interview with Alderon CEO by Grandich:
http://www.grandich.com/2012/05/grandich-client-alderon-iron-ore-4/Regarding the Hebei investment, I don't understand the phrase, "if the stock price rose or fell between announcement of the deal and closing a contractual mechanism is in place to shift allocation as between the stock price and the project interest." That implies to me the terms can change, but then he proceeds to say the deal will go ahead as announced.
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Q- The share price for Alderon has come off from the $3.42 close at the time of the Hebei announcement. Is there any risk the deal won’t close?
“ The real deal we have with Hebei is for C$194m for 19.9% of the corporate equity and 25% of the project. Our Chairman Mark Morabito was alive to the market volatility issue at the time the deal was being constructed and he convinced Hebei to agree to the C$194m price with the understanding that if the stock price rose or fell between announcement of the deal and closing, a contractual mechanism is in place to shift allocation as between the stock price and the project interest. So, the short answer to your question is that market volatility was considered and factored into the negotiations and both sides are comfortable with the outcome. Look at today’s news release on Liberty Metals and Mining firming up their C$13m commitment alongside Hebei for $13M and you get a strong indication this deal is going ahead as originally announced.
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