Here's to the crazy ones, the misfits, the rebels, the troublemakers, the
round pegs in the square holes... the ones who see things differently -- they're
not fond of rules... You can quote them, disagree with them, glorify or vilify
them, but the only thing you can't do is ignore them because they change
things... they push the human race forward, and while some may see them as the
crazy ones, we see genius, because the ones who are crazy enough to think that
they can change the world, are the ones who do.

Steve Jobs
US computer engineer & industrialist (1955 - 2011)

Monday, October 8, 2012

Expose Alderon Iron Ore Corp - Part 2

Alderon entered 2009 as essentially a shell company, and heavily under the influence of Forbes and Manhattan. Enter the Exploration Group, head quartered in Vancouver (run by Mark Marabito), and Altius Minerals of Newfoundland and Labrador. The Exploration Group was shown until recently as a Forbes and Manhattan company. In February, 2012 the Exploration Group made that association clearer by rebranding itself as Forbes West. Forbes and Manhattan's, and Exploration Group's earliest success in Newfoundland and Labrador was launching Brian Tobin's Thompson Consolidated iron ore mine in Labrador. Their other project with a long hisory in the province is Cross Hair Exploration - a uranium exploration company. They were behind the eight ball developing their uranium project compared to fellow promoters Altius.

Altius, incorporated in Alberta on March 5, 1997, traded on the Alberta Stock Exchange, and then the TSX(1999) and TSE(2007). Altius created Aurora Energy in 2003 with Australian, Fronteer Development Group to develop uranium prospects. Australia's Paladin Energy Ltd now owns Aurora with Altius holding shares and a 2% gross sales royalty. On June 23, 2008 Altius announced an agreement to jointly develop its Kami project in Labrador with Norvista Resources Corporation, a Brian Tobin interest. The joint effort failed to produce and Altius turned to Mark Morabito.

Morabito formed a shell company, 0860132 BC Ltd (Privco) and entered into an agreement with Altius known as the Privco - Altius Option Agreement. Essentially, it had the following elements:

1.) Privco gained the right to a 100% interest in the Kami project;
2.) Privco had to assign that option to a mutually agreed public company listed on the TSX or TSE;
3.) Meet seperate exploration funding targets of $1 million and $5 million within a year at the Kami site;
4.) Altius was to receive a 3% gross sales royalty; and
5.) Altius was to receive 50% of the shares in the public company.

The deal was announced on November 2, 2009. On Decenber 3, 2009 a private placement of 10,000,000 shares was issued by Alderon at $.15 per share. The offering was carried out by Delano Capital Corp, owned by Julian Bharti - Stan Bharti's son, and Axeman Capital Corp, which had a history of brokering offerings for Forbes and Manhattan companies. On December 8, 2009 the Annual Meeting of Alderon authorized a 2 for 1 reverse share split as required by the Privco sale agreement. On December 16, 2009, barely one month after the Altius Option was announced, Mark Morabito announced he had entered into an agreement to sell Privco to Alderon.

2009 was a transitional year for the company as it entered the Forbes and Manhattan fold as a shell company with a future purpose. Its annual financial statement for the year showed a cash balance of $4,920.00 and an accumulated deficit of $20,631,963.00. It was now in the hands of Emprise Capital for the apparent purpose of rescuing it to the point that it could be functional - even as just a shell company. Emprise was to receive 3,500,000 shares as compensation for debts owed to it by the company. The company had reached such a low point that on June 30, 2009 a cease trade order was issued by the BC Securities Commission for failure to provide audited financial statements. The order was revoked upon their submission on August 13, 2009. Alderon was ready for a change for the better. That started in 2010.

On January 15, 2010 Alderon issued another private placement of 10,000,000 shares - this time at $1.00 per share. Delano Capital was again a broker on this placement, as was Axeman Resources Capital and PI Financial Corp.
On January 19, 2010 Alderon completed another requirement of the Privco purchase and replaced its entire board with the Forbes and Manhattan team: Out - Jeff Durno, Robert Chisholm, Aron Buchman and Craig Goldenberger; and In were - Mark Morabito, Stan Bharti, Bruce Humphrey, Brad Boland and Patrick Gleeson. In addition, Altius as the controlling shareholder gained the right to name three members to the board, but chose to name two - John A Baker, and Brian Dalton. On February 19, 2010 Alderon listed on the American NASDAQ exchange.

On March 3, 2010 the Privco/Alderon deal was completed. Mark Morabito received 5,000,000 post consolidation shares in Alderon for acting as essentially the middleman between Alderon and Altius. Altius received 31,778,081 post consolidated shares, and a controlling interest in Alderon. Alderon also agreed to fund exploration on the Kami project of $1 million in the first year and $5 million in total in the first two years . Altius had already completed aerial reconnaissance on the Kami project in 2006-2007, but there remained drilling, etc ahead.

On November 26, 2010 Alderon announced a private placement of 7,300,000 share units . The price per unit was $2.20 and entitled the holder to a warrant of one common share and one half a common share exercisable at $2.80 for a period of 24 months from the closing of the offering. The original offering was valued at $16,060,000.00 with an additional over-allotment option of upto $4,015,000.00. The Alderon press release named Haywood Securities as the lead underwriter. However, Delano Capital Corp, owned by Stan Bharti's son, claims to have conducted the transaction: 9,125,000 units at $2.20 per unit for $20,075,000.00. The press release states there is a 6% commission, so one could assume the return for Delano Capital Corp would have to be around $1,204,500.00. The purchaser of these share units remains confidential.

In Part 3 of this series the Americans and the Chinese arrive at Alderon; Alderon gets political; and Muskrat Falls gains a new champion in Alderon.

1 comment:

  1. And they still all watch each others back. In Newfoundland and Labrador you're either IN on the take or you're being taken.


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