Here’s my interpretation of Alderon’s June 30, 2014 press release (PDF) issued today. The key piece of material information is sandwiched between two slices of public relations spin:
[…] Alderon has temporarily suspended any further work by its Engineering, Procurement and Construction Management (“EPCM”) contractor, WorleyParsons Canada Services Ltd. (“WorleyParsons”).
The press release later quotes the CEO:
We have the in-house experience and expertise to continue with the next steps, but expect WorleyParsons to resume its role as the EPCM contractor for the Kami Project once a decision to commence construction is reached. [emphasis mine]
So, it seems that Kami has suspended engineering work by its EPCM to conserve cash. This implies that there are doubts as to whether or not Kami will become fully financed. This leads me to believe that:
- I was lucky to sell my shares of Altius Minerals when I did, since Altius owns Alderon shares and a royalty on the Kami deposit.
- Altius’ recent secondary offering made a lot of sense.
- Brian Dalton, Altius’ CEO, probably saw this bad news from Alderon coming because (A) he’s really smart and (B) he sits on Alderon’s board of directors.
*Disclosure: I sold out of my positions in Altius and Alderon. I have no position in either stock, long or short.
EDIT (7/2/2014): WorleyParsons is publicly traded on the ASX under the symbol WOR. Their statement says that the “EPCM contract […] has been temporarily suspended pending completion of the financing plan for the project.”