One phrase: Mines for a Dam. Two words: Twin Falls. Twin Falls are waterfalls located on the Unknown River, Labrador. During the 1950's British Newfoundland Development Corporation (Brinco) had the power development rights on the river. In partnership with Wabush Mines Limited and the Iron Ore Company of Canada, the two mining corporations operating in Western Labrador, Brinco created the Twin Falls Power Corporation to deliver power 115 miles (185 km) west to the two mining operations being developed near the Labrador-Quebec border.
When the dam was finished in 1963, the station had a total capacity of 225 MW with two 115-mile (185 km) long transmission lines at 230,000 volts (or 230 kV), with remote switching at the far end from the station. Twin Falls power was essential to the later power development at Churchill Falls. It helped open up the area and supplied the power required during the construction phase of the project. So a 225 MW dam was built to essentially run two iron ore mines, and infrastructure. Curiously, Brinco was also the corporation that signed the much lamented 1969 Power Contract with Hydro Quebec for the Upper Churchill.
Fast forward almost 50 years, and here we are again - building a dam for mining. Today there are 17 some mines being developed in the Labrador Trough. A few American. A few European. One Brazilian. Two Indian. The remaining six or so Chinese. Its a virtual microcosm of the developing world's strangle hold on the New World financial order of things. The problem for the developers, read juniors and their merchant backers, is the lack of necessary infrastructure to convert promising mining deposits to full scale operations in their own right.
Traditionally, in Newfoundland and Labrador, private businesses have to arrange their own power for such activities as mining. The Twin Falls dam is one example, but there are many others. The problem with that approach for the developers is it adds a massive cost onto the bottom line of each tonne of ore mined, and makes the mining of these deposits unprofitable. That was Credit Suisse's analysis as well when they did a direct comparison to Consolidated Thompson's mine and the developing Kami project which is owned by Alderon http://tinyurl.com/79ey28b . Yes, the same Alderon that has Danny Williams as its "special advisor" to the Chairman of the Board. Credit Suisse essentially says that Alderon- and you could put all the mines developing in Labrador on the same page- is an attractive deposit but lacks the necessary infrastructure to make it profitable. Therefore, they rate it as "speculative".
Alderon is a good example of what is happening with the mines in Labrador, and their connection to the Muskrat Falls development. For starters, here is a look at the insiders who have an ownership interest in Alderon Iron Corp from SEDI, System for Electronic Disclosure by Insiders, Listed Below. Now have a look at the insider report on ownership for Altius, which sold its rights to the Kami project to Alderon for a roughly 40% stake in Alderon Iron Corp, Listed below .
The first thing you are likely to notice is that Altius' directors have their own interest in Alderon - apart from Altius' corporate share of Alderon's ownership. You will also recognize names there from both the Progressive Conservative Party and Liberal Party of Newfoundland. You will notice the recent purchase by Liberty of Alderon shares for $40 million, which will allow the Kami project to be further developed. You will notice the shares held by Mark Morabito - a large number of shares. Mr Morabito is the Chairman and Chief Executive Officer of The Exploration Group, a privately held company headquartered in Vancouver. If you check the Exploration Group's web site you will notice it lists Alderon as one of its companies. Mr. Morabito also sits on the Board of Alderon as its Executive Chairman.
You will also find a gentleman by the name of Stan Bharti as Vice Chairman of Alderon. In reality, Stan Bharti runs the privately owned Forbes and Manhattan Group. A Toronto-based merchant bank specializing in identifying resource projects around the world, providing them with seed capital, taking them public, often arranging foreign capital acquisition of them, and then getting out. Mr. Bharti is a world class player, and his Advisory Board backs that up : General John Abizaid (ret) US Army; General Jay Garner (ret) US Army; General Ron Hite (ret) US Army; General Lewis MacKenzie (ret) Canadian Army; General Sir Michael Rose (ret) British Army (SAS); Larry King (ret) US entertainment legend; Hon Pierre Pettigrew (ret) Canadian Federal Liberal politician; Bernard Wilson; and Peter Boot.
In reality, Forbes and Manhattan appear to run The Exploration Group, which in turn runs Alderon. As an example, the press release announcing Danny Williams appointment to Alderon's Board listed a Toronto office that in reality is the office of Black Iron Inc, a subsidiary of Forbes and Manhattan. Its Vancouver office is in fact the corporate office of The Exploration Group. You get the idea. These companies are one and the same. The bottom line to these gents is "increasing shareholder value". In this case, as there are no shareholders in The Exploration Group and Forbes and Manhattan, they mean "increase the share value so we can make an astronomical return when it gets off the ground." Fair enough. That is what business is about, and the gents at Forbes and Manhattan are doing it all over the world.
What is interesting on the Newfoundland and Labrador level is the politicization of Alderon's management team. I was present at the October PC convention when Danny Williams took the stage to give an emotional presentation on the service of one Garry Norris. He let it be known that Norris was the go to guy for any research or any problem, and that he had served the Party well over the years. Williams let it be known then that Norris was leaving public service and gave him a present from the Party for his service. Norris' retirement was officially announced on November 30, 2010 and took effect on December 3, 2010 - the same day as Danny Williams last day in office. Norris was Deputy Clerk of Executive Council under Brian Tobin and Clerk under Beaton Tulk. Roger Grimes removed him from that position when he became Premier. Norris took on the position of Executive VP of Government and Community Affairs at Alderon effective July 4, 2011 - barely 6 months after retiring from the government. Three days later he is registered as holding 250,000 options/shares in Alderon at a value today of over $800,000.00.
The same announcement from Alderon appointed Todd Burlingame as Executive VP for Environment and Aboriginal Affairs. He also received the 250,000 share handshake two days after he signed on. His duties are described in the release: "Mr. Burlingame will be responsible for all environmental permitting aspects to develop the Kamistiatusset (”Kami”) Project through to production, including acquiring all required environmental approvals. He will also have a lead role in Aboriginal Relations." Just so happens that Burlingame's previous position, that he left to take this one, was Manager of Environment and Aboriginal Affairs with Nalcor.
The Board at Alderon is really reflective of what is at work in Labrador. We've already covered the real power behind the group - Stan Bharti. We have covered his head of The Exploration Group - Mark Morabito. You have Matt Simpson who also doubles as Forbes and Manhattans man in Toronto heading Black Iron Inc, and who is working with the famous Larry King on a mine in the Ukraine (Maybe that's how Danny Williams got that spot on the Larry King show). There is Bruce Humphrey who is a Forbes/Exploration Group man and sits on several of its subsidiaries boards - including Cross Hair Exploration and Minerals which is currently developing an uranium project in Labrador (the
Nunatsiavut Assembly just lifted a ban on uranium exploration there). There is Brad Boland who was Brian Tobin's right hand man at Consolidated Thompson. Then of course there is Brian Dalton and John Baker from Altius. That is the same Dalton and Baker that headed the failed Newfoundland and Labrador Refining Corporation. The same two that were involved in Aurora Energy that is also developing a uranium property in Labrador. The same John Baker that owns Ottenheimer and Baker that has the Newfoundland and Labrador Department of Natural Resources as its key client.
That brings us to the Board's latest addition - Danny Williams. The Danny Williams that went to the Middle East with Kathy Dunderdale to try and get investors to bail out Dalton and Baker's Refining Corp. The same Williams that placed MacDonald as Chair of Nalcor. The same Williams that while in office refused to do a deal with Hydro Quebec on the Lower Churchill, but endorsed Altius' bid to fund it as one of three. The boss of Kathy Dunderdale, who as the new Premier took a trade mission to China to promote junior mining companies. Three of those should sound familiar: Alderon; Altius; and Century. Knowing the players one big question remains: Why do they need Danny Williams as a "Special Advisor" to the Chair? The Forbes and Manhattan/Exploration Group really needs special advice from Danny Williams? Is Danny part of the deal? Hard to say with a public company that sells shares to anyone on the exchange. Surely it's not a political necessity to have the former Premier on the Board. There is his connection to the Muskrat Falls deal. They do need the power. He does have business connections in St. John's, but do they really need him?
The truth is Forbes and Manhattan has done something similar to this before - except it was with former Liberal Premier Brian Tobin. In 2005 Stan Bharti and a group of investors raised a private placement of $1 million to get then Thompson Consolidated - Lundmark Gold Mines off the ground. Mr. Bharti then took over briefly as President. Despite Brian Tobin's recent comments that his old political contacts in China saved the mines bacon http://tinyurl.com/6n5h77n it was a determined effort by Bharti's Forbes and Manhattan Group that kept the struggling company alive. They outline this as one of their accomplishments: