Alderon Iron Ore, a major iron ore development company in Canada, is in advanced talks with Asian steelmakers and commodity-trading companies for the sale of 30% to 40% of the Kami mine's annual iron ore output.
The Kami project, owned 75% by Alderon and 25% by Hebei Iron & Steel Group (HBIS), is located within Canada's premier iron ore district and is surrounded by four producing iron ore mines.
The property includes 305 claims in Labrador in a total of 7,625 ha.
Alderon Iron Ore is set to finalise a deal with a second Asian partner within weeks.
Alderon Iron Ore Chairman Mark Morabito told Bloomberg that a formal agreement could be submitted before October, followed by a comprehensive debt-financing package within three months.
"The market by the end of the year will have full visibility on how this project is being financed and who is financing it," Morabito added.
Alderon may raise $100m in the deal with the Asian partner, which may also include the sale of its stake.
Companies that are said to be in discussions with Alderon to buy its stake include Jiangsu Shagang Group and Jianlong Steel Holdings.
In 2012, Hebei Iron & Steel Group, China's largest steelmaker, inked an agreement with the company for the Kami project.
Steel manufacturers, especially from China, India, and Japan, intend to secure iron-ore supplies and are looking out for acquisitions.
According to the Steel Index, iron ore prices rose to their highest level in five months on Tuesday due to a surge in China's property sector.
Spot iron ore price grew from $5.60 a tonne to $138.70 a tonne, recording a 25% surge compared to $110 a tonne in June 2013.
From 2010 to 2012, Alderon carried out a total of 62,247m of drilling on the Kami property.
Image: Iron ore pellets are used in steel production. Photo: Courtesy of Lars Lentz.