Kami Project on Fast Track to Iron Ore Development

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1 Alderon Resource Corp. (ADV-V: C$1.59) New Idea October 5, 2010 BUY, Venture Risk* 12-month target price: N/A Rodney Cooper, P.Eng., MBA / (416) rcooper@dundeesecurities.com Darcy Donelle, CA / (416) ddonelle@dundeesecurities.com Kami Project on Fast Track to Iron Ore Development We are adding Alderon Resource Corp. to our Mineral Exploration Watch List This exploration company holds an option to acquire 100% of the Kamistiatusset ("Kami") Project located within the Labrador Trough, Canada's most prolific iron ore producing region. Immediate neighbours include Consolidated Thompson's Bloom Lake Mine, Iron Ore Company of Canada's Carol Lake Mine, Cliff's Natural Resources Wabush (Scully) Mine, and Arcelor Mittal Canada's Mont Wright operations. In 2010 approximately 41 million tonnes of iron ore products will be produced from this region. An additional 17 million tonnes of annual capacity expansion is in the planning stages. Competitive tensions may come to play as a new iron ore development opportunity emerges in the region. In 2010, the Company is engaged in a $7.5 million drill program to delineate million tonnes grading between 28-34% Fe. Investors looking for an early stage player in the Canadian iron ore space are urged to consider this stock. The region is well developed to support a new iron ore operation, with roads, public-domain railways and port, low cost hydro-electric power and a well experienced local workforce available. When it comes to iron ore, transportation logistics are all-important. The technical team at Alderon has "decades" of Labrador Trough experience to bring to bear of development plans. The first resource estimate is anticipated within six months. A development decision is potentially only 18 months in the future. The momentum is building in Canadian iron ore space. We view Alderon as a solid opportunity to participate in the first stages of a new prospective development. A DundeeWealth Inc. Company Please see Disclosures and Disclaimers on the last two pages of this report.

2 Alderon Resource Corp. (ADV-V) Background Rating 12-Month Target Price BUY Venture Risk* Not Rated Alderon Resource Corp. is an exploration and development company with the flagship Kamistiatusset ( Kami ) Project situated next to the mining towns of Wabush, Labrador City and Fermont in Western Labrador, Canada. The Company s common shares trade on the TSX Venture Exchange. In connection with the acquisition of Privco, the Company entered into an option agreement with Altius to acquire a 100% interest in the Kami Project upon fulfillment of certain conditions it fully intends to satisfy. Source: Thomson One Management Mark Morabito President and Chief Executive Officer Has over 15 years of experience in public markets in capital raising and corporate development activities with a focus on junior mining and small business venture capital. Stan Bharti Executive Chaiman Has over 25 years of experience in business, management and financing. Mr. Bharti was recently involved in acquiring, restructuring and financing public companies. Over the last 5 years, Mr. Bharti has helped raised over $2 billion in public markets. He has held numerous positions (including CEO) with Consolidated Thompson Iron Mines Ltd from 2005 to Matt Simpson Chief Operating Officer More recently acted as Mine General Manager at the Carol Lake Iron Ore Deposit in Labrador. In the past 8 years, he has worked for the Iron Ore Company of Canada. Financial The Company retained C$13.8 million in cash and cash equivalents at the end of the June 2010 quarter. Alderon s last financing took place in March 2010, raising gross proceeds of $5 million through a flow-through private placement. In total, $14.2 million has been raised by the Company over the six months ended June 30. The Company is guiding for a $7.5 million drill program for We anticipate the Company will end the year with a cash balance of $5.2 million and no long-term debt. Operations / Exploration Kami Iron Ore Project is the Company s main project. It is situated next to the mining towns of Wabush, Labrador City and Fermont. The property consists of 191 claims in Labrador as well as 5 Quebec Mining Title totaling 4,775 hectares. For 2010, Alderon is finaning a $7.5 million drill program designed to delineate million tonnes grading between 28-34% Fe in the inferred and indicated categories. The program commenced on June 1, 2010 and consists of 25,000 meters of drilling in 25 delineation holes and 20 exploration holes. The program will also provide for metallurgical testing, ground geophysics surveys including additional LC, magnetics and gravity, a resource estimate, a scoping study and, finally, some local infrastructure. Company News September 15, 2010: Alderon intersects 31 % Fe over 468 meters (not true width) on the Kami Iron Ore property. All drill holes to date have tested the northeast section of the Rose Lake Central Zone. The latest holes further confirm the continuity as well as the extension of the mineralized zone. August 24, 2010: The Company intersects 30% Fe over meters (not true width) on the Kami Iron Ore property. The results confirmed and expanded the known zone of mineralization. August 17, 2010: Alderon Reaches Memorandum of Understanding with the Innu Nation of Labrador the parties have agreed to an ongoing business relationship concerning the development of the Company s Newfoundland and Labrador exploration and development activities. In return for their consent and support of Alderon s exploration and development activities in Labrador, economic opportunities will be extended to the community members of the Innu Nation. Page 2

3 ALDERON RESOURCE CORP. ADV - TSXV C$ 1.59 Rating BUY Target N/A Shares O/S (MM) 38.5 Risk Venture Float (MM) 23.0 Fully Diluted Shares (MM) Month Return N/A Close C$ 1.59 Basic Mkt. Capitalization ($MM) C$ 61.2 All figures in C$, unless stated otherwise MAIN PROPERTIES MANAGEMENT & COMPANY CONTACTS Mark Morabito President & CEO Kamistiatusset (Kami) *Option to 100% Stan Bharti Executive Chairman Bruce Humphrey Non-Executive Director Jeffery Pontius Non-Executive Director Stage: Resource Delineation CAPITAL STRUCTURE Strike Basic In-the- Proceeds Deposit: Lake Superior-type Banded Iron Formation C$ (MM) Money $MM Shares Outstanding 38.5 Geology: Kami is located in the highly metamorphosed and deformed Options 2015 $ metasedimentary sequence Knob Lake Group of the Grenville Province, Reserved for Altius 31.9 Gagnon terrane of the Labrador Trough ("Trough"), next to and underlain by Archean basement gneiss (Grenville Front). The Trough extends for greater Warrants 2010 $ than 1,000 km along the eastern margin of the Superior Craton from Ungava 2011 $ Bay to Lake Pletipi, Québec. The belt is approximately 100km wide in its 2012 $ central part and narrows substantially to the north and south. The Trough Fully Diluted Shares is comprised of a sequence of Proterozoic sedimentary rocks, including iron formation, volcanic rocks and mafic intrusion. The high-grade OWNERSHIP (est.) Basic % metamorphism of the Grenville Province is responsible for recrystallization * As reported by Bloomberg of both iron oxides and silica in primary iron formation, producing coarse- Insiders % grained sugary quartz, magnetite, and specular hematite schist or gneiss Institutional Holders % that are of improved quality for concentration and processing. Mineralization: Oxide Facies Iron Formation - oxide iron formation ("OIF") consists mainly of semi-massive bands, or layers, and disseminations of magnetite BALANCE SHEET Jun-10 and/or specular hematite in recrystallized chert and interlayered with bands Year-end December ($MM) of chert with minor carbonate and iron silicates. Typical of the Wabush Assets area oxide formation, it is overlain, and underlain respectively by an Upper Cash and Equivalents $13.8 Iron Formation (UIF) sequence and a Lower Iron Formation (LIF) sequence. Other current assets 0.6 Current Assets 14.4 Previous: The earliest geological regord in the southern extension of the Labrador PP&E 0.3 Trough within the Grenville Province was by prospectors who were Other Assets 13.1 searching for gold in The metamorphosed iron formation located near Total Assets $27.8 Wabush Lake was initially recognized by Dr. J.E. Gill in Liabilities Current liabilities $0.9 In the 1970s, airborne surveys were carried out, and in 1978, LM&E carried Long-term debt - out a lake bottom sediment geochemical program. The following year, a Other 3.0 limited ground magnetic survey was carried out in the Mills Lake area as Shareholders equity 23.8 well as the completion of one hole in the Elfie Lake area. In 1985, LM&E Total Liabilities and Equity $27.8 carried out limited field work in the north part of the Altius ground. PROJECTED BURN RATE (estimated) ($MM) In 2001, IOCC carried out an airborne geophysical survey of the Altius Year-end 2009 cash balance $1.5 claim. Although SRK flagged this as a high priority area, no follow-up Exploration Expenditures (est.) (7.5) work is recorded. General and Admin Expense (est.) (2.5) Warrant exercise 0.2 Reconnaissance mapping was carried out by Altius in 2006 and 2007 as Project Financing 14.2 well as an airborne geophysical survey in In 2008, work entailed Capital Expenditures (0.7) involved the acquisition of satellite imagery, line cutting, 69.8 km of ground Year-end 2010 cash balance estimate $5.2 magnetic and gravity surveys, and 6,130 m of diamond drilling in 27 holes. LAST FINANCING Future Plans Scoping study concepts: Date Mar-10 - Production decision made within 18 months Type Private Placement - Capital Expenditures: C$ Million Shares MM Operating Costs: C$30-34/tonne concentrate Price C$ Mass Recovery: approximately 40% Gross Proceeds C$MM Production: 8 million tons per annum Fe concentrate (pellet feed) Warrants 24 months at +66% Fe. - Life of Mine: 21 years. Reserves & Resources Iron t (MM) (Fe %) mt Fe Inf. N/A N/A * Alderon has an option to acquire 100% of Kami through expenditures of C$5 million by November Inf. N/A N/A 2012 and by issuing 31.8 million shares to Altius Resources Inc. The option should be fully exercised in Q4/2010. Upon option conversion, Altius will own 47% of Alderon and retain a 3% gross proceeds royalty. Source: Company Reports, Dundee Estimates, Thomson One, Bloomberg Page 3

4 Disclosures & Disclaimers Dundee Securities Corporation is an affiliate of Dundee Corporation, DundeeWealth Inc., and Goodman & Company, Investment Counsel Ltd. Research Analyst Certification: Each Research Analyst involved in the preparation of this Research Report hereby certifies that: (1) the views and recommendations expressed herein accurately reflect his/her personal views about any and all of the securities or issuers that are the subject matter of this Research Report; and (2) his/her compensation is not and will not be directly or indirectly related to the specific recommendations or views expressed by the Research Analyst in this Research Report. U.S. Residents: Dundee Securities Inc. is a U.S. registered broker-dealer and an affiliate of Dundee Securities Corporation. Dundee Securities Inc. accepts responsibility for the contents of this Research Report, subject to the terms and limitations as set out above. 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They generally pertain to newsflow and do not contain any change in analysts' opinion, estimates, rating or target price. Please refer to formal published research reports for valuation methodologies used in determining target prices for companies under coverage. Please refer to formal published research reports for company specific disclosures and analyst specific disclosures for companies under coverage. Mineral Exploration Watchlist: Dundee Securities Corporation has not initiated formal continuing coverage of Mineral Exploration Watchlist companies. The companies will have recommendations and risk ratings as per our regular rating system, see Explanation of Recommendations and Risk Ratings for details. Risk ratings will be either Speculative or Venture. Speculative Risk rated companies are those companies that have published National Instrument or JORC compliant resources or reliable historic resources and/or economic evaluations (scoping, pre-feasibility or feasibility studies) that could reasonably form the basis of a discounted cash flow analysis. Venture Risk rated companies are those companies that are generally at an earlier stage of exploration and/or development, where no material resource estimate, historic or compliant, exists. No price targets will be set for Mineral Exploration Watchlist companies as there are limited financial metrics upon which to base a reasonable valuation. Valuation methodologies and models will not be provided for Mineral Exploration Watchlist companies. Dundee clients should consult their investment advisor as to the appropriateness of an investment in the securities mentioned. Base Metals & Iron Ore Weekly Dashboard is a compilation of market statistics and media reports that is posted on the Dundee website. The Dashboard does not contain any change in the analyst s opinion, estimates, ratings or target prices. Please refer to formal published research reports for valuation methodologies used in determining target prices for companies under coverage. Please refer to formal published research reports for company specific disclosures and analyst specific disclosures for companies under coverage. Presentations do not include disclosures that are specific to analysts and specific to companies under coverage. Please refer to formal published research reports for company specific disclosures and analyst specific disclosures for companies under coverage. Please refer to formal published research reports for valuation methodologies used in determining target prices for companies under coverage. Dundee Securities Corporation and its affiliates, in the aggregate, may beneficially own 1% or more of a class of equity securities issued by company(ies) discussed in this report. A Research Analyst/Associate involved in the preparation of this report has visited certain material operations of the following issuer(s): Alderon Resource Corp. Details of the visit - October 1st - Kamistiatusset ("Kami") project (Western Labrador). The Research Analyst/Associate and/or Dundee Securities Corporation has been partially reimbursed for expenses by the following issuer(s) for travel to material operations of the issuer(s): Alderon Resource Corp. Page 4

5 Explanation of Recommendations and Risk Ratings Valuation methodologies used in determining the 12-month target price(s) for the issuer(s) mentioned in this report are contained in current and/or prior research. Target Price N/A: a target price is not available if the analyst deems there are limited financial metrics upon which to base a reasonable valuation. BUY: total returns expected to be materially better than the overall market with higher return expectations needed for more risky securities. NEUTRAL: total returns expected to be in line with the overall market. SELL: total returns expected to be materially lower than the overall market. TENDER: the analyst recommends tendering shares to a formal tender offer. *Risk Ratings: risk assessment is defined as Medium, High, Speculative or Venture. Medium: securities with reasonable liquidity and volatility similar to the market. High: securities with poor liquidity or high volatility. Speculative: where the company's business or financial risk is high and is difficult to value. Venture: an early stage company where the business or financial risk is high, and there are limited financial metrics upon which to base a reasonable valuation. Medium and High Risk Ratings Methodology: Medium and High risk ratings are derived using a predetermined methodology based on liquidity and volatility. Analysts will have the discretion to raise the risk rating if it is determined a higher risk rating is warranted. Securities with poor liquidity or high volatility are considered to be High risk. Liquidity and volatility are measured using the following methodology: a) Price Test: All securities with a price <= $3.00 per share are considered high risk for the purpose of this test. b) Liquidity Test: This is a two-tiered calculation that looks at the market capitalization and trading volumes of a company. Smaller capitalization stocks (<$300MM) are assumed to have less liquidity, and are, therefore, more subject to price volatility. In order to avoid discriminating against smaller cap equities that have higher trading volumes, the risk rating will consider 12 month average trading volumes and if a company has traded >70% of its total shares outstanding it will be considered a liquid stock for the purpose of this test. c) Volatility Test: In this two step process, a stock s volatility and beta are compared against the diversified equity benchmark. Canadian equities are compared against the TSX while U.S. equities are compared against the S&P 500. Generally, if the volatility of a stock is 20% greater than its benchmark and the beta of the stock is higher than its sector beta, then the security will be considered a high risk security. Otherwise, the security will be deemed to be a medium risk security. Periodically, the equity risk ratings will be compared to downside risk metrics such as Value at Risk and Semi-Variance and appropriate adjustments may be made. All models used for assessing risk incorporate some element of subjectivity. Risk in relation to forecasted price volatility is only one method of assessing the risk of a security and actual risk ratings could differ. SECURITY ABBREVIATIONS: NVS (non-voting shares); RVS (restricted voting shares); RS (restricted shares); SVS (subordinate voting shares). Ideas of Interest Dundee Securities Corporation from time to time publishes reports on securities for which it does not and may not choose to provide continuous research coverage. Such reports are published as Ideas of Interest. Dundee Securities Equity Research Ratings 99% 88% 77% 66% 55% 44% 33% 22% 11% 0% 85% 40% 25% 14% 1% 0% Buy Neutral Sell % of companies covered by Dundee Securities Corporation in each rating category % of companies within each rating category for which Dundee Securities Corporation or its affiliates have provided investment banking services for a fee in the past 12 months. September 30, 2010 Source: Dundee Securities Corp. Page 5