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Monday, November 16, 2020 - 11:29:59 PM
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Mining News Pro - Champion Iron has agreed to buy the Kamistiatusset iron-ore project, which is only a few kilometres from its Bloom Lake mine, in Canada
Located in the Labrador Trough in Newfoundland, near the Quebec border, the Kami project until April belonged to Alderon Iron Ore, but Sprott Resource Lending seized the project after the junior miner failed to repay a loan.
Champion will buy the Kami project from Deloitte Restructuring, which is the receiver for Alderon, for a consideration of $15-million in cash, the extinguishment of about $19.4-million in secured debt of Alderon and an undertaking in favour of the receiver to make a finite production payment on a fixed amount of future iron-ore concentrate production from the Kami project.
Champion has exercised an option to purchase the secured debt from Sprott Private Resource Lending, causing the iron-ore miner to become a senior secured creditor of Alderon and its affiliates. As consideration for the secured debt, Champion will issue 4.2-million ordinary shares to Sprott and Altius Resources. If the acquisition is completed, the secured debt will be extinguished as partial consideration for the Kami project.
The Kami project`s prior owner completed an updated feasibility study in September 2018, which indicated that the proposed mine could operate for 23 years, producing an average of 7.84-million tonnes a year of premium-quality iron-ore concentrate with an iron content of 65.2%.
Champion says that it plans revise the project`s scope and update its feasibility study. The company expects to secure an additional eight-million tonnes a year of port capacity, including a pre-payment of port related fees, at the multiuser berth of the port of Sept-Îles, which it currently uses to export iron-ore concentrate from Bloom Lake.
"While our company is rapidly gaining global recognition for its ability to deliver quality iron ore products, the acquisition would further position our company to service the rising demand for high-grade iron-ore concentrate globally,” says CEO David Cataford.
The acquisition is expected to be completed in the fourth quarter.
Alderon was left in the lurch when Chinese group Tungshu withdrew its proposed investment in the project in March, citing the uncertainty created by the Covid-19 pandemic.
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https://www.miningnews.ir/En/News/608370
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