Champion Iron Mines closes $3m deal with Hong Kong investor
Canadian iron ore developer Champion Iron Mines has closed a C$3 million ($2.86 million) strategic investment deal with Hong Kong mining investor Baotou Chen Hua Investment.
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Baotou will buy 15 million shares for $3 million ($2.86 million), which will equate to it owning 11% of the common shares of Champion.
The company and its affiliates have the potential to provide Champion with access to multiple end-users of iron ore in China, and to Chinese companies that have a strong interest in participating in the financing of Champion’s short-term endeavours.
It can also provide a strategic relationship which will help Champion achieve its long-term objectives.
“Baotou’s investment in Champion reaffirms the value of Consolidated Fire Lake North and the marketability of its concentrate product, and is the first step in growing Champion’s presence with Chinese investors” Champion president and ceo Tom Larsen said in a recent statement.
“It also sets the stage for our expanded discussions with Asian steel producers that are seeking lower risk and direct sources of iron ore,” he added.
The proceeds from the transaction will be used to continue the feasibility study and technical work for development of the Consolidated Fire Lake North Project, which is located in the Fermont iron ore district of Quebec.
Production is expected to begin in 2016.
In a recent interview, Jean Luc Chouinard, Champion’s vp of project development, told Steel First that the company plans initially to produce nearly 10 million tpy of iron ore concentrate and 20 million tpy of iron ore sinter concentrate in phase 2 of its development project.
Champion is conducting a feasibility study that will expand production capacity to 18-20 million tpy of iron ore concentrate.