Champion Iron plans to acquire Alderon Iron Ore Corp’s Canada-based Kamistitusset (Kami) iron ore project. The transaction price is pegged at CAD15mn in cash and issue of 4.2mn shares to Sprott and Altius Resources to pay off the debt of CAD19.4mn of Alderon and its affiliates, the company said in a statement.
Champion Iron will also make a finite production payment on a fixed amount of future iron ore concentrate production from the Kami project to Alderon as part of the deal. The deal is likely to conclude in the next quarter.
The high-grade Kami iron ore project is located in Canada’s Newfoundland province in the Labrador Trough near Quebec and is a few kilometers away from Champion’s Bloom Lake iron ore project. A feasibility study in 2018 projected 23-year mine life for the project and an annual output capacity of 7.8mn mt of high-quality concentrate grading 65.2pc iron.
As a part of the acquisition, Champion expects to secure an additional 8mn mt of annual port capacity at Sept-Îles port, which the company currently uses to export its Bloom Lake iron ore concentrate. Champion Iron exports its iron ore concentrate globally and has customers in China, Japan, the Middle East, Europe, South Korea, and India. The company is currently also carrying out a mine expansion at Bloom Lake project to produce 15mn mt per annum from 7.4mn mt earlier. ($1=CAD1.31)