MONTRÉAL, July 12, 2017 /CNW
Telbec/ - Champion Iron Limited (ASX: CIA) (TSX: CIA) ("Champion"
or the "Company") is pleased to announce that they secured debt
financing conditional commitments of USD180
million for its subsidiary Québec Iron Ore Inc. ("QIO") from
la Caisse de dépôt et placement du Québec ("Caisse") and Sprott
Resource Lending ("Sprott"). This financing is part of the restart
of Bloom Lake Iron Ore Mine's operations, located near Fermont, Québec.
With the completion and filing of the Bloom Lake Feasibility
Study earlier this year, demonstrating that mining operations at
Bloom Lake are financially viable, Champion has focused on securing
the financing required for the iron ore mine's restart, potentially
as early as Q1 2018. Following the completion of the CAD40 million bridge financing announced in May,
which included a CAD20 million loan
from Sojitz Corporation, QIO and Champion announces it has obtained
further debt financing conditional commitments for up to
USD180 million to partially fund the costs of resuming the
operations at Bloom Lake.
Champion and QIO Chairman and CEO, Michael O'Keeffe, stated, "We recognize and
greatly appreciate the confidence and support shown by Caisse and
Sprott in providing a key element of the required financing to
restart Bloom Lake. We are pleased to be working with the teams at
both Caisse and Sprott and look forward to bringing Bloom Lake back
into production, which would benefit not just Champion, QIO and its
shareholder and investor base, but also the many local and regional
interests as we establish ourselves as a significant player in the
Labrador Trough."
Dušan Petković, Principal of Sprott, commented, "As one of the
largest investors dedicated to the natural resource sector, Sprott
is excited to partner with Champion and la Caisse on the restart of
Bloom Lake. Our partnership with the Champion team is consistent
with our strategy of providing innovative and flexible capital to
maximize the value of exceptional projects."
"The innovative restart strategy put forward by the management
team, Sprott's vast mining expertise, the quality of the assets and
the current market conditions have all come together to bring this
mining project to a new level," says Christian Dubé, Executive
Vice-President, Québec, at Caisse de dépôt et placement du Québec.
"This transaction is aligned with our mining strategy in Québec,
which aims to support businesses in this sector at all stages of
development, from mineral exploration to the start of
operations."
Bloom Lake USD180 million
debt financing conditional commitments
The QIO USD180 million total debt
financing conditional commitments are comprised of two
tranches:
(1) Senior secured
financing
A USD80 million 5-year senior
secured loan is to be provided by Sprott Private Resource Lending
(Collector) LP ("Sprott"), carrying interest at a rate of 7.5% plus
the greater of USD 3 month LIBOR and
1% per annum. The terms of this loan will provide for the issuance
by Champion to Sprott of 3 million common share purchase warrants,
at an exercise price to be determined when the Champion equity
raising referred to below is undertaken and in compliance with the
requirements of the ASX and TSX and subject to the approval of
Champion's shareholders.
(2) Subordinated financing
A USD100 million 7-year
subordinated loan to be provided by Caisse de dépôt et placement du
Québec or one of its subsidiaries ("Caisse"), carrying interest at
a rate of 12% for the first year thereafter at an interest rate
linked to the price of iron ore for subsequent years. Caisse will
be issued 21 million common share purchase warrants by Champion, at
an exercise price to be determined when the Champion equity raising
referred to below is undertaken and in compliance with the
requirements of the ASX and TSX and subject to the approval of
Champion's shareholders.
Each of these debt financings is conditional upon the execution
of the definitive documentation and the satisfaction of other
customary closing conditions.
As Champion will be responsible for issuing common share
purchase warrants to Sprott and Caisse, it will be compensated by
Ressources Québec Inc. ("RQ"), a wholly owned subsidiary of
Investissement Québec, commensurate with their 36.8% interest in
QIO.
One of the conditions of the debt financings requires QIO
shareholders, Champion and RQ, to contribute financially to support
the resumption of operations at Bloom Lake, which amounts to
approximately CAD72 million. The
fonds Capital Mines Hydrocarbures (CMH), managed by Ressources
Québec, has issued a Letter of Intent to provide for its 36.8%
contribution representing approximately CAD27 million, subject
to final approval. Champion intends to conduct other equity
offerings to raise approximately CAD45 million to fund its
contribution.
Shareholders' Approval
Champion intends to obtain shareholders' approval for the
issuance of common share purchase warrants as described above at
its forthcoming Annual General Shareholders Meeting scheduled to
take place in Montreal on
August 18, 2017.
Champion and QIO Chairman and CEO Michael O'Keeffe said that securing conditional
commitments for the debt financings and the recent Framework
Off-Take Agreement signed with Sojitz Corporation were major
achievements for the Company and QIO, providing significant support
for the re-commencement of commercial operations at Bloom Lake,
potentially as early as Q1 2018.
About Bloom Lake
On April 11, 2016, the Company,
through its subsidiary QIO, acquired the Bloom Lake assets from
affiliates of Cliffs Natural Resources Inc. that were subject to
restructuring proceedings under the Companies' Creditors
Arrangement Act (Canada). Québec
Iron Ore Inc. is 63.2% owned by the Company, with the remaining
36.8% equity interest owned by Ressources Québec, acting as a
mandatory of the Government of Quebec.
The Bloom Lake property is located on the south end of the
Labrador Trough, approximately 13 km north of Fermont, Quebec, and 10 km north of the
Mount-Wright iron ore mining operation of ArcelorMittal Mines
Canada. The Bloom Lake Mine is an open pit truck and shovel
operation, with a concentrator. From the site, iron concentrate can
be transported by rail, initially on the Bloom Lake Railway, to a
ship loading port in Sept-Iles,
Québec.
The Bloom Lake Mine has already been authorized for operation
under the federal and provincial environmental authorities. The
project was subject to an environmental impact assessment process
under Section 31.1 of the Québec Environment Quality Act, which led
to the first decree issued by the Quebec government in 2008 authorizing mining
activities at the Bloom Lake site. An updated positive Feasibility
Study on Bloom Lake has being completed and is available under the
Company's profile on SEDAR (www.sedar.com).
About Champion
Champion is an iron development and exploration company, focused
on developing its significant iron resources in the south end of
the Labrador Trough in the province of Québec. Following the
acquisition of its flagship asset, the Bloom Lake iron ore
property, the Company's main focus is to implement upgrades to the
mine and processing infrastructure it now owns while also advancing
projects associated with improving access to global iron markets,
including rail and port infrastructure initiatives with government
and other key industry and community stakeholders.
Champion's management team includes professionals with mine
development and operations expertise who also have vast experience
from geotechnical work to green field development, brown field
management including logistics development and financing of all
stages in the mining industry.
For additional information on Champion Iron Limited, please
visit our website at www.championiron.com
About Sprott
Sprott is an alternative asset manager and a global leader in
precious metal and real asset investments. Through its subsidiaries
in Canada, the US and Asia, the company is dedicated to providing
investors with best-in-class investment strategies that include
Exchange Listed Products, Alternative Asset Management and Private
Resource Investments. The company also operates Merchant Banking
and Brokerage businesses in both Canada and the US. Sprott is based in
Toronto with offices in
New York, Carlsbad and
Vancouver and its common shares
are listed on the Toronto Stock Exchange under the symbol
(TSX:SII). For more information, please visit
www.sprottinc.com.
Sprott Resource Lending is a globally recognized leader in
natural resource financing and specializes in providing flexible
debt solutions to mining companies. Since joining Sprott, the team
has financed more than $1.0 billion
in bespoke private debt investments. For more information, please
visit www.sprottlending.com.
About Caisse de dépôt et placement du Québec
Caisse de dépôt et placement du Québec (CDPQ) is a long-term
institutional investor that manages funds primarily for public and
parapublic pension and insurance plans. As at December 31, 2016, it held $270.7 billion in net assets. As one of
Canada's leading institutional
fund managers, CDPQ invests globally in major financial markets,
private equity, infrastructure, real estate and private debt. For
more information, visit cdpq.com, follow us on Twitter @LaCDPQ or
consult our Facebook or LinkedIn pages.
This news release includes certain information that may
constitute "forward-looking information" under applicable Canadian
securities legislation. All statements, other than statements of
historical facts, included in this news release that address future
activities, events, developments or financial performance
constitute forward-looking information. The use of any of the words
"will", "expect", "anticipate", "intend", "believe", "plan",
"potential", "outlook", "forecast", "estimate" and similar
expressions are intended to identify forward-looking information.
Forward-looking information is necessarily based upon a number of
estimates and assumptions that, while considered reasonable, are
subject to known and unknown risks, uncertainties, and other
factors which may cause the actual results and future events to
differ materially from those expressed or implied by such
forward-looking information, including the risks identified in
Champion's annual information form, management's discussion and
analysis and other securities regulatory filings made by Champion
on SEDAR (including under the heading "Risk Factors" therein).
There can be no assurance that such information will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such forward-looking
information. Accordingly, readers should not place undue reliance
on forward-looking information. All of Champion's forward-looking
information contained in this press release is given as of the date
hereof and is based upon the opinions and estimates of Champion's
management and information available to management as at the date
hereof. Champion disclaims any intention or obligation to update or
revise any of its forward-looking information, whether as a result
of new information, future events or otherwise, except as required
by law.
SOURCE Champion