DGAP-News: CHAMPION AND FANCAMP COMPLETEACQUISITION BY CHAMPION OF FANCAMP'S JOINT VENTURE INTEREST IN THE FERMONT PROPERTIESAND RELATED TRANSACTIONS
(firmenpresse) - DGAP-News: Champion Minerals Inc. / Key word(s): Miscellaneous
CHAMPION AND FANCAMP COMPLETEACQUISITION BY CHAMPION OF FANCAMP'S
JOINT VENTURE INTEREST IN THE FERMONT PROPERTIESAND RELATED
TRANSACTIONS
21.05.2012 / 15:00
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Champion Minerals Inc.
20 Adelaide Street East, Suite 301, Toronto, ON M5C 2T6
Tel.: (416) 866-2200
Fax: (416) 361-1333 TSX: CHM
www.championminerals.com
Fancamp Exploration Ltd.
7290 Gray Avenue, Burnaby, B.C. V5J 3Z2
Tel.: (604) 434-8829
Fax: (604) 434-8823 TSXV: FNC
www.fancampexplorationltd.ca
CHAMPION AND FANCAMP COMPLETEACQUISITION BY CHAMPION OF FANCAMP'S JOINT
VENTURE INTEREST IN THE FERMONT PROPERTIESAND RELATED TRANSACTIONS
TORONTO AND VANCOUVER (CANADA), May 18, 2012 - CHAMPION MINERALS INC. (TSX:
CHM; OTCQX: CPMNF; FSE: P02) ('Champion') and FANCAMP EXPLORATION LTD.
(TSXV: FNC) ('Fancamp') announce the completion of the acquisition by
Champion of Fancamp's 17.5% joint venture interest in the Fermont
Properties in the Fermont iron ore district in north-eastern Quebec, which
was not already owned by Champion effective May 17, 2012, following release
from escrow today. The acquisition was paid for by Champion issuing
14,000,000 common shares and 7,000,000 non-transferable warrants to
Fancamp. Each warrant entitles Fancamp to purchase one common share of
Champion at a price of $3.00 per share at any time between two and a half
and three years after the date of issue, subject to acceleration in certain
circumstances. The shares and warrants of Champion are subject to a
four-month regulatory hold period and to a six-year voluntary restriction
on transfer, subject to the consent of Champion. With the acquisition of
those shares and together with shares currently held, Fancamp holds 12.59%
of the shares of Champion on a non-diluted basis.
As a result of the acquisition, Champion now owns a 100% interest in the
Fermont Properties and Champion and Fancamp terminated their joint venture
relating to the Fermont Properties. However, Champion continues to retain
its right of refusal over Fancamp's interest in the Lamellee Property and
Fancamp continues to retain its 50% interest in the 3% royalty on the iron
production from the Fermont Properties.
In connection with the acquisition, Fancamp has obtained from Champion a
permanent and irrevocable waiver of Champion's right to buy-down one-third
of Fancamp's 50% interest in the 3% royalty, which represents a 0.5%
royalty interest. For this waiver, Fancamp paid $2.0 million to Champion.
As a result, Champion retains its right to buy-down the royalty, from a
third party, from 3% to 2.5%.
In connection with the waiver, Champion invested $2,000,000 in Fancamp by
acquiring 8,000,000 common shares of Fancamp from treasury at a price of
$0.25 per share.
Champion also invested $3,000,000 in Fancamp by acquiring 10,000,000 units
of Fancamp at a price of $0.30 per unit. Each unit consists of one common
share of Fancamp and one non-transferable warrant to purchase one common
share of Fancamp at a price of $0.60 at any time between two and a half and
three years after the date hereof, subject to acceleration in certain
circumstances. As a result of regulatory requirements, Champion has agreed
not to exercise warrants where the shares issuable upon exercise would
result in a change of control of Fancamp unless approved by the
disinterested shareholders of Fancamp. The shares and warrants of Fancamp
are subject to a four-month regulatory hold period and to a six-year
voluntary restriction on transfer, subject to the consent of Fancamp. With
the acquisition of those shares and the other shares referred to above,
Champion holds 16.46% of the shares of Fancamp on a non-diluted basis.
As a result of Champion and Fancamp acquiring securities in the other,
Champion and Fancamp have entered into a reciprocal rights agreement
governing certain investor rights and obligations as between them.
Champion and Fancamp will each be restricted from transferring securities
of the other for a period of six years, after which time transfers will be
permitted subject to certain restrictions. Champion and Fancamp will each
be restricted from voting in certain circumstances, including not voting
against the election of any nominee to the Board of Directors proposed by
the other or against any resolutions supported by the Board of Directors of
the other, subject to certain exceptions.
Champion and Fancamp will each be entitled to nominate two persons to the
Board of Directors of the other so long as Champion holds at least
12,000,000 shares of Fancamp and Fancamp holds at least 10,000,000 shares
of Champion.
Effective today, Mr. Paul Ankcorn, one of the nominees of Champion, has
been appointed to the Board of Directors of Fancamp, and Mr. Jean Lafleur,
one of the nominees of Fancamp, has been appointed to the Board of
Directors of Champion. With that appointment, Mr. Ankcorn has resigned from
the Board of Directors of Champion but joins its Advisory Board. The
remaining nominees of Champion and Fancamp will be nominated for election
to the Board of Directors of the other at their respective next annual
meetings of shareholders.
The boards of directors of Fancamp and Champion have each unanimously
determined that the proposed transaction is fair and in the best interest
of their respective companies. Raymond James Ltd, financial advisor to
Fancamp and its board of directors, for this transaction has provided an
opinion to the effect that the consideration offered to Fancamp
shareholders is fair, from a financial point of view, to Fancamp
shareholders. Primary Capital Inc. acted as financial advisor to Champion
and its board of directors for these transactions.
For past services rendered, Fancamp has issued 250,000 common shares at a
price of $0.30 per share to Raymond James Ltd. as part of its compensation.
The shares are subject to a four-month regulatory hold period.
About Champion Minerals Inc.
Champion Minerals is an iron ore exploration and development company with
offices in Montreal and Toronto, and is focused on developing its
significant iron ore resources in the provinces of Québec and Newfoundland
and Labrador. The Company's projects include: the Fermont Projects in
Québec; and the Attikamagen Iron Property in Québec and Labrador.
Champion's Fermont Projects, including the flagship Fire Lake North
Project, are located in Canada's major iron ore producing district, in
close proximity to three producing mines. Champion's team and advisory
board includes mining and exploration professionals with substantial iron
ore expertise to effectively advance the Fire Lake North Project into
production.
Please visit Champion's website at www.championminerals.com. For further
information about Champion, please contact Thomas G. Larsen, President and
CEO, and Jorge Estepa, Vice-President, at (416) 866-2200.
About Fancamp Exploration Ltd.
Fancamp Exploration Ltd. is a Canadian exploration company with an
exceptional inventory of resource projects in various stages of
development, acquired usually by staking, with the Company adding value
through exploration and includes the following commodities; hematite
magnetite iron formations, titaniferous magnetite and hematite,
nickel/copper/PGM, chromite, VMS and gold.
Please visit Fancamp's website at www.fancampexplorationltd.ca. For further
information about Fancamp, please contact Peter H. Smith, Ph.D., P.Eng.,
President, at 514-481-3172 or Michael D'Amico, Bay Street Connect Investor
Relations, at 647-500-6023 (michael(at)baystreetconnect.com).
The statements made in this news release that are not historical facts are
'forward-looking statements' and readers are cautioned that any such
statements are not guarantees of future performance, and that actual
developments or results, may vary materially from those in these
'forward-looking' statements.
This news release includes certain information that may constitute
'forward-looking information' under applicable Canadian securities
legislation. Forward-looking information includes, but is not limited to,
statements about the acquisition, private placement, royalty waiver.
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 the companies' annual information forms, management discussion and
analysis and other securities regulatory filings by the companies 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 forward-looking
information contained in this press release is given as of the date hereof
and is based upon the opinions and estimates of management of the companies
and information available to management as at the date hereof. Each of the
companies disclaims any intention or obligation to update or revise any
forward-looking information, whether as a result of new information, future
events or otherwise, except as required by law.
This press release has been prepared jointly by Champion Minerals Inc. and
Fancamp Exploration Ltd. and no regulatory authority has approved or
disapproved the information contained herein.
End of Corporate News
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