DGAP-News: CHAMPION IRON MINES CLOSES $3.0 MILLION STRATEGIC INVESTMENT WITH HONG KONG MINING INVESTOR
(firmenpresse) - DGAP-News: Champion Iron Mines Limited / Key word(s): Miscellaneous
CHAMPION IRON MINES CLOSES $3.0 MILLION STRATEGIC INVESTMENT WITH HONG
KONG MINING INVESTOR
01.08.2013 / 13:30
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NEWS RELEASE
CHAMPION IRON MINES CLOSES $3.0 MILLION STRATEGIC INVESTMENT WITH HONG KONG
MINING INVESTOR
TORONTO, ONTARIO--(Marketwire - August 1, 2013) - CHAMPION IRON MINES
LIMITED (TSX:CHM)(OTCQX:CPMNF)(FRANKFURT:P02) ('Champion' or the 'Company')
is pleased to announce that it has completed a private placement financing
with Baotou Chen Hua Investments Limited ('Baotou' or the 'Purchaser'), a
corporation, based in Hong Kong, for the acquisition by Baotou of
15,000,000 Units (the 'Units') at a subscription price of $0.20 per Unit
for aggregate proceeds of $3,000,000 (the 'Transaction'). Baotou is a Hong
Kong investment company the principal of which is a mining entrepreneur
with substantial interests in Chinese iron ore and rare earth deposits.
Each Unit consists of one common share and one common share purchase
warrant (the 'Warrant'), with each whole Warrant exercisable for one common
share at a price of $0.25 per share for a period of 24 months from closing.
All securities acquired pursuant to this Transaction will be subject to a
four (4) month hold period. Champion has agreed to pay an 8% cash
commission, in the aggregate, to an arm's length finder. With the closing
of the Transaction Champion's cash position is approximately C$16 million.
Baotou became interested in Champion as it has advanced its Consolidated
Fire Lake North Project into a large iron resource and recognized the
Company's success and excellent pre-feasibility study results. From various
discussions held with Baotou's representatives, management of Champion is
confident that Baotou and its principals and 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
financing Champion's short-term endeavours as well as providing strategic
relationships which will assist Champion in its long-term objectives.
Baotou's industrial and financial contacts within China are substantial
and, with Baotou's initial investment in Champion now completed, Baotou's
interest is aligned with that of management. Champion will be the
beneficiary of Baotou providing as much assistance to Champion as possible
with the introduction of its business network to the Company.
Tom Larsen, President and CEO of Champion said, 'We are very pleased and
encouraged with this strategic investment from Baotou, whose experience and
network in China will be instrumental in Champion's search for a project
partner for our 100%-owned Consolidated Fire Lake North Project. 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. It also sets the stage
for our expanded discussions with Asian steel producers that are seeking
lower risk and direct sources of iron ore.'
Private Placement Highlights
- Baotou has subscribed for 15,000,000 Units of Champion at a price of
$0.20 per Unit which resulted in Baotou holding approximately 11% of
the common shares of Champion post-closing on a non-diluted basis.
- So long as Baotou holds at least 10% of the outstanding shares of
Champion, Baotou will have a pre-emptive right to participate in any
financing (a 'Financing') to maintain its percentage interest in the
outstanding common shares of Champion on a non-diluted basis. Baotou
will also have a participation right which shall terminate 18 months
from the closing date, which grants Baotou the right to participate as
the initial subscriber in any Financing completed by Champion in an
amount up to $4,000,000.
- So long as Baotou holds more than 10% of the outstanding shares of
Champion, Baotou will be entitled to nominate one person to Champion's
Board of Directors. In the event that Baotou holds more than 20% of
the outstanding shares of Champion, Baotou will be entitled to nominate
an additional person to Champion's Board of Directors.
- For a period of two years, Baotou will not vote its Champion shares
against the election of any nominees to the Board of Directors proposed
by Champion, against any resolutions supported by the Board of
Directors of Champion or in favour of any resolutions not supported by
the Board of Directors of Champion, subject to certain exceptions.
- Baotou will be restricted from transferring securities of Champion for
a period of one year following the closing, subject to certain
exceptions and procedures. For an additional year, there will be
certain conditions and restrictions on Baotou's ability to sell or
transfer the Champion securities.
- Baotou has undertaken to use commercial best efforts to introduce a
strategic investor for Champion to invest in its properties and
Champion has agreed to co-operate with Baotou on a non-exclusive basis
and to compensate Baotou if it is successful within 18 months after
closing.
The proceeds of the transaction will be used to continue the feasibility
study and technical work in connection with the development of the
Consolidated Fire Lake North Project in the Fermont Iron Ore District,
Quebec.
About Champion Iron Mines Limited
Champion is an iron exploration and development company with offices in
Montreal and Toronto, and is focused on developing its significant iron
resources in the provinces of Québec and Newfoundland&Labrador. Champion
holds a 100% interest in the Fermont Iron Holdings located in Quebec and a
44% interest in the Attikamagen Iron Project located in both Québec and
Labrador. The Attikamagen Project is under option to Labec Century Iron Ore
Inc. ('Labec'), a subsidiary of Century Iron Mines Corporation, under which
Labec can earn up to a 60% interest. Labec has requested a transfer of a
further 4% to increase Labec's holding to 60% under its option agreement
with Champion and to further increase Labec's interest and dilute
Champion's interest pursuant to ongoing exploration programs. Champion is
undertaking its due diligence investigations with respect to the requests.
Champion's Fermont Iron Holdings, including its flagship Consolidated Fire
Lake North Project, are located in Canada's major iron ore producing
district, in close proximity to five producing iron mines, existing
transportation and power infrastructure. Consolidated Fire Lake North is
located immediately north of Arcelor Mittal's operating Fire Lake Mine and
60 km south of Cliffs Natural Resources Inc.'s Bloom Lake Mine in
northeastern Québec. Champion's management and advisory board includes
mining and exploration professionals with the mine development and
operations experience to build, commission, and operate the future
Consolidated Fire Lake North mine.
For further information please contact:
Thomas G. Larsen, President and CEO, or Jorge Estepa, Vice President at
Tel: (416) 866-2200.
For additional information on Champion Iron Mines Limited, please visit our
website at www.championironmines.com.
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 planned operations at the Company's projects, including
its joint venture projects. 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 forms, management discussion and analysis and other securities
regulatory filings 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.
This press release has been prepared by Champion Iron Mines Limited and no
regulatory authority has approved or disapproved the information contained
herein.
End of Corporate News
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