Champion signs-on offtake partner for Bloom Lake

VANCOUVER (miningweekly.com) – Canadian iron-ore project reviver Champion Iron on Thursday announced that subsidiary Quebec Iron Ore (QIO) had signed an offtake agreement and arranged bridging financing for the restart of the Bloom Lake iron-ore mine, located about 400 km north of the Port of Sept-Îles, in Quebec.

Japanese commodity trader Sojitz Corporation has agreed to take up to three-million dry tonnes a year of high-grade iron-ore for an initial five-year period, once commercial production resumes. The agreement will automatically extend for further five-year terms.

“This agreement marks a significant milestone for Bloom Lake and will ensure effective long-term access for our future high-quality product to some of the world’s largest consumers of iron-ore," stated QIO chairperson and CEO Michael O’Keeffe.

Champion also announced that it had arranged a $40-million bridging financing so that work can start at the mine site during the summer construction season. Work will focus on upgrading the tailings management system, process plant and ordering of long lead time items.

The financing consists of a C$20-million loan from Sojitz and a C$6-million loan from 36.8% QIO equity holder Ressources Quebec. A $14-million equity investment is also being made by Champion, which owns 63.2% of QIO, and the Quebec government proportionate to their respective shares in the company.

The 20-million-tonne-a-year Bloom Lake mine is fully permitted with federal and provincial permits.

Champion in February published the results of a feasibility study on Bloom Lake, demonstrating a financially viable and competitive project in current global markets.

Compliant mineral reserves have been estimated at 411.7-million tonnes grading 30% iron, and the operation is forecast to generate more than $15-billion in revenue over the next 20 years. Champion believes Bloom Lake has the potential to be one of the region’s most important long-life iron-ore mines and a significant contributor to the local and national economies.