
Champion Minerals Inc.’s Attikamagen Lake Iron Property (the “Attikamagen
Property”) comprises 946 mineral exploration claims totaling 310 km2 in
western Labrador and northeastern Quebec, and covers approximately 60 km of
regional, NW-SE trending strike length. The Attikamagen Property is located
15 km northeast of Schefferville, Quebec, the hub of a major iron-ore mining
camp from 1953 to 1983. The Attikamagen Property hosts a Superior-type iron
formation with significant potential and characterized by
massive hematite/magnetite iron oxide, upon which only limited geological
mapping and surficial sampling has been carried out since its discovery 80
years ago. Detailed geological bedrock mapping, airborne geophysical surveys
and extensive surface sampling have been carried out by Champion to quantify
the iron formation over considerable strike-length. This exploration work
has helped to target areas for drilling.
On May 12, 2008, Champion Minerals Inc. (“Champion”) closed a C$1.5 million
financing and signed a definitive option and joint venture agreement that
allows Labec Century Iron Ore Inc. (CIOI) to earn up to a 60% interest in
the Attikamagen Property by expending up to C$12.5 million in exploration
and development work. CIOI is a member of the Century Iron Ore Group (CIOG),
which is based in the Far East and has experience, expertise and an
extensive network in the international iron ore industry. CIOG is focused on
developing and supplying iron resource products to China, today’s largest
and fastest-growing consumer of iron ore.
Under the terms of the option and joint venture agreement, CIOI can earn an
initial 51% interest in the Attikamagen Property by funding C$7.5 million
over 3 years, in yearly increments of C$2.5 million towards the exploration
and development of the Attikamagen Property. After earning the initial 51%
interest, CIOI will have the option to increase its interest in the
Attikamagen Property to 56% by expending a further C$2.5 million in Year 4,
and to 60% by expending an additional C$2.5 million in Year 5. After CIOI
completes its earn-in, CIOI and Champion will form a joint venture
reflective of their proportionate ownership interests in the Attikamagen
Property.
Champion is pleased to have the strategic involvement of CIOI in the
exploration and development of the Attikamagen Property. Champion will
benefit from the expertise of CIOI and will seek to establish, even at this
early stage, end-user contracts for the potential iron-ore production from
the Attikamagen Property. CIOI brings extensive experience in supplying raw
materials, particularly iron ore, to China. Champion's management is of the
opinion that the Attikamagen Property has excellent potential to host a
significant iron resource. Champion is also working with BBA Inc. of
Montreal, Quebec, to employ their geological, engineering and economic
expertise. Champion expects to determine, in the near future, the quality
and volume of the Attikamagen Property’s iron-rich member(s), and to
determine the highest recoverable iron grades.
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