 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.
The Attikamagen Option and Joint Venture
On May 12, 2008, the Corporation and Labec Century Iron Ore Inc. (“Labec”)
signed a $12,5000,000 definitive option and joint venture agreement, as
amended July 9, 2009 and March 25, 2010 (the “Attikamagen Agreement”) to
allow Labec to earn up to a 60% interest in the Attikamagen Property.
Pursuant to the March 25, 2010 amendment the dates for remaining payments by
Labec in the Attikamagen Agreement were extended by one year and the
$12,500,000 exploration expenditures required to be funded by Labec to earn
up to a 60% interest have been increased by $500,000 to $13,000,000 In order
to earn an initial 51% interest, Labec must incur a total of $7,500,000 in
exploration expenditures on the Attikamagen Property, of which $2,500,000
has been incurred and an additional $5,000,000 must be incurred in two
remaining yearly increments of $2,500,000 per year in staged expenditures by
March 26, 2012. To increase its interest to 56%, Labec must incur an
additional $2,500,000 exploration expenses by March 26, 2013 and to increase
its interest to 60%, Labec must incur a further $3,000,000 exploration
expenses by March 26, 2014 for a total of $13,000,000. Champion will remain
manager and operator of the Attikamagen Property until a 51% interest
therein is vested in Labec. After Labec completes its earn-in, Labec and the
Corporation will form a joint venture reflective of their proportionate
ownership interests in the Attikamagen Property.
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