Champion has an 82.5% direct interest in the 384.6 km2 Fermont Iron Property
consisting of 16 strategic iron-rich mineral concessions in the Fermont Iron
Ore District of North-Eastern Québec, situated 250 km north of the St.
Lawrence River port town of Port-Cartier and centered 60 km southwest of
Fermont. The Fermont Property’s 16 claim blocks are grouped into three
clusters, termed Clusters 1, 2 and 3. The Fermont Property’s claim blocks
are adjacent or proximal to Consolidated Thompson Iron Mines Ltd.’s
properties (TSX: CLM) and ArcelorMittal's properties (NYSE: MT). They are
all located close to power, roads and rail connecting to ports on Quebec's
northern shore of the St. Lawrence seaway.
On November 19, 2009, Champion announced an initial Mineral Resources
Estimate on the Bellechasse and Fire Lake North Claim Blocks (“Bellechasse”
and “Fire Lake North”) under National Instrument (“NI”) 43-101 guidelines.
The Mineral Resource Estimate totals 503.3 million tonnes grading 28.0% Iron
in the Inferred Mineral Resources category. Bellechasse hosts 215.1 million
tonnes grading 28.7% Iron; whereas Fire Lake North hosts 288.2 million
tonnes grading 27.5% Iron (all at a 15% Iron cut-off grade).
Champion previously announced 8 claim blocks with historical Mineral
Resources of 694 million tonnes grading 30.4% Iron, but now after 2 of the 8
claim blocks (Bellechasse and Fire Lake North) host a current MRE, there are
6 remaining claim blocks that host historical Mineral Resources of 578
million tonnes grading 30.4% Iron (Paquet, 1963; Ministère des ressources
naturelles et de la faune Québec Assessment File GM 13035).
Champion and Fancamp Exploration Ltd. (“Fancamp”; TSX-V: FNC) are currently
in an 82.5% / 17.5% joint venture on the Fermont Property. Champion earned
an initial 65% interest in all 16 claim blocks comprising the Fermont
Property by expending $C6 million in exploration expenditures, making cash
payments totalling C$1 million, and issuing 2.9 million shares. Champion
acquired a further 17.5% from The Sheridan Platinum Group (“Sheridan”)
(refer to the Company news release dated June 28, 2010) in July 2010 through
the issuance of 4 million shares from treasury to Sheridan and agreeing to
pay C$2 million in cash (C$1 million of which was paid on closing, plus two
further payments of C$500,000 each, payable 12 months and 18 months after
closing). Both Fancamp and Sheridan still retain a 3% Net Smelter Returns
royalty, which may be reduced to 2% by Champion paying C$3 million. The
agreement also includes a right of first refusal on the Lamêllée Lake Claim
Block.
On August 4, 2010 Champion announced that a new NI 43-101 Mineral Resources
Estimate (the “Mineral Resources”) for Fire Lake North will be released
prior to the end of September 2010, which will coincide with the start-up of
the next drilling campaign on Fire Lake North.
The new Mineral Resources will integrate the 2010 winter drill campaign
results which yielded intersections of 171 metres grading 36.2% Total Iron
(drill hole FL10-21), 134 metres of 38.3% Total Iron (FL10-6), and 198
metres of 38.3% Total Iron (drill hole FL10-24) (refer to the Champion news
releases dated May 4, 2010 and May 18, 2010). The 2010 winter drill campaign
was centered on the East Limb and West Limb target areas which together with
the Don Lake target, have already yielded Inferred Resources* of 288.2
million tonnes grading 27.5% Total Iron (refer to the Champion news release
dated November 19, 2009).
Champion continues to explore the other Cluster 2 claim blocks, including
the ongoing 7,000 m drill campaign on Harvey-Tuttle, with the objective of
outlining several 200 to 500 million tonne lenses. The Fire Lake North iron
formations continue on the adjacent Bellechasse Claim Block where Champion
previously outlined Inferred Resources and when combined with the Fire Lake
North estimate total 503.3 million tonnes grading 28.0% Total Iron in
Inferred Resourcesi, all in close proximity to ArcelorMittal’s road-rail
infrastructure and Fire Lake Mine (341 million tonnes grading 33.4% Iron)
that supplies ore to the Mont Wright Mine and Concentrator Complex located
approximately 50 km to the north. i Inferred
Mineral Resources are that part of a Mineral Resource for which quantity and
grade or quality can be estimated on the basis of geological evidence and
limited sampling gathered through appropriate techniques from drill holes
and outcrops, and reasonably assumed, but not verified, geological and grade
continuity. There has been insufficient exploration to define any of the
resources as Indicated or Measured Mineral Resources and there is no
guarantee that further exploration will upgrade the Inferred Mineral
Resources to Indicated or Measured Mineral Resources.
ii The Mineral Resources are strictly historical in nature
and are non-compliant to NI 43-101 Mineral Resources and Mineral Reserves
standards, and should therefore not be relied upon. A Qualified Person has
not done sufficient work to upgrade or classify these historical Mineral
Resources as current NI 43-101 compliant. |
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