The Fermont area properties acquired by Champion Minerals Inc. (“Champion”) comprise 15 iron-rich mineral concessions (the “Properties”), totaling 345 km² in the Fermont Iron Ore District of northeastern Quebec. The Properties are centred 60 km southwest of the town of Fermont, which lies near the border of Quebec and Labrador. With this acquisition, Champion has established itself as one of the largest stakeholders of potential iron-ore in the Fermont-Schefferville Iron Ore District of Quebec/Labrador.

Champion’s Fermont holdings host pre-National Instrument 43-101 (“43-101”) mineral resources1 of approximately 610 million tonnes grading 32.2% Fe, located in close proximity to former, current and developing iron mines and projects. The pre-43-101 quoted mineral resource figures are compiled from 7 of Champion’s 15 Fermont area properties. The remaining 8 properties contain known magnetic iron formation occurrences that have not been quantified. Most of the Properties have been subjected to very limited historical exploration work. A high resolution airborne magnetometer survey was flown over all properties. The results clearly outline the significant iron-ore potential (see geophysics maps on the right).

One of the Fermont area holdings of particular interest is the Moire Lake Property. It lies directly east of Quebec Cartier Mines’ Mount Wright operation and southeast of Consolidated Thompson Iron Mines Limited's Bloom Lake deposit (637.7 million tonnes grading 29.8% Fe), which is currently being developed and is expected to produce 7 to 8 million tonnes of iron ore concentrate per year at a grade 66.5% Fe (see Consolidated Thompson Iron Mines Limited SEDAR filings available at www.sedar.com).

In addition, the nearby Peppler Lake Iron and Lamallee properties, belonging to Consolidated Thompson Iron Mines Limited (formerly Quinto Mining Corporation), contain an estimated 250 million tonnes of 43-101 compliant iron-ore resources grading 28.2% Fe, according to a Technical Report published by Quinto Mining Corp. in 2006 (see Quinto Mining Corporation SEDAR filings available at www.sedar.com).

Historic Mineral Resources¹ - Fermont Properties:

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PROJECT NAME                     TONNES     GRADE      NUMBER OF
                                           (% iron)   DRILL HOLES
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 MOIRE LAKE                  101,000,000      30.8             65
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 O'KEEFE-PURDY-AUDREA LAKES   25,000,000      35.5             18
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 BELLECHASSE-MIDWAY           91,400,000      30.0            N/A
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 FIRE LAKE NORTH               40,600,00      32.0             15
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 AUDREY-ERNIE LAKES           23,000,000      33.2              2
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 BIG THREE LAKES              25,000,000      34.0            N/A
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 SILICATE-BRUTUS LAKES       304,000,000      29.4             18
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 TOTAL                       610,000,000      32.2            118
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(1) The mineral resources outlined here are historical and were
determined with minimal drilling. They are not 43-101 compliant
Mineral Resources, and as such they should not be relied upon.
There is no direct evidence that similar resource volumes or any
portion thereof will be achieved with further exploration work.

All of the iron mineralization on the Properties is associated with magnetite and/or specularite (hematite) iron formation, which tends to have positive topographic relief in the area. The iron mineralization and ores are easily recognized visually, and can be readily identified by airborne- and ground-magnetic geophysical surveys. Magnetic “highs” outline magnetite-rich iron formations, whereas relative magnetic lows reflect specular hematite-rich iron formation that is the typical iron-ore in the Fermont Iron-ore District.

Terms of the Fermont Properties Agreement

In May 2008 Champion announced the signing of a Binding Provisional Agreement (the "Agreement") with Fancamp Exploration Ltd. and The Sheridan Platinum Group Ltd. (collectively, the "Vendors"), allowing Champion to acquire up to a 70% interest in 15 iron-rich mineral concessions totalling 261.5 km2 in the Fermont Iron Ore District of northeastern Quebec.

Under the terms of the Agreement, Champion can earn an initial 65% interest in the Properties at the Company's option by expending C$ 6 million in staged exploration and development work expenditures on the Properties, making cash payments to the Vendors totalling C$1 million, and issuing 2.5 million shares to the Vendors - all over a 4-year period. The Vendors will retain a 3% Net Smelter Return ("NSR") royalty, one third of which may be purchased by Champion for C$3 million.

Pursuant to the Agreement, and after earning the initial 65% interest, Champion will have the option to acquire a further 5% interest in any of the retained mineral concessions in the Properties by completing a positive bankable feasibility study on the applicable retained mineral concessions. Champion will be required to make a one-time issuance of 500,000 shares to the Vendors on completion of the first feasibility study.

After Champion completes its earn-in, the Vendors and Champion will form a joint venture ("JV") reflective of their proportionate ownership interests in the Properties in order to explore and develop the retained mineral concessions. Champion will retain a right-of-first-refusal on any part or all of the Vendors' proportionate interest in each of the mineral concessions comprising the Properties. If the Vendors elect not to fund their proportionate interest in the JV, their interest would be diluted and, when the Vendors' interest is reduced below a 10% remaining interest, the Vendors would be left with a 3% NSR royalty subject to a buyback clause at Champion's option to reduce the NSR royalty to 2% by paying C$3 million. Champion would also retain a first-right-of-refusal on the royalty. There is a 10 km area of influence around each mineral concession.
 

© 2008, Champion Minerals Inc.