TORONTO, ONTARIO--(Marketwired - Jul 2, 2013) - CHAMPION IRON MINES LIMITED (CHM.TO)(CPMNF)(P02.F) ("Champion", or the "Company") announces that on June 28, 2013 it provided notice to the Sept-Îles Port Authority terminating the July 2012 agreement related to the multi-user port facilities proposed at Pointe Noire, Sept-Îles, Quebec. The agreement required Champion to make payments totalling of $25.6 million by July 1, 2013.
After conducting detailed feasibility study work on a Quebec private railway project and extensive discussions with the Canadian National Railway Company ("CN") during the 2011-12 period, Champion agreed to support the CN North Shore Railway proposal and signed CN's Collaboration Framework Agreement ("CN CFA") in August 2012. The CN North Shore Railway became Champion's leading rail transportation strategy.
In February 2013, CN announced that work on the CN North Shore Railway feasibility study was being suspended and CN provided written notice to Champion that the CN CFA was terminated. Upon receiving CN's notice, Champion reactivated its alternative Quebec railway strategy and commenced discussions with various potential private and public partners to develop a multi-user railway collaborative framework for the construction, financing and operation of the railway. The Company has been working diligently over the past few months and felt it could reach an alternative rail transportation solution prior to the July 1, 2013 payment date stipulated in the Port Authority agreement. Unfortunately, the multi-user railway collaborative framework process had not reached a critical point in terms of both public and private support and Champion determined that it was in the Company's best interest to terminate its agreement with the Port Authority at the present time.
Tom Larsen, Champion's President and CEO, commented, "The past year has been a very challenging period for iron ore developers and we were disappointed with a number of recent developments including the decision by the CN to suspend its feasibility study on a new multi-user rail line to provide rail services from the Labrador Trough to the Port of Sept-Îles." Nonetheless, under the circumstances we believe it is prudent and in the best interest of our shareholders at this time to take a step back and reassess Champion's strategic options and protect the Company's financial position. He added, "We remain committed to developing Champion's flagship Consolidated Fire Lake North Project and securing transportation and port handling services that will permit the Company to place among the lowest cost iron producers in the Labrador Trough."
About Champion Iron Mines Limited
Champion is an iron exploration and development company with offices in Montreal and Toronto, and is focused on developing its significant iron resources in the provinces of Québec and Newfoundland & Labrador. Champion holds a 100% interest in the Fermont Iron Holdings and a 44% interest in the Attikamagen Iron Project located in both Québec and Labrador. The Attikamagen Project is under option to Labec Century Iron Ore Inc. ("Labec"), a subsidiary of Century Iron Mines Corporation, under which Labec can earn up to a 60% interest. Labec has requested a transfer of a further 4% to increase Labec's holding to 60% under its option agreement with Champion and to further increase Labec's interest and dilute Champion's interest pursuant to ongoing exploration programs. Champion is undertaking its due diligence investigations with respect to the requests.
Champion's Fermont Iron Holdings, including its flagship Consolidated Fire Lake North Project, are located in Canada's major iron ore producing district, in close proximity to five producing iron mines, existing transportation and power infrastructure. Consolidated Fire Lake North is located immediately north of Arcelor Mittal's operating Fire Lake Mine and 60 km south of Cliffs Natural Resources Inc.'s Bloom Lake Mine in northeastern Québec. Champion's management and advisory board includes mining and exploration professionals with the mine development and operations experience to build, commission, and operate the future Consolidated Fire Lake North mine.
For additional information on Champion, please visit our website at www.championironmines.com.
This news release includes certain information that may constitute "forward-looking information" under applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements about planned operations at the Company's projects, including its Consolidated Fire Lake North Project. Forward-looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information, including the risks identified in Champion's annual information forms, management discussion and analysis and other securities regulatory filings by Champion on SEDAR (including under the heading "Risk Factors" therein). There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking information. Accordingly, readers should not place undue reliance on forward-looking information. All forward-looking information contained in this press release is given as of the date hereof and is based upon the opinions and estimates of Champion's management and information available to management as at the date hereof. Champion disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
This press release has been prepared by Champion Iron Mines Limited and no regulatory authority has approved or disapproved the information contained herein.