Champion takes total ownership of Bloom Lake iron ore complex

Bloom Lake mining complex Source: Champion Iron

Champion Iron has completed an agreement with the Government of Quebec to acquire the stake it does not already own in Quebec Iron Ore (QIO).

The company, which already held a 63.2 per cent interest in QIO, acquired the remaining 36.8 per cent for $C211 million ($225.6 million) in cash, giving it complete ownership.

New South Wales-based Champion is another example of a growing trend of Australian companies moving into the mineral-rich regions of North America.

QIO operates the Bloom Lake mining complex, which Champion chief executive officer David Cataford sees as a highly prospective project.

“Increasing our ownership of Bloom Lake to 100 per cent is a prudent use of capital, given the proven production and cash flow generation this project has delivered,” he said.

Champion expects the transaction to increase allocated production of high-grade iron ore by approximately 2.75 million tonnes per annum.

The company also concluded an agreement with la Caisse de dépôt et placement du Québec (CDPQ) for a share offering of $C185 million, plus a commitment for a fully underwritten $US200 million ($288.7 million) credit facility with the Bank of Nova Scotia and Societe Generale.

It will use proceeds of the financing agreements to fund strategic initiatives and to refinance QIO’s current outstanding credit facilities, further reducing its carrying costs.

“Modifying the capital structure of Champion will provide substantial cost savings to our company, we are thrilled to see CDPQ continue to support our growth initiatives and count on new financial partners like Scotiabank and Societe Generale,” Cataford said.

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