Champion Iron (ASX: CIA) (TSX: CIA) (“Champion” or the “Company”), is pleased to announce that its subsidiary, Quebec Iron Ore (“QIO”), has signed a Framework Off-Take Agreement (the “Agreement”) with Sojitz (“Sojitz”), a major trading company based in Tokyo, Japan, pursuant to which Sojitz would purchase up to 3,000,000 DMT per annum from QIO after the re-commencement of commercial operations at the Bloom Lake Iron Mine (“Bloom Lake”) located near Fermont, Quebec.
Champion is also pleased to announce that it has arranged a $40 million debt and equity bridge financing for Quebec Iron Ore in order to restart operations at Bloom Lake.
QIO $40 Million Bridge Financing
In connection with the Bloom Lake restart and in order to beneficially utilize the summer construction season for required upgrades to the Bloom Lake tailings management system and other process plant upgrades and long-lead items, CIA has arranged, on behalf of QIO, a $40 million bridge financing, comprised of $26 million in debt and $14 million in equity.
The debt component consists of a $20 million loan from Sojitz, together with a $6 million loan from Ressources Québec (“Ressources Québec”), a 36.8% equity shareholder in QIO, both of which are pari-passu one-year term loans secured against the Bloom Lake fixed assets and large scale mining equipment.
Pursuant to the Agreement, Sojitz will purchase up to 3,000,000 DMT per annum from QIO, upon re-commencement of commercial operations at Bloom Lake. The Agreement is for an initial five-year term from the date that commercial operations commence at Bloom Lake and shall automatically extend for successive terms of five-years.