Champion Iron subsidiary Quebec Iron Ore (QIO) has concluded an agreement with the Government of Quebec, through its agent Ressources Quebec (RQ), to purchase the remaining 36.8% stake in the Bloom Lake mining complex for a cash consideration of C$211m ($156m).
QIO is the operator of the Bloom Lake Mining Complex.
Champion has simultaneously announced that its subsidiary QIO has concluded an agreement with la Caisse de dépôt et placement du Québec (CDPQ) for a preferred share offering of C$185 ($136m).
It has also secured a commitment for a fully underwritten $200m credit facility with the Bank of Nova Scotia and Societe Generale.
The funds will be used to refinance QIO’s outstanding credit facilities and also to fund strategic initiatives of the QIO.
Champion CEO David Cataford said: “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.
“Finally, we are pleased to continue our partnership with the government of Québec through its mandatary, Ressources Québec, as a key shareholder of our publicly listed entity, Champion Iron.”
The complete ownership of Bloom Lake will allow Champion to increase production capacity of high-grade iron ore to 2.75 million tonnes per annum.
Expected to close in the second quarter of 2019, the transaction is subject to customary closing conditions.
Based in the US, Champion Iron is a producer and developer of iron resources in the south end of the Labrador Trough in the province of Québec. It holds major projects in the southern Labrador Trough, Canada’s largest iron-ore producing region.