Champion Iron has reached a definitive framework agreement with Nippon Steel and Sojitz, forming the Kami Iron Mine Partnership to own and potentially develop the Kami iron ore project in Newfoundland and Labrador, Canada.
The partners will initially invest C$245m ($178.4m) for an aggregate 49% stake in the new entity.
The agreement was signed between the companies in December 2024.
The initial investment is aimed at advancing the project towards an interim investment decision and a definitive feasibility study (DFS). The completion of a DFS is expected by the end of 2026.
The agreement outlines a two-step transaction process, with an initial closing expected in the second half of 2025, subject to regulatory clearances and customary conditions.
At this stage, Nippon Steel and Sojitz will contribute C$68.6m to secure their interests in the partnership.
Champion Iron will have a 51% interest post the initial closing, with Nippon Steel and Sojitz holding 30% and 19%, respectively.
The second closing, contingent on the initial closing and other conditions, will see the partners contribute an additional C$176.4m following a positive interim investment decision and the DFS.
This will set the stage for potential construction, estimated at 48 months post-final investment decision.
Champion Iron CEO David Cataford said: "The framework agreement marks a significant milestone for the Kami Project, establishing a clear structure to advance its evaluation alongside trusted partners who share our long-term vision for the growing demand for high-purity iron ore and our commitment to positively impact the communities where we operate.
“Supported by anticipated proceeds and the partners' pro-rata contributions of future expenditures, the partnership will enable us to advance the project without impacting our financial liquidity in the foreseeable future. As we move forward, our focus will shift to identifying opportunities to enhance the project's economics while remaining committed to our disciplined capital allocation strategy."
Champion Iron also highlighted that as the project progresses, it continues to advance the environmental impact statement and engage with local stakeholders, including indigenous groups, to ensure the project's “positive” regional impact.
The company is also in talks with various government departments to seek support, given the recent classification of high-purity iron ore as a critical mineral.
