Projects

Bloom Lake Iron Ore Mine, Quebec

Champion Iron restarted the Bloom Lake Iron Ore Mine in Fermont, north-east Quebec, Canada, through its subsidiary Québec Iron Ore in February 2018.

Producer of

Iron ore

Location

Quebec, Canada

Reserves

411.7Mt

Commissioning

February 2018

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Champion Iron restarted the Bloom Lake Iron Ore Mine in Fermont, north-east Quebec, Canada, through its subsidiary Québec Iron Ore in February 2018.

The company acquired the Bloom Lake mining facilities from Cliffs Natural Resources in April 2016 for $10.5m. The project was approved by the Quebec government in 2008 and the feasibility study for the mine restart was completed in February 2017. The restart project included the refurbishment of the existing concentrator plant and an updated study of the mineral reserve and mining scenario.

Québec Iron Ore held a 63.2% stake in the project while the remaining 36.8% equity interest was owned by Ressources Québec, as authorised by the Government of Quebec. Champion Iron completed refinancing and gained the 100% acquisition of the Bloom lake property under a previously signed arrangement with Ressources Québec.

The restart programme involved a CapEx of C$326.8m ($246m), including C$157.2m ($118m) worth mine upgrades. The mine is expected to produce an average of 7.4 million tonnes per annum (Mtpa) of iron ore concentrate over its 21-year mine life.

The first shipment of ore was completed in April of 2018 on the MV Magnus Oldendorff bulk carrier vessel from the Pointe-Noire terminal at the Port of Sept-Îles. The peak mining rate of 34.2Mtpa is expected to be reached in 2025.

Bloom Lake mine location and reserves

The mine is located approximately 13km north of Fermont, within the Fermont Iron Ore District (FIOD), a world-renowned iron-mining camp to the south of the Labrador Trough within the geological Grenville Province.

“The project was approved by the Quebec government in 2008, and the feasibility study for the mine restart was completed in February 2017.”

The proven and probable reserves of the mine are estimated to be 411.7Mt of iron ore grading 30.0% Fe.

Mining and processing of ore from Bloom Lake

Conventional open-pit mining method, using drilling and blasting along with electric hydraulic shovels and transportation by trucks, is used at the Bloom Lake mine.

Mining of the iron ore project is planned in four phases with a starter phase and a final pushback in both the main mining zones – the East and West pits. Waste rock will be disposed of in two distinct waste dumps.

The mine plan includes the use of existing crushing and storage facilities of the phase two operation, and the mill and the rail load-out facilities from the phase one operation to produce 7.4Mtpa of concentrate from the ore mined from the main pit. A new 3.5km-long conveyor was installed to decrease the need to move ore and load trucks, thereby improving efficiency.

The phase one upgrade increased the overall iron recovery from the existing concentrator, along with recovery of both the coarser and fine iron minerals without affecting the recovery of other sized fractions.

The phase one iron recovery circuit uses a mid-scavenger spiral stage to treat the rougher middlings and an additional magnetic separation stage to recover fine iron from the gravity circuit tailings.

In the second phase, ore passes through the rougher spirals followed by a cleaning stage by using up-current classifiers (UCCs) and resulting in the production of final concentrate. A spiral separator recovers fine iron from the UCC overflow stream.

Transportation of iron ore from the Bloom Lake mine

Champion Iron acquired 735 iron ore railcars from Canadian Iron Ore Railcar Leasing for C$30.1m ($22.67m) for transporting the iron ore from Bloom Lake to the port. The transaction was made through the company’s wholly owned subsidiary, Société de voitures de chemin de fer du Lac Bloom.

Iron ore concentrate from the mine is transported to the port through existing rail access, which includes three segments. The first segment comprises a 31.9km rail spur from the mine to the Quebec North Shore & Labrador (QNS&L) railway in Labrador while the second segment runs from QNS&L railway to the Arnaud junction in Sept-Îles.

The third segment includes the route between Arnaud junction and the Pointe-Noire port in Sept-Iles, where the concentrate is unloaded and stockpiled before loading onto the vessels for export.

The Bloom Lake mine has the permits to store up to 670,000t of concentrate at Pointe Noire port stockpile yard. The Pointe Noire port is owned by SFP Pointe-Noire (SFPPN) and controlled by the Government of Quebec.

Offtake agreement

Japan-based Sojitz Corporation will purchase up to three million dry metric tonnes (dmt) of iron ore a year from the Bloom Lake mine under an offtake agreement with Champion Iron that was signed in May 2017.

The agreement is for an initial five-year period from the start of commercial operations at the Bloom Lake iron mine, with a five-year extension option.

Financing of the Bloom Lake iron ore mine

Champion Iron arranged a C$40m ($30.12m) bridge financing, including C$26m ($19.6m) in debt and C$14m ($10.5m) in equity, to restart operations at Bloom Lake. The debt component included a C$20m ($15.06m) loan from Sojitz and a C$6m ($4.5m) loan from Ressources Québec, an equity shareholder of QIO.

The C$14m ($10.5m) equity investment includes a proportionate contribution from two shareholders, namely Champion Iron and the Government of Québec. Champion Iron issued a C$10m ($7.53m) convertible debenture to Altius Minerals Corporation to provide the equity funding.

Champion Iron also secured debt financing conditional commitments of $180 million from la Caisse de dépôt et placement du Québec and Sprott Resource Lending.

Contractors involved

Ausenco, G Mining Services (GMS), Mineral Technologies, and WSP Canada prepared the feasibility study of the iron ore mine. Ausenco subcontracted Metalytics for conducting an iron ore market study as part of the feasibility study.

Champion Iron engaged Ashurst as an adviser for the C$40m ($30.12m) bridge financing transaction of the Bloom Lake mine.

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