Champion posts PEA for Fire Lake North iron

VANCOUVER — Champion Minerals (CHM-T) has released a positive preliminary economic assessment (PEA) on its Fire Lake North iron project in northeastern Quebec.

The PEA outlines an open-pit mine producing 7 million tonnes of concentrate annually at a grade of 65% iron. Capital costs, including pre-stripping, the concentrator and infrastructure, rail facilities and a 20% contingency, are estimated at US$890 million.

The pretax net present value was set at US$1.64 billion, using a 5% discount, and the pretax internal rate of return was at 24.8%. Payback on capital costs should be within 3 years.

In August, Champion released an updated inferred resource for Fire Lake North. Using a 15% total iron cutoff grade, the deposit hosts 388 million inferred tonnes grading 29% iron.

Fire Lake North is one of three projects on Champion’s 82.5%- owned Fermont Iron property that covers 642 sq. km in the Fermont iron district. Fancamp Exploration (FNC-V) controls the remaining stake in the property.

The PEA only looked at Fire Lake North, and not Champion’s Bellechasse target, 12 km northwest, that hosts an inferred resource of 215.1 million tonnes at 28.7% iron. The company believes synergies could be achieved between the two projects.

Champion’s Fermont iron property is adjacent to ArcelorMittal’s (MT-N) Fire Lake mine, while Consolidated Thompson Iron Mines’ (CLM-T) Bloom Lake mine is 60 km north.

Along with Fermont, Champion controls the Attikamagen iron property in northeastern Quebec and the Powderhorn/Gullbridge base metal projects in central Newfoundland.

The company is currently working through a 15,000-metre drill program at Fire Lake North with three drill rigs on site, looking to upgrade the resource before a feasibility study next year.

Champion recently released early results from the drill program that is deepening existing holes. Hole 21 on the East Limb zone was extended from 227 metres depth to 442 metres, adding 191 metres of iron mineralization to the existing 171 metres grading 36.2% iron, bringing the total length to 362 metres. Assays on the extension are still pending, as are results on the extension of hole 24.

The company recently closed a $3-million financing with companies based in Switzerland and China, issuing 3.3 million units at 90¢ each.

Champion’s share price was up 5¢ or 4.8% to close at $1.10 on the PEA news with 754,000 shares traded. The company has a 52-week trading range of 40¢-$1.45 and 63 million shares outstanding.