Investors flock to Champion

Switzerland-based MRI Advisory is investing $2 million and Hong Kong-based private equity firm Winner Max Investment another $1 million in Champion Minerals (CHM-T) and its prospective iron properties in Eastern Canada.

Under the terms of the offering, Champion will issue 2.22 million units to MRI and 1.11 million units to Winner Max at 90¢ apiece. Each unit consists of a share and a warrant, and each warrant entitles the holder to buy one share at $1.20 for the first 2 years and $1.50 thereafter until 3 years after the closing date, when the warrants are set to expire.

Champion Minerals has also appointed MRI’s chief executive, Ashwath Mehra, to its board. Mehra, an economist who has worked in the industry for more than 25 years, spent a decade at Glencore International where he ran the nickel and cobalt divisions. He also co-founded Northern Iron (NFE-A).

Mehra said in a statement that MRI believes Champion is an “excellent” investment because of its position in the iron-rich Labrador Trough, explaining that the company has the potential “to become the area’s next producer of iron ore from its inferred and historical iron resources, which are estimated at more than 1 billion tonnes.”

Mehra maintained that the management at MRI believes Champion is undervalued — a situation that he thinks will be reversed once technical milestones are met. Mick McMullen, a geologist and principal at MRI, will join Champion’s newly created advisory board and provide technical assistance and strategic advice.

MRI Advisory is a member of the MRI Group of Companies, an investment and trading group in commodities. MRI Trading, another member of the group, trades concentrates and other non-ferrous raw materials. The group has more than US$3 billion in annual sales and available credit lines in excess of US$800 million.

Both MRI and Winner Max will help Champion as it advances its Fermont iron property in northeastern Quebec and move towards a preliminary economic assessment study on its Fire Lake North claim block there. Champion also owns the Attikamagen iron property in western Labrador and northeastern Quebec, 15 km northeast of Schefferville, the hub of a major iron-ore mining camp from 1953 to 1983, and the Powderhorn and Gullbridge base metal projects in central Newfoundland.

The Fermont property consists of 16 iron-rich mineral concessions in the Fermont iron ore district about 250 km north of the St. Lawrence River port town of Port-Cartier and 60 km southwest of Fermont. The Fermont property’s claim blocks are adjacent to Consolidated Thompson Iron Mines’ (CLM-T) properties and ArcelorMittal’s (MT-N) properties. They are all close to power, roads and rail connecting to ports on Quebec’s northern shore of the St. Lawrence Seaway.

News of the investment sent Champion’s shares up as high as $1.01 before closing at 99¢. The company has a 52-week trading range of 30¢-$1.45 and 60.5 million shares outstanding. Champion moved from the TSX Venture Exchange to the TSX on Sept. 27.