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Champion Minerals Signs a Provisional Agreement with Labec
Century Iron Ore Corporation to Finance Exploration and Development of
the Attikamagen Property
Toronto
(Canada), March 26, 2008 - CHAMPION MINERALS INC. ("Champion"
or the "Company") (TSX-V: CHM) is pleased to announce
the signing of a provisional agreement (the "Agreement") with
Labec Century Iron Ore Inc. ("CIOI") defining the terms to
allow CIOI to earn up to a 60% interest in the Company's Attikamagen
Property (the "Property") by expending up to C$ 12.5 million in
exploration and development work expenditures on the Property. Pursuant
to the Agreement, the Company is also pleased to announce that it has
arranged a C$1.5 million financing (the "Financing")..
Under
the terms of the Agreement, CIOI can earn an initial 51% interest in the
Property by funding C$ 7.5
million over a 3 year period in yearly increments of C$ 2.5 million per
year in staged expenditures, for the exploration and development
of the Property.. Pursuant to the Agreement, and after earning the
initial 51% interest, CIOI will have the option to increase its interest
in the Property to 56% by expending a further C$ 2.5 million in Year 4,
and to 60% by expending an additional C$ 2.5 million in Year 5. After
CIOI completes its applicable earn-in, CIOI and Champion will form a
joint venture reflective of their proportionate ownership interests in
the Property. Champion will remain manager and operator of the Property
until CIOI vests a 51% interest.
The
Agreement is subject to the completion of due diligence, the approval of
Champion's Board of Directors, and all required regulatory approvals,
including that of the TSX Venture Exchange Inc. (the "TSXV").
Champion
is also pleased to announce that a non-brokered private placement of 3
million units (the "Units") at a price of $0.50 per Unit, for
gross proceeds to the Company of C$ 1.5 million has been arranged. Each
Unit will consist of one common share and one-half of one common share
purchase warrant of the Company (the "Warrants"). Each whole Warrant
will have a term of 12 months and entitle the holder to purchase one
common share at a price of $0.75. As a preliminary step to acquiring the
option in the Property, CIOI and its associates and affiliates will
complete $700,000 of the Financing. The Financing is subject to approval
by the TSXV and all securities issued pursuant to the Financing will be
subject to a four-month hold period.
Mr.
Thomas Larsen, President and CEO of Champion states "We are pleased
to have the involvement of CIOI in the exploration and development of the
Attikamagen Property and welcome the participation of new shareholders to
the Company. We hope to be able to establish, even at this early stage,
end-user contracts for the iron at Attikamagen. CIOI brings extensive
experience in supplying raw materials, particularly iron ore, to China,
an end-user of continually growing importance. Champion's management is of the opinion that
Attikamagen has excellent
potential to host a significant iron resource. With the recent signing of
a technical agreement with BBA Inc., to utilize their geological,
engineering and economic expertise in the Labrador-type iron ore systems,
we hope to rapidly determine the quality and size of the iron deposit
andto determine what are the highest recoverable iron grades".
Attikamagen Lake Iron Formation and
Project
The Property
comprises 532 mineral exploration claims totaling approximately 139.7 km2
in western Labrador and northeastern Quebec, primarily located 15 km E-NE
of Schefferville, Quebec. The Property consists of the Attikamagen Lake
Iron Property, the Attikamagen Extension Claim Block, both located in Labrador, and the Lac
Sans Chef Quebec Claim Block, located in the province of Quebec and
partially adjacent to the northern portion of the Attikamagen Extension
Claim Block. Recent work completed at the Attikamagen Lake Iron Property
by Champion consisted of an airborne geophysical survey, as well as a
preliminary surface mapping and sampling program. The surface sampling
program was completed to ground reference samples for correlation with
the geophysical data.
The airborne
magnetic response correlates well with surface geological mapping, and is
useful in delineating the magnetite iron formation and wall rock contacts
in talus or overburden covered areas where there is an absence of bedrock
exposure. The total field and first vertical derivative magnetic data
indicates a series of NW-SE trending strongly magnetic horizons linked
with the iron formations and they have a surface expression ranging in
true thickness from 150 to 500 meters where folding causes favorable
structural thickening. The mineralization may extend over 8 km beneath
shallow overburden based on the magnetic response, with dips ranging from
near vertical to 80� to the NE.
Although not
compliant with current National Instrument 43-101 resource estimation
standards, these types of iron formations can be estimated volumetrically
by utilizing a combination of sampling and magnetic survey responses to
estimate global mineral resource potential with remarkable accuracy on a
tonnes per vertical meter basis. Exploration drilling is required
primarily to determine the extent and iron grades of the iron formations
and provide samples for metallurgical testing. The average total iron content from
21 grab samples taken by Champion in 2007 was 37.7% within a range of 22.60% to 49.30%. Some 11 samples contain
more than 40% total iron within the upper range of 40.30% to 49.30%. Champion
plans to complete metallurgical beneficiation testing on samples to
determine whether a marketable concentrate can be produced from the
Property.
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