PERTH (miningweekly.com) – ASX- and TSX-listed Champion Iron has secured $180-million in debt financing to support the restart of operations at its Bloom Lake iron-ore mine, in Quebec.
The financing, secured from Caisse de depot et placement du Quebec and Sprott Resource Lending, will be undertaken in two tranches, the first of which was an $80-million five-year senior secured loan provided by Sprott.
The loan will have a carrying interest of 7.5% plus the greater of US$ three-month LIBIR and 1% a year.
Champion will provide Sprott with three-million common share purchase warrants, at an exercise price to be determined by the company at a later date.
The second tranche of the financing consisted of a $100-million, seven-year subordinated loan provided by Caisse at an interest rate of 12% for the first year, and thereafter at an interest rate linked to the price of iron-ore.
Caisse will also be issued with 21-million common share purchase warrants.
Champion chairperson and CEO Michael O’Keeffe said on Thursday that the company was looking forward to working with both financiers to bring the Bloom Lake project back into production.
A feasibility study at Bloom Lake has previously revealed that the operation could produce some 7.4-million tonnes a year, generating revenues of more than $15-billion over a 20-year mine life.