Oct 7 2010
Champion Minerals Inc. ("Champion" or the "Company") (TSX:CHM)(FRANKFURT:P02) is pleased to announce that two companies, one Swiss and one from China, will invest a total of $3.0 million in the Company in a private placement financing (the "Offering").
No broker, dealer or finder is involved in the private placement and, accordingly, no commissions or finder's fees are payable in connection with these transactions.
Zug, Switzerland-based MRI Advisory AG ("MRI"), or associated entities, will invest $2.0 million, and Winner Max Investment Co., Ltd. of Hong Kong ("Winner Max") will invest $1.0 million.
The Offering is subject to completion of certain closing items and final regulatory approval. Under the terms of the Offering, Champion will issue 2,222,222 units ("Units") to MRI and 1,111,111 Units to Winner Max, at $0.90 each. Each Unit consists of one common share and one warrant (a "Warrant"). Each Warrant entitles the holder to purchase one common share at a price of $1.20 for the first 24 months and $1.50 thereafter until 36 months after the closing date, when the Warrants expire. The securities issued under or in connection with the Offering will be subject to a four month hold period. Champion is also entering into an advisory services agreement with MRI, to provide strategic planning and technical advice to the Company.
"We identified Champion as an excellent strategic investment as we believe it is well positioned within the iron-rich Labrador Trough," said Ashwath Mehra, CEO of MRI. "Champion 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"1.
Mr. Mehra added, "The claim blocks are very well-situated in a developed and politically stable country near infrastructure that will be beneficial in a production scenario. We believe that the assets of Champion are currently undervalued and that there is potential for a significant increase in the value of the Company as technical milestones are met."
Thomas Larsen, Champion's President and CEO, remarked, "We are pleased to welcome both the MRI Group and Winner Max as major investors in our company. I anticipate further benefits by adding the MRI group to our team as we advance development of our Fermont Property and move towards a Preliminary-Economic-Assessment (PEA) study on our Fire Lake North Claim Block. MRI, with its successful track record in financing, mine development, iron ore production, strategic global partnerships and shipping, will help enhance and unlock the full value of Champion's assets."
Mr. Mehra has been appointed to Champion's board of directors, subject to regulatory approval. He is an economist who has worked in the minerals industry for over 25 years, starting his career with Philipp Brothers after which he spent 10 years with Glencore International AG, where he was a senior partner and ran the Nickel and Cobalt Divisions. He is a co-founder and Non-Executive Director of Northern Iron Limited (ASX:NFE).
Source: http://www.championminerals.com/