Champion Minerals Inc.
TSX VENTURE : CHM
FRANKFURT : P02

Champion Minerals Inc.

August 18, 2010 08:00 ET

Champion Minerals Issues Updated Inferred Resource Estimate of 388 Million Tonnes Grading 29% Total Iron for Fire Lake North, Which Includes 185 Million Tonnes at 36% Total Iron

Estimates an Exploration Target of Up to 350 Million Tonnes of Additional Potential Mineralized Material

- Total Inferred Mineral Resource estimates for the Fire Lake North and contiguous Bellechasse Claim Blocks now total 603 million tonnes grading 29% Total Iron in Inferred Mineral Resources

- Champion launches 15,000 m drill program at Fire Lake North designed to upgrade Mineral Resources to Measured and Indicated Resources(i) category, and to delineate the remaining potential, including the newly discovered Northeast Zone

TORONTO, ONTARIO--(Marketwire - Aug. 18, 2010) - CHAMPION MINERALS INC. (TSX VENTURE:CHM)(FRANKFURT:P02) ("Champion" or the "Company") is pleased to announce an updated National Instrument ("NI") 43-101 Mineral Resources Estimate (the "Mineral Resources") for the Fire Lake North Claim Block ("Fire Lake North") from the Fermont Iron Property (the "Property") in the Fermont Iron Ore District of northern Quebec.

The current Mineral Resources combine the 2009 and 2010 winter drill campaign results totaling 31 holes which yielded intersections of up to 171 m grading 36.2% Total Iron (drill hole FL10-21), 134 m of 38.3% Total Iron (FL10-6), and 198 m of 38.3% Total Iron (drill hole FL10-24) (refer to the Champion news releases dated May 4, 2010 and May 18, 2010) covering the East Limb, West Limb and Don Lake target areas. The current Mineral Resources were estimated by Eugene Puritch, P. Eng., of P&E Mining Consultants Inc. ("P&E") (Brampton, Ontario), an independent Qualified Person under NI 43-101 guidelines. The geological, mineral resource and pit optimization modeling parameters were established by P&E with assistance from Patrice Live, P. Eng. and André Allarie, P. Eng., both of BBA Inc. (Montreal, Quebec), to complete a Preliminary Economic Assessment (Scoping Study) for Fire Lake North.

At a 15% Total Iron cut-off grade, there are 388 million tonnes grading 29% Total Iron in Inferred Mineral Resources* from Fire Lake North (all Mineral Resources numbers in the text are rounded per NI 43-101 guidelines). The Inferred Mineral Resource Estimates at varying cutoff grades are appended (Table 1) with the geological and Mineral Resources modeling parameters and the Quality Assurance and Quality Control ("QA/QC") program. The current Mineral Resource estimate represents a 35% increase in tonnage from previous Mineral Resource estimates at Fire Lake North that yielded Inferred Mineral Resources* of 288.2 million tonnes grading 27.5% Total Iron (refer to the Champion news release dated November 19, 2009).

It is estimated an exploration target of between 320 million and 350 million tonnes of additional Potential Mineralized Material* is present for which no sampling data is available to estimate grade. The Potential Mineralized Material* includes the un-estimated iron formation between widely spaced drill holes and the recently discovered iron formation of the Northeast Zone. In addition, the conceptual optimized pit-shell of undiluted and in-situ Mineral Resources at Fire Lake North utilized a mining cost of US$ 1.76 per tonne of ore and waste, process cost of US$1.67 per tonne, process recovery of 82%, transport costs of US$4.75 per tonne and G&A costs of US$0.75 per tonne, pit slopes of 48 degrees to accommodate ramp and mine design, and a moving average price of Iron concentrate of US$ 1.1420 per dry metric tonne unit or US$ 114.20 per tonne, are 304 million tonnes grading 30% Total Iron. The conceptual pit-shell indicates approximately 80% of Inferred Mineral Resources* report within a conceptual open-pit (refer to Table 2) at the same 15% Total Iron cut-off grade. 

The Fire Lake North iron formations continue on the contiguous Bellechasse Claim Block ("Bellechasse") where Champion had previously outlined Inferred Mineral Resources* of 215 million tonnes grading 29% Total Iron. The combined Fire Lake North and Bellechasse estimates total 603 million tonnes grading 29% Total Iron in Inferred Mineral Resources*, all in close proximity to ArcelorMittal's road-rail infrastructure and Fire Lake Mine (341 million tonnes grading 33.4% Iron) that supplies ore to the Mont Wright Mine and Concentrator Complex located approximately 50 kilometers to the north.

Thomas Larsen, Champion's President and CEO, stated, "I am very pleased with the expediency of Champion's technical group in outlining over 600 million tonnes at 29% Total Iron in NI 43-101 compliant Mineral Resources over the past 18 months. From an exponential cost-reward valuation perspective, the iron mineralization discovered far exceeds the cost of exploration incurred. The current Mineral Resource estimated tonnage represents a 35% increase from previous Mineral Resource estimates. Furthermore, a significant estimated tonnage of additional mineralized material remains to be drilled."

Mr. Larsen added "We believe our current Mineral Resources are near the threshold required for a potential economically viable operation and have focused our efforts accordingly. BBA Inc is now in a position to complete the scoping study for the latter part of October while Champion aggressively initiates a 15,000 m staged drill program to upgrade the current Inferred Mineral Resources to the Measured and Indicated categories, and delineates the remaining potential, including the newly discovered Northeast Zone."

* Inferred Resources are part of a National Instrument 43-101 Mineral Resource for which the estimated quantity and grade of a deposit, or a part thereof, that is determined on the basis of limited sampling, but for which there is sufficient geological information and a reasonable understanding of the continuity and distribution of metal values to outline a deposit of potential economic merit. There is no guarantee that further exploration will upgrade the Inferred Resources to Indicated and/or Measured Resources. Mineralized Material is not recognized Mineral Resources categories and there is no guarantee that any future exploration will ever convert any of this material to compliant NI 43-101 Mineral Resources.

The Fermont Iron Property

Champion has an 82.5% direct interest, with Fancamp Exploration Ltd. (TSX VENTURE:FNC) holding 17.5%, in the 608 km2 Fermont Property consisting of 16 strategic claim blocks grouped into three clusters, termed Clusters 1, 2 and 3. Champion previously announced 8 claim blocks with historical Mineral Resources of 694 million tonnes grading 30.4% Iron, but now after 2 of the 8 claim blocks (Bellechasse and Fire Lake North) host current Mineral Resources there are 6 remaining claim blocks that host historical Mineral Resources of 578 million tonnes grading 30.4% Iron (Paquet, 1963; MRNFQ Assessment File GM 13035). The Mineral Resources are strictly historical in nature and are non-compliant to NI 43-101 Mineral Resources and Mineral Reserves standards, and should therefore not be relied upon. A Qualified Person has not done sufficient work to upgrade or classify these historical Mineral Resources as current NI 43-101 compliant.

Fully funded, having raised over $C 20 million since November 2009, Champion is aggressively exploring the Fermont Iron Property, including the ongoing 7,000 m drill campaign on Harvey-Tuttle, with the objective of outlining several 200 to 500 million tonnes lenses. The Fermont Iron Property hosts more than 200 kilometres of iron formation with potential to host Mineral Resources.

About Champion Minerals Inc.

Champion is an exploration Company focused on discovering and developing significant metal resources in eastern Canada, particularly in the provinces of Quebec and Newfoundland & Labrador. The Company's projects include the Attikamagen Iron Property in northeastern Quebec and western Labrador, the Fermont Iron Property in northeastern Quebec, and the Powderhorn/Gullbridge Base Metal Projects in central Newfoundland. Please visit Champion's website at www.championminerals.com.

The technical information in this news release was prepared, revised and approved by Alexander Horvath, P. Eng., Executive VP Exploration of the Company, Jean Lafleur, P. Geo., Director and Technical Advisor to the President and CEO of Champion, and Eugene Puritch, P. Eng., of P&E Mining Consultants. All individuals are Qualified Persons under NI 43-101 standards with Mr. Puritch being independent of the issuer.

Statements made in this news release that are not historical facts are "forward-looking statements" and readers are cautioned that any such statements are not guarantees of future performance, and that actual developments or results, may vary materially from those in these "forward-looking" statements.

Table 1: Inferred Mineral Resources* at 5% incremental Total Iron cutoff grades from 10% to 30%.
 
Cut-off grades Tonnes(1) Total Iron grade Ca2O MgO
10% 425,232,000 27.5 0.41 0.37
15% 387,733,000 28.9 0.39 0.35
20% 327,349,000 31.0 0.38 0.32
25% 252,089,000 33.6 0.35 0.28
30% 184,702,000 35.9 0.24 0.23
(1) Numbers are rounded according to NI 43-101 guidelines.
 
Table 2: Pit Optimized Mineral Resources at 5% incremental Iron cutoff grades from 15% to 30%.
 
Cut-off grades Tonnes(1) Total Iron grade Ca2O MgO
10% 324,800,000 29.3 0.34 0.32
15% 303,732,000 30.4 0.33 0.30
20% 274,787,000 31.8 0.33 0.29
25% 222,095,000 33.9 0.31 0.27
30% 166,645,000 36.1 0.24 0.23
(1) Numbers are rounded according to NI 43-101 guidelines.
 
Geological and Mineral Resource Modeling Parameters
  • The current Mineral Resource estimates were completed using Inverse Distance Squared ("ID2") interpolation of four-meter assay composites within modelled mineralization domains defined by geology and assay values.
  • The assay values were capped at 58% Total Iron prior to compositing and the area of influence for high grade composites above 45% Total Iron were restricted to 50% of the 300 meter search and interpolation range used to estimate resources.
  • The current Mineral Resources were evaluated only from recent NI 43-101 compliant drill hole assay results. The mineralized areas were interpreted from transverse sections defined by drill hole traces combined with geophysical data.
  • The 15% Iron cut-off grade was derived from a 4 year moving average price of Iron concentrate price at US$ 1.142 per dry metric tonne unit (or US$ 114.20 per tonne), based on the ArcelorMittal Mines Canada October 2009 European deliveries of concentrate (Freight on Board or FOB Port-Cartier, Quebec) price set at US$1.0242 per Iron unit or US$ 102.42 per tonne (www.arcelormittal.com); processing of US$ 1.67 per tonne of ore; concentrate transport of US$ 4.75 per tonne of ore; G&A of US$ 0.75 per tonne of ore; and a process recovery of 85%.
  • A bulk density of 3.30 tonnes per cubic metre was used to calculate tonnages from the volumetric estimates of the resource grade block model. Initial density test results on a limited number of samples indicate the density could be higher; however, additional testing would be required to validate any increase in the current assigned density.
  • Any discrepancies in the estimate numbers are due to rounding effects; rounding followed the recommendations in NI 43-101.
  • The Mineral Resources for Fire Lake North were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council December 11, 2005.

Quality Assurance and Quality Control

All drill core logging and sample preparation was conducted by qualified Company personnel under NI 43-101 guidelines at the Company's core logging facilities in Labrador City, Newfoundland. The NQ-sized drill core was split and one-half retained in the core tray as a reference sample while the other half core samples were individually bagged, tagged, and sealed within large sealed nylon bags and shipped by commercial ground transport for sample preparation and analysis to ALS Laboratory Group facilities in Val d'Or (Quebec) and North Vancouver (British Columbia). Certified reference standards and blank samples were inserted regularly for Quality Assurance and Quality Control ("QA/QC") purposes, and QA/QC work and results was supervised and processed by Alex S. Horvath of A. S. Horvath Engineering Inc. (Ottawa, Ontario), and reviewed and approved by Tracy Armstrong, P. Geo., of P&E Mining Consultants Inc.

Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Contact Information

  • Champion Minerals Inc.
    Thomas G. Larsen
    President and CEO
    (416) 866-2200
    or
    Champion Minerals Inc.
    Jorge Estepa
    Vice-President
    (416) 866-2200
    www.championminerals.com