Champion Minerals Inc.
TSX VENTURE : CHM
FRANKFURT : P02

Champion Minerals Inc.

May 13, 2009 15:57 ET

Champion Minerals Acquires Penguin Lake and the Right to Acquire the Lamellee Iron Concessions in Fermont, Quebec

TORONTO, ONTARIO--(Marketwire - May 13, 2009) - CHAMPION MINERALS INC. ("Champion" or the "Company") (TSX VENTURE:CHM)(FRANKFURT:P02)(WKN:A0LF1C) is pleased to announce the optioning of the Penguin Lake Iron Property (the "Property") from Fancamp Exploration Ltd., and The Sheridan Platinum Group Ltd. (collectively, the "Vendors"). The 39 claim / 20.67 km2 Property is located immediately north of Arcelor Mittal's Mount Reed Deposit (refer to the Arcelor Mittal website at www.arcelormittal.com) in the Fermont Iron Ore District.

The Property will be integrated into the original Binding Option Agreement of the Fermont Iron Property (the "Agreement") dated May 21, 2008 (refer to the Company news release dated May 27, 2008), in addition to issuing 400,000 shares of the Company to the Vendors (200,000 to Fancamp Exploration Ltd., and 200,000 shares to The Sheridan Platinum Group Ltd.). The Property hosts a historical mineral resource of 100 million tonnes grading 30% Iron(i) (MRNFQ GM File #13035, 1963). Refer to the table below for a list of the claim blocks by cluster and historical mineral resources(i) that the Company has under option agreement in the Fermont camp.

In addition, the Vendors, in view of the close association with Champion in the important and developing Fermont Iron Ore District, have granted Champion a first right of refusal on their last wholly-owned iron property in the district in the event of a third party participation. The 29 claim / 15.37 km2 Lamellee Lake Iron Property located immediately northeast of the Consolidated Thompson Iron Mines Ltd. ("Consolidated Thompson") Lac Peppler Iron Deposit (250 million tonnes @ 28.2% iron) is characterized by a magnetic signature similar to, but larger than, that of the Bloom Lake Deposit with Proven and Probable Reserves of 580 million tonnes at a grade of 30.0% iron currently under development by Consolidated Thompson (refer to the Consolidated Thompson's website at www.consolidatedthompson.com) located 50km to the north. Previous work on Lamellee has been confined to geophysics and geological mapping, and no historical resource has been established.

Mr. Thomas Larsen, President and CEO of Champion stated, "Champion has effectively tied up the remaining iron properties in the Fermont Iron Ore District where the expected annual iron ore output is expected to total approximately 40 million tonnes. Champion now controls a land package of roughly 300km2 in 17 strategic claim blocks from which 8 host historic mineral resources of approximately 695 million tonnes grading 30% Iron(i). The Company plans to aggressively explore and develop the Fermont Iron Property as well as the 139.7 km2 Attikamagen Iron Property located near Schefferville (Quebec). Both iron properties have excellent potential to host significant iron resources. Champion's near-term aim is to rapidly determine the quality and size of the iron mineralization at both Attikamagen and Fermont, and their highest recoverable grades."



--------------------------------------------------------------
HISTORICAL
MINERAL CONCESSION SIZE MINERAL
(km2) RESOURCES(i)
--------------------------------------------------------------
TONNES GRADE
(in millions) (% Iron)
--------------------------------------------------------------
CLUSTER 1
--------------------------------------------------------------
Moire Lake 13.3 101 30.8
--------------------------------------------------------------
CLUSTER 2
--------------------------------------------------------------
O'Keefe-Purdy-Audrea Lakes 37.6 25 35.5
--------------------------------------------------------------
Harvey-Tuttle Lakes 49.8
--------------------------------------------------------------
Bellechasse-Midway 6.9 91.4 30.0
--------------------------------------------------------------
Midway Southeast 8.0
--------------------------------------------------------------
Oil Can Lake 9.0
--------------------------------------------------------------
Fire Lake North
(includes Don Lake) 21.2 25 32.0
--------------------------------------------------------------
Hope Lake 6.9
--------------------------------------------------------------
Hope Lake Southwest 3.2
--------------------------------------------------------------
Penguin Lake 20.7 100 30.0
--------------------------------------------------------------



--------------------------------------------------------------
HISTORICAL
MINERAL CONCESSION SIZE MINERAL
(km2) RESOURCES(i)
--------------------------------------------------------------
TONNES GRADE
(in millions) (% Iron)
--------------------------------------------------------------
CLUSTER 3
--------------------------------------------------------------
Casse Lake 13.5
--------------------------------------------------------------
Audrey-Ernie Lakes 28.1 23 33.2
--------------------------------------------------------------
Big Three Lakes 4.8 25 34.0
--------------------------------------------------------------
Aubertin-Tougard Lakes 28.1
--------------------------------------------------------------
Silicate-Brutus Lakes 28.6 304 29.4
--------------------------------------------------------------
Lamellee Lake 15.4
--------------------------------------------------------------
TOTALS 297.6 694.4 30.4
--------------------------------------------------------------
(i) The mineral resource estimates quoted here are strictly historical in
nature, 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 classify the historical mineral
resource estimates as current mineral resources.


The Fermont Iron Property Agreement

Under the terms of the Agreement, Champion can earn an initial 65% interest in the Property at the Company's option by expending C$ 6 million in staged exploration and development work expenditures on the Property, making cash payments to the Vendors totalling C$ 1 million, and issuing 2.5 million shares to the Vendors, all over a 4-year period. The Vendors will retain a 3% Net Smelter Returns ("NSR") royalty, one third of which may be purchased by Champion for C$ 3 million. Pursuant to the Agreement, and after earning the initial 65% interest, Champion will have the option to acquire a further 5% interest in any of the retained mineral concessions in the Property by completing a positive bankable feasibility study on the applicable retained mineral concessions. Champion will be required to make a one-time issuance of 500,000 shares to the Vendors on completion of the first feasibility study.

After Champion completes its earn-in, the Vendors and Champion will form a joint venture ("JV") reflective of their proportionate ownership interests in the Property in order to explore and develop the retained mineral concessions. Champion will retain a right-of-first-refusal on any part or all of the Vendors' proportionate interest in each of the mineral concessions comprising the Property. If the Vendors elect not to fund their proportionate interest in the JV, their interest would be diluted and, when the Vendors' interest is reduced below a 10% remaining interest, the Vendors would be left with a 3% NSR royalty subject to a buyback clause at Champion's option to reduce the NSR royalty to 2% by paying C$ 3 million. Champion would also retain a first-right-of-refusal on the royalty. There is a 10 km area of influence around each mineral concession. 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.

About Champion Minerals Inc.

Champion is an exploration Company focused on discovering and developing significant metal resources in eastern Canada, particularly in Newfoundland and Labrador and Quebec. The Company's projects include the Attikamagen Iron Property, located in western Labrador and northeastern Quebec, the Fermont Iron Property in northeastern Quebec and the Powderhorn and Gullbridge Base Metal Projects located in central Newfoundland.

The technical information in this news release was prepared, revised and approved by Mr. Jeff Hussey, P. Geo., VP Exploration for Champion, and Mr. Jean Lafleur, P. Geo., Director and Technical Advisor to the President and CEO of Champion. Both individuals are Qualified Persons under NI 43-101 regulations.

Statements in this 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".

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this 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