Champion Minerals Inc.

Champion Minerals Inc.

May 13, 2008 08:30 ET

Champion Minerals Closes Definitive $12,500,000 Option and Joint Venture Agreement With Labec Century Iron Ore Inc. for Exploration and Development of the Attikamagen Property

Champion Also Completes $1.5 million Private Placement and Sandy Chim Becomes Insider of Champion

TORONTO, ONTARIO--(Marketwire - May 13, 2008) - CHAMPION MINERALS INC. ("Champion" or the "Company") (TSX VENTURE:CHM) and Mr. Sandy Chim, President of Labec Century Iron Ore Inc. ("CIOI") are pleased to announce the signing of the definitive option and joint venture agreement (the "Agreement") between Champion and CIOI 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. The Company is also pleased to announce that it has closed 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 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.

Champion is also pleased to announce completion of 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. Each Unit consists of one common share and one-half of one common share purchase warrant of the Company (the "Warrants"). Each whole Warrant has a term of 12 months and entitles the holder to purchase one common share at a price of $0.75. In connection with the Agreement, the Company paid finder's fees by issuing 200,000 common shares of the Company to arm's length parties. In connection with the Financing, the Company paid finder's fees of 7% in cash ($105,000) and 180,000 finder's warrants (each whole finder's warrant having a term of 12 months and entitling the holder to purchase one common share at a price of $0.50). All securities issued pursuant to the Financing and the Agreement will be subject to a four-month hold period. The Financing is subject to final approval by the TSX Venture Exchange.

Mr. Sandy Chim, President of CIOI announced that he has acquired, through his private holding company, Max Luck Holdings Limited, 1,400,000 common shares and 700,000 Warrants of Champion in the Financing. Mr. Chim acquired the shares and Warrants of Champion for investment purposes and may increase or decrease his holdings in the future. He does not own or control or exercise direction over any other securities of Champion.

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 and to determine what the highest recoverable iron grades are".

Attikamagen Lake Iron Formation and Project

The Property comprises 532 mineral exploration claims totaling 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. Champion has agreed to include in the Property the Pterodactyl claims which it recently signed an agreement to acquire (see April 28, 2008 news release). 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 degrees to the NE.

Although not compliant with current 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.

The information contained in this release was prepared and revised by Mr. Jean Lafleur, P. Geo., Director and Technical Advisor to Champion Minerals Inc. and a Qualified Person under National Instrument 43-101 standards.

About Champion Minerals

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

About Labec Century Iron Ore Inc. (CIOI)

CIOI is a member of the Century Iron Ore Group which is based in the Far East and has extensive network, experience and expertise in the international iron ore industry with the focus on developing iron ore resources targeted to and supplying iron ore products to China, the largest and fastest growing consumer of the raw material today.

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 & CEO
    (416) 866-2200
    (416) 361-1333 (FAX)
    Champion Minerals Inc.
    Jorge Estepa
    (416) 866-2200
    (416) 361-1333 (FAX)