champion august 31, 2012 with cn
DESCRIPTION
With CN Press ReleaseTRANSCRIPT
Building the Next Major Iron Ore
Mine in the Labrador Trough Corporate Presentation
August 31st , 2012
www.championironmines.com FSE: P02; OTCQX: CPMNF
FORWARD-LOOKING STATEMENTS
Certain information contained herein regarding Champion Iron Mines Ltd., including
management’s assessment of future plans and operations, may constitute forward-looking
statements under applicable securities law and necessarily involve risks, including but not
limited to risks associated with mining exploration, operating costs, production costs, volatility
of share prices, currency fluctuations, imprecision of resource and reserve estimates,
environmental risks and ability to access sufficient capital from internal and external sources.
As a consequence, actual results may differ materially from those anticipated in any forward
looking statements. Plans, intentions or expectations disclosed in any forward-looking
statements or information should not be read as guarantees of future results or events, and will
not necessarily be accurate indications of whether or when or by which such results or events
will be achieved.
Except as required by law, Champion Iron Mines Ltd., expressly disclaims any intention and
undertakes no obligation to update any forward looking statements or information as conditions
change.
The historical mineral resources mentioned are strictly historical in nature and are non-
compliant to National Instrument 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 the historical mineral resources as current National Instrument NI-43-101
compliant.
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About Champion Iron Mines
3
Fermont Projects (710 km2)
17 properties in the Fermont Quebec mining camp
Flagship Fire Lake North project - currently in the
feasibility stage.
Over 4 billion tonnes of NI 43-101 compliant iron mineral
resource estimates on 5 of 17 projects.
100% direct interest, 3% NSR (C$1.5 million buyback for
an additional 0.5% NSR).
Attikamagen Property (310 km2)
Champion Iron Mines holds a 44% interest.
Century Iron Mines Corp. subsidiary (56% interest) has
option to earn up to a 60% interest in the property by
funding a further $3 million in exploration expenditures by
May 2014*.
Advanced iron ore exploration and development projects located in
Canada’s principal iron ore district, the Labrador Trough
* CHM 44% / Century Iron Ore Mines subsidiary 56%; Investment by WISCO of 25% ($60M) and Minmetals of 5% ($12M)
Quebec’s Next
Major Iron Ore Mine
Fire Lake North (FLN) Development Project
Nov. 21 2011 PEA indicates ability to produce 8.7 million tonnes of
concentrate per annum for the first 25 years of a 40-year mine life the
first 5 years will average approximately 10 million tonnes of concentrate per
annum
Net Present Value of $4 billion at a discounted cash flow rate of 8% with
an Internal Rate of Return of 41.5% and a payback period of 2.3 years
Established Iron Ore District
Canada produces 44 mtpy of iron ore concentrate in the southern end of the
Labrador Trough this is expected to grow to 200 mtpy over the next 10 years
if all proposed development projects are realized.
Established rail, power and port infrastructure
- Quebec’s Plan Nord: $80 billion investment over the next 25 years in
northern Quebec for various projects including infrastructure projects
- Competitive power rates: ~ $0.04 - $0.045; price to be negotiated in 2012
- World-class multi-user port project (5mMtpy) underway.
Proven Team
Strengthened advisory board and board of directors includes former
Consolidated Thompson Iron Mines management and officers
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Capital Structure
Share Data and Cash Position as of July 31, 2012.
Shares Outstanding 119.3 million
Warrants 10.0 million @ C$2.59 (avg. strike price)
(7.0 million @ C$3.00 not exerciseable until Nov. 2014
0.8 million @ C$2.84 expiring Feb. 2013
2.22 million @ C$1.50 expiring Oct. 2013, which are owned
by insiders and advisors.)
Options 11.6 million @ C$1.03 (avg. exercise price)
Fully Diluted Shares Outstanding 141.1 million
Market Capitalization
(based on $0.94 share price)
C$112.2 million
Cash Position C$21.9 million
Fully Diluted Cash Position C$59.7 million
Management /Insiders Ownership ~ 17%
Analyst Coverage Canaccord Genuity
Desjardins Capital Markets
Dundee Capital Markets
Fraser Mackenzie
Haywood Securities
Jennings Capital
Macquarie Capital Markets
Paradigm Capital
Raymond James
RBC Capital Markets
Salman Partners
Scotia Capital
Stifel Nicolaus
TD Securities
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Experienced Management Team
Board of Directors Management Team
Tom Larsen
Chairman
Tom Larsen
President and CEO
Alexander Horvath, P.Eng.
Director
Alexander Horvath, P.Eng.
Executive Vice President, Exploration
Jean Depatie, P.Geo.
Director
Martin Bourgoin, P.Geo.
Executive Vice President, Operations
Ashwath Mehra
Director
Jeff Hussey, P.Geo.
Executive Vice President, Corporate Business Development
Donald A. Sheldon, LLB., P.Eng.
Director
Bruce Mitton, P.Geo.
Vice President, Exploration
Jean Lafleur P.Geo.
Director
Jean-Luc Chouinard, P Eng.
Vice President, Project Development
Francis Sauvé
Director
Miles Nagamatsu, CA
Chief Financial Officer
Joseph S. C. Chan
Director
Jorge Estepa
Vice President, Secretary-Treasurer
Richard Quesnel: Senior Technical Advisor and Head of the Advisory Board
Advisory Board: Richard Quesnel, Paul Ankcorn, Doug Bache, and William Harding
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Over 200 years of combined exploration and mine operations experience
Why invest in Champion Iron Mines?
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Favourable Operating
Environment
•Established iron ore mining
district the Labrador
Trough.
•Favourable tax environment
(40% tax rebate on
exploration expenditures).
•Access to low-cost power
and close to rail and port
infrastructure.
•Quebec`s Plan Nord $80
billion over 25 years.
•Quebec is a world class area
to develop mines.
•Unprecedented Iron Ore
price range and forecast.
•Skilled labor work force.
Champion Iron Mines’
Competitive Advantage
•Fermont holdings: 17 iron ore
Brownfield projects (710 km2).
•Feasibility Stage Fire Lake
North project (Surface deposit
of coarse grained specular
Hematite)
• Easier to liberate.
• Deleterious elements
in concentrate are
well below industry
specifications limits.
•Experienced team of project
developers and mine builders.
•Upside potential for growth is
high.
•Several de-risking initiatives
underway.
Existing Rail Infrastructure
Quebec North Shore & Labrador Railway (“QNS&L”)
Fire Lake North PEA Base Case connection to Bloom Lake railway requires 94 km of rail – includes turnaround loop and sidings
QNS&L links to Sept-Iles and Pointe Noire.
Bloom Lake and QNS&L railways are considered common carriers.
Common carriers allocate capacity on a first-come, first-serve basis.
Cartier Railway:
Linked to Port-Cartier
Privately owned by ArcelorMittal
Within Fire Lake North Project boundary.
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World Class Port of Sept-Îles Infrastructure Expanding to Meet Demand
Pointe Noire Multi User Wharf
Announced long term agreement (20-40 years) on July 18th, 2012.
10 Mt ship loading capacity reserved with the possibility to increase tonnage.
Completion March 31st, 2014; 18 months prior to "FLN" startup.
Phase 1: 50Mtpy $220 million.
Federal Government announced $55 million funding or 25% of project.
Phase 2: Planning for 100 Mtpy.
Port of Sept-Îles
RTZ-IOC shipping facility.
Port-Cartier
ArcelorMittal shipping facility.
$2.1B expansion is underway and will include concentrator expansion with port and rail infrastructure upgrades.
Located 62 km west of Sept-Iles.
Pointe Noire
Sept-Iles
Courtesy of the Port de Sept Isles
China Max ship capacity 300kt
Champion Iron Mines participating in a
feasibility study with CN Rail and Caisse
de Depot et Placements du Québec
See August 29th 2012 press release
Key milestone for upcoming feasibility
on Consolidated Fire Lake North
Will reduce OPEX compared to PEA
study
CHM still focused on the feasibility
study.
CN focused on environmental
permitting
CHM will continue to develop
independent options for port handling
for concentrate stockpiling and
reclaiming.
Development: Consolidated Fire Lake North
Project
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Based upon the following assumptions:
Key Results Pre-Tax Basis
Internal Rate of Return (IRR) (8% Discount Rate) 41.5%
Undiscounted Cash Flow $10.9B
Net Present Value @ 5% Discounted Cash Flow $5.6B
Net Present Value @ 8% Discounted Cash Flow $4.0B
Net Present Value @ 10% Discounted Cash Flow $3.2B
Payback Period (8% Discount Rate) 2.3 Years
Capital Costs:
Operating Costs:
Price assumptions:
Mine-Life:
Exchange rate:
Total Resources(1):
In Pit Resources
US$1,368 million (includes rail and port infrastructure)
US$51.01 per tonne (average 25 years);
US$39.46 per tonne (average years 1 to 5)
US$115 per tonne of concentrate at 65% Fe
40 years (average of 8.7 million tonnes/year for the first 25 years)
$1.00 USD to $1.00 CDN
400 million tonnes grading 30.6% Fe (NI43-101 Measured and Indicated Resources)
661 million tonnes grading 27.7% Fe (NI43-101 Inferred Resources)
921.8 million tonnes grading 28.8% Fe at an 8% cut-off grade
Fire Lake North Development Project November 2011 Preliminary Economic Assessment Update – Highlights
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OPERATING EXPENDITURES (US$/TONNE OF CONCENTRATE)
COST PARAMETERS AVERAGE 25 YEARS AVERAGE YEARS 1 TO 5
Mining 22.56 12.13
Concentrating, crushing and processing 4.52 3.97
Site infrastructure, sales and general administration 4.40 3.39
Environmental tailings and management 0.29 0.26
Rail transport 15.52 16.14
Port facilities 3.72 3.57
Equipment Lease Cost 1.67 5.17
Total 52.68 44.63
Fire Lake North Project Preliminary Economic Assessment Study
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CAPITAL EXPENDITURES (US$ MILLIONS)
COST CENTRES $ MILLIONS
Pre-stripping of open pit areas 97.5
Concentrator and site infrastructure including loadout facilities 682.3
Railway (62km distance and 94km total including turnaround loop and sidings) 228.8
Port Facilities: Railcar unloading, stacker/reclaimer, conveyors 96.8
Environmental and Tailings Management 27.9
Other Pre Production Costs 34.0
Sub-total 1,167
Contingency 201
Total 1,368
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Fire Lake North Project Schedule Development, Construction, and Production
Diamond Drilling
Scoping Study
Feasibility Study
Environmental / Social Studies
Community Consultation
Permitting
Construction
Production
Q1
2011 2012
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q2 Q3 Q4
2014 2015
Q1 Q2 Q3 Q4
2013
Q1 Q2 Q3 Q4
Feasibility Study: Early Q4 2012.
Press Release June 21, 2012: Over
20,000 m feasibility definition drilling is
completed for feasibility study.
Strike length of both the West Pit
(3500m) and the East Pit (2400m)
synformal fold closures are open at
depth.
Resources are increasing outside the
Nov. 2011 PEA ultimate pit limits.
Several de-risking initiatives are
underway
Fire Lake North Project Growth through Development
See www.championiromines.com for reports maps and assays 16
17 High Grade – Coarse Specular Hematite Quartz Specular Hematite Mineralization
Fire Lake North – Metallurgy Press Release, August 1st, 2012
High quality sinter concentrate with very low deleterious elemental content.
Liberates at 850 micron (-20 mesh) and produces a 65-66% iron concentrate.
Assuming a concentrate with 66% Fe ; No magnetic separation circuit required
Alumina is 0.52% International Standard < 2%.
Silica content is 5%
Al2O3 : SiO2 ratio of 0.14 versus the upper industry specification limit of 1.
This very low alumina to silica ratio is an ideal blending product for steel mills.
Fire Lake North Development Project
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Fire Lake North Development Project
19
500
meters
Moire Lake Project Initial Mineral Resource Estimate: March 29, 2012
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Arc
elo
r Mitta
l Pro
pe
rty B
ou
ndary
Mineral Resource Estimate:
Indicated Resources -164 million
tonnes grading 30.5% Total Iron.
Inferred Resources - 417 million
tonnes grading 29.4% Total Iron.
DDH LM11-12: 503 m @ 31% total iron.
Kilometric synform with hematite and
magnetite outcrops at surface.
Adjacent to ArcelorMittal Mont-Wright mine.
A
A’
500
meters
Moire Lake Project Infrastructure: Adjacent to rail (8km), road, & power
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To view a larger more detailed version of this map please visit:
http://www.championironmines.com/vns-site/page-oil_can.html
Oil Can Project Initial Mineral Resource Estimate
Potential for low strip ratio < 1 : 1.
Potential Bench width 150- 350m.
972 Mt of iron oxide grading 33.2% at a
15% iron cut-off.
924 Mt of mixed iron oxide
mineralization with a silicate component.
This deposit is open at depth.
Orientation metallurgical tests indicate a
relatively coarse liberation grind size
Commercial grade magnetite sinter
feed concentrate can be produced
Oil Can Project Exploration Upside
The 2011 drill program returned long magnetite-hematite iron formation
intersections up to 545 metres in length.
The 400 metre spaced drill program is completed.
Mineral Resource Estimate scheduled for Q2 2012.
SELECTED* COMPOSITE ASSAY RESULTS
HOLE-ID HOLE LENGTH AZIMUTH DIP FROM TO INTERVAL** GRADE***
Metres Degrees Degrees Metres Metres Metres Total Fe%
OC11-02 594 310 -45 188.5 590.0 401.5 30.7
Including 246.9 460.4 213.5 33.1
OC11-05 545 020 -45 241.6 545.0 303.4 34.7
Including 407.2 538.0 130.8 36.5
OC11-08 616 180 -50 67.0 612.7 545.7 33.7
Including 67.0 509.3 442.3 36.4
* Selected Composite Assay Results are stated only for results recently received. The Selected Composites are not
necessarily representative of the average grade or thickness of the mineral zones or potential resource.
** Intervals are down-hole lengths and not true widths of the mineral zones.
*** Grades are calculated from Total Fe% sample assays completed by ALS Chemex Laboratories using the “High
Grade/Ores Method” and XRF analysis. 23
South & East Zones
Section 9800N (Facing North)
200 metres
OC11-02
IF
IF
Ovb OC11-19 OC11-01
OC11-08 OC11-07
OC11-05 East Zone
South Zone
190.0m @
30.6%
Assay Pending
401.5m @ 30.7%
incl. 213.5 @
33.1%
545.7m @ 33.7%
incl. 442.3 @
36.4%
197.2m @ 26.8%
incl. 145.5 @
28.1%
303.4m @ 34.7%
incl. 130.8m @
36.5%
Oil Can Project Exploration Upside
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Central Zone (Facing Northwest)
200 metres
OC11-10 OC11-03
OC11-16 OC11-14
191.7m @
28.2%
472.2m @ 28.0%
incl. 119.6m @
35.2%
224.0m @ 28.1%
incl. 140.0m @
30.0%
311.4m @ 27.6%
incl. 269.0m @
29.2%
IF
Ovb
Oil Can Project Exploration Upside
25
200 metres
North Zone
Section 5800E (Facing East)
OC11-04
472.2m @ 28.0%
incl. 119.6m @
35.2%
IF
Ovb OC11-09
OC11-12 OC11-13 OC11-15
221.2m @ 25.0%
incl. 128.9m @
28.7%
Assays Pending
414.1m @ 25.1%
incl. 139.0m @
29.5%
141.5m @ 29.2%
179.5m @ 32.8%
Oil Can Project Exploration Upside
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Milestones
Fire Lake North Definition Drilling Completed
Updated PEA on Fire Lake North Completed
Initial NI 43-101 Mineral Resource Estimate for Oil Can Project
(adjacent to Fire Lake North Project) Completed
Metallurgical results - Fire Lake North, Moire Lake, Oil Can Projects Completed
Fire Lake North Feasibility Study including Marketing Study Q3 2012
Fire Lake North Construction Start Q4 2013
Fire Lake North Production 2015
Why Invest in
Champion Iron Mines?
Fire Lake North NPV: $4 Billion @ 8% DCF.
Adjacent Oil Can Initial Resource Estimate 1,896Mt @
28.7%.
17 Brownfield projects (710 km2) near 5 operating mines.
Experienced team: Exploration; development;
construction; commissioning & operations management.
Financed through to feasibility; Favourable tax
environment.
Quebec`s Plan Nord: Object to attract $80B in investment.
Access to power and close to rail and port.
Multi-user port is in construction ; Trans-shipping is an
option.
Iron price range and forecasts is unprecedented.
Several de-risking initiatives associated to mine start-up
underway.
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Thank You
29
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FSE: P02; OTCQX: CPMNF
www.championironmines.com
Fire Lake North Exploration Camp
Coarse Grained
Specular Hematite
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Coarse Specular Hematite in Drill Core
O’Keefe Purdy Project Exploration Upside
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Harvey Tuttle Project NI 43-101 Inferred Resource Estimate:
717Mt @ 25% iron; magnetite rich.
Intersected multiple significant iron formation
intervals in 2010 drill program.
Total of 13,165m of drilling completed.
Less than 50% of the kilometric scale magnetic
anomalies have been tested.
Located 25 km NW of Fire Lake North.
Within conveying distance from Fire Lake North
planned concentrator (20-30km).
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Advanced Exploration
Bellechasse Deposit
Deposit located within Consolidated Fire Lake North
Project
NI 43-101 Resource Estimate:
Inferred Resources; 215Mt @ 29% Iron;
Magnetite rich iron formation.
Adjacent to Hwy 389; 10km from Fire Lake North.
Synform geometry is favorable for open pit mining.
Labrador Trough Annual Production Iron Ore Production Upside
Company Current Annual
Production
Future
Annual Forecast
IOC/RTZ 17 mtpy 26 mtpy1
ArcelorMittal 13 mtpy 24 mtpy2
Cliffs Natural Resources (Wuhan) 12 mtpy 28 mtpy
Labrador Iron Mines 2 mtpy 5 mtpy
Adriana Resources (Wuhan) 0 50 mtpy
New Millennium (Tata) 0 27 mtpy
Century Iron Mines (Wuhan) 0 ~22 mtpy
Champion Iron Mines 0 ~18 mtpy
Alderon Iron Ore Corp. 0 ~16 mtpy
Total Current and Forecasted Production 44 ~ 200 mtpy
1. Possibility of expanding production up to 50 mtpy
2. Possibility of expanding production to 50 mtpy 33
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1980 1985 1990 1995 2000 2005 2010
China
Japan
Rest of theWorld
Global Steel Production Shows
Continued Demand for Iron Ore
34
China’s CAGR* is 9.88% over
the last 30 years vs. 2.30% for
total global steel production
over the same period.
Source: World Steel Association website
* CAGR: Compound annual growth rate
Kilo
ton
s
Iron Ore Types
Coarse Grained Specular Hematite
Direct Shipping Ore
Magnetite Rich Taconite
Coarse Grained Specular Hematite
35
Fermont Iron Ore District
(“FIOD”)
Historically the Fermont and Labrador mining
camps have produced 33 Mta.
RTZ/IOC = 17 Mta.
ArcelorMittal = 13 Mta.
Wabush = 3 Mta.
“ Marginal Era”:
For 30-40 years pre-2003
the price per tonne of concentrate
was $25- $30/tonne,
costs per tonne were similar.
Current 3 years moving average is
$115-120/tonne.
2011 spot price averaged ~$150-170/tonne.
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