Champion Iron Ltd (TSE: CIA) (OTCMKTS: CIAFF) has secured a sizeable investment to propel the development of a promising new iron ore mine in southwestern Labrador. The Kamistiatusset (Kami) Project resides in what is known as the Labrador Trough, near the eastern border with Quebec.
“With a strategic portfolio of projects in the Labrador Trough, our company is well positioned to meet the growing demand for high-purity iron ore,” Champion said in a social media post earlier this month. The company’s flagship Bloom Lake project at the south end of the trough, in Quebec, has had nearly C$6.5 billion invested into it.
Japan’s Nippon Steel Corp (OTCMKTS: NISTF), the nation’s top steelmaker, and the trading company Sojitz Corp (TYO: 2768), have agreed to contribute an initial C$68.6 million to the Kami operation. A feasibility study must still be completed, followed by a final investment decision. The two investors will contribute even more funding for construction, development and other costs once that process is concluded.
Nippon will hold a 30 per cent interest, Sojitz will retain a 19 per cent stake and Champion will be a 51 per cent shareholder in the project. A pre-feasibility study completed in December last year determined that Kami was a worthwhile undertaking.
“The project is, technically and financially, sufficiently robust to warrant proceeding to the next phase of project development, feasibility study,” Champion stated in the pre-feasibility report filed in March.
The mine is expected to take two years to build and have a 25-year life, based on information from this study. High-purity iron is a recent addition to the Canadian government’s list of critical minerals.
“Kami benefits from one of the best resources and is one of the most advanced direct reduction quality iron ore projects globally,” Nippon manager, Ryuichi Nagai, said in a press release on Wednesday.
Good news on Kami!
Altius congratulates Champion on its announcement yesterday of a a 51/49% partnership with Nippon Steel, one of the largest steel producers globally, and Sojitz Corporation, a prominent Japanese trading company with operations spanning over 50 countries. The…— Altius Minerals Corporation (@AltiusMinerals) December 19, 2024
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Newfoundland and Labrador is a mining-friendly jurisdiction
It is Canada’s number one producer of iron ore, produces more nickel than every province except Ontario and is the nation’s third largest copper provider. Other commodities it holds significant quantities of include uranium, rare earths, cobalt and gold.
The province ranked within the top 10 for overall investment attractiveness in the Fraser Institute’s most recent Annual Survey of Mining Companies report. It is currently rated as the ninth best in the world and was listed even higher in the previous assessment from the think tank, sitting in spot number four.
A combination of supportive mining policies and rich mineral resources are what makes the region so valuable for mining companies and investors. The province has even established a Junior Exploration Assistance Program to help fund explorers looking for new deposits.
In recent months, Newfoundland and Labrador has been experiencing a modern-day gold rush.
“Recent gold discoveries might explain why investors view the province as a premier mining investment destination,” Fraser Institute analysts, Julio Mejía and Alex Whalen, said in an article last June. “In fact, the province’s Valentine Gold Project passed environmental approval in 2022 and is set to become Atlantic Canada’s largest gold mine.”
This operation, run by Calibre Mining Corp (TSE: CXB) (OTCMKTS: CXBMF), is one of Newfoundland’s most valuable mining assets. Its construction is nearly complete and it will enter the commercial production phase next year.
The Voisey’s Bay nickel-copper-cobalt mine operated by Vale S.A. (NYSE: VALE) and the Iron Ore Company of Canada’s open pit operation near Labrador City are notable too.
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rowan@mugglehead.com
