Drilling Confirms Continuity and Expansion
Potential of Bloom Lake Beyond Life-of-Mine
Plan
Measured and Indicated Resources Increase by
40%
Inferred Resources Increase by 360%
MONTRÉAL, Aug. 22,
2023 /CNW/ - (SYDNEY, August 23,
2023) - Champion Iron Limited (TSX: CIA) (ASX: CIA) (OTCQX:
CIAFF) ("Champion" or the "Company") announces updated mineral
resource and reserve estimates (the "Mineral Resource and Reserve
Estimate"), along with accompanying life-of-mine ("LoM") plan,
prepared pursuant to National Instrument 43-101 – Standards of
Disclosure for Mineral Projects ("NI 43-101") for the Bloom Lake
Mining Complex ("Bloom Lake"), located near the town of
Fermont, in north-eastern Québec.
The technical report with respect to the Mineral Resource and
Reserve Estimate and the LoM plan for Bloom Lake (the "2023
Technical Report") will be filed under the Company's profile on
SEDAR+ at www.sedarplus.ca within 45 days of the date of this press
release.
Highlights
- Optimized mine plan, confirming the 18 years' LoM based on the
mineral reserves
- Expanded opportunity beyond the LoM plan, including an increase
to the measured and indicated ("M&I") resources by 40% and an
increase to the inferred resources by 360%
- LoM average iron metallurgical recovery of 82.0% and plant feed
grade of 28.6% Fe
- Average LoM yearly production of 15.2 million wet metric tonnes
of high purity iron ore concentrate at 66.2% Fe
Champion CEO, Mr. David Cataford,
commented, "The combination of our expanded mineral resources,
skilled workforce and supportive local stakeholders positions our
Company to continue to positively impact the region for
generations. The Labrador Trough, including Bloom Lake, contains
one of the largest and purest iron ore resources globally and
offers a unique opportunity for local stakeholders to participate
in reducing steel industry emissions, which represents nearly 10%
of global emissions. In tandem with our vision to be a global
leader in the green steel supply chain, we continuously strive to
minimize our impact on the environment in keeping with our
corporate values and respect for the land where we operate."
Mineral Resource and Reserve
Estimate Summary
Since the previously issued NI 43-101 Technical Report entitled
"Bloom Lake Mine Feasibility Study Phase 2, Fermont, Québec, Canada" with an effective date of June 20, 2019 (the "2019 Technical Report"),
additional work programs were completed by the Company, including
diamond drilling and advanced modelling to optimize mining and
processing of the deposit. Additionally, a revised assessment of
iron ore prices resulted in higher prices assumption compared to
the 2019 Technical Report, which, together with the additional work
programs, resulted in an increase of 40% in the estimated M&I
mineral resources for Bloom Lake. While the LoM plan and the pit
designs have been optimized, the change in mineral reserves is not
material.
Mineral Resources
SRK Consulting (U.S), Inc. ("SRK") was retained to audit the
mineral resources model for Bloom Lake completed by the Company.
Since the 2019 Technical Report, the Company drilled an additional
106 core boreholes (18,465 metres), representing an increase of 13%
in core boreholes drilled metres. The infill drilling completed at
Bloom Lake resulted in the successful conversion of inferred
resources to indicated resources. Furthermore, the infill drilling
demonstrated continuity of iron mineralization, enabling for grade
continuity to be established and estimated. This, combined with the
revised IODEX 65% Fe CFR China Index ("P65") price assumption,
resulted in a significantly larger estimated resource pit shell
compared to the 2019 Technical Report model. Offsetting this
increase in mineral resources includes the depletion of resources
based on topographic differences between January 1, 2020, and the forecasted April 1, 2023, accounting for a reduction of the
mineral resources by 67 million tonnes.
Table 1: 2023 Mineral resource Estimate for Bloom Lake at a
Cut-Off Grade of 15% Fe (Audited Mineral Resources Statement, Bloom
Lake by SRK, March 31, 2023)
Classification
|
Tonnage
|
Fe
|
CaO
|
Sat
|
MgO
|
Al2O3
|
|
Mt
|
%
|
%
|
%
|
%
|
%
|
Measured
|
186.7
|
30.4
|
1.3
|
5.5
|
1.3
|
0.3
|
Indicated
|
1,065.5
|
28.4
|
1.3
|
6.1
|
1.2
|
0.5
|
Total
M&I
|
1,252.2
|
28.7
|
1.3
|
6.0
|
1.2
|
0.5
|
Inferred
|
246.3
|
26.6
|
1.4
|
6.4
|
1.2
|
0.5
|
Table 1 notes:
- Mineral resources are not mineral reserves and have not
demonstrated economic viability under the assumptions contained in
the 2023 Technical Report. All figures have been rounded to reflect
the relative accuracy of the estimates.
- The resource estimate is reported undiluted at a cut-off grade
of 15% iron.
- The 2023 resource shell is based on a long-term P65 iron price
of US$110.24/dmt, a premium of
US$2.04/dmt for the 66.2% Fe
concentrate and an exchange rate of 1.27. It was made
using Geovia Whittle (software version 4.7.2).
- The qualified person ("QP") for the mineral resource estimate,
as defined by NI 43-101, is Erik
Ronald, P. Geo., of SRK. The effective date of the
estimate is April 1, 2023.
- The geological interpretations for the Bloom Lake deposit were
based on lithological logging, analyses from drill core, grade
control data, geological maps, historical models, and ground
magnetic surveys. The geology and controls on
the mineralization are considered well understood.
- The mineralized iron formation units in the lithology model
include iron formation, silica iron formation, and limonite. The
iron formation model further differentiates the iron formation
units into operational quality categories of low (under 0.6%,),
moderate and elevated (over 16%) CaO + MgO values.
- All 3D digital geological modelling was performed using
Leapfrog Geo™ software. In the QP's opinion, the geological
model is appropriate for the size, grade distribution, and geometry
of the mineralized zones and is suitable for mineral resource
estimation of the Bloom Lake project.
- The mineral resource model is based on 6.0 m composite
intervals within the iron formation. Grade capping was reviewed but
deemed unnecessary and was not applied. Ordinary kriging (OK) was
used for the estimation of CaO, Fe, MgO, and SAT. Al2O3 was
estimated into the block model using inverse distance weighting to
a power of three (ID3) estimation.
- Mineral Resources were classified into measured, indicated, and
inferred mineral resources categories based on the geological
understanding of mineralization and structure on the property,
the quality of the underlying drilling data, history of mining
production and reconciliation, mineralization and grade continuity,
and drillhole spacing.
- The QP is satisfied that the mineral resources were
estimated following CIM Estimation of Mineral Resource and Mineral
Reserves Best Practices Guidelines (November
2019). The mineral resources may be affected by further
infill and exploration drilling that may result in increases or
decreases in subsequent mineral resource estimates. The mineral
resources may also be affected by subsequent assessments of mining,
environmental, processing, permitting, taxation, socio-economic,
and other factors.
Mineral Reserves
The mineral reserves for Bloom Lake are estimated at 716 million
tonnes at an average grade of 28.6% Fe as summarized in Table 2.
The mineral reserve estimate was prepared by the Company and the
resource block model was prepared by the Company and audited by
SRK. The mineral reserve estimate stated herein is consistent with
the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM")
Definition Standards on mineral resources and reserves ("CIM
Definition Standards"). As such, the mineral reserves are based on
M&I mineral resources and do not include any inferred mineral
resources, which are classified as waste within the mine design.
While the pits were optimized, their scope and size are very
similar to those previously published in the 2019 Technical Report.
The pits redesign was based on Pseudoflow shells with an updated
cost model and a more conservative iron ore price of US$99/dmt for P65, compared to the resource
shells.
Table 2: 2023 Mineral Reserve Estimate for Bloom Lake at a
Cut-Off Grade of 15% Fe.
Classification
|
Diluted
Tonnage
|
Diluted
Fe
|
CaO
|
Sat
|
MgO
|
Al2O3
|
Mt
|
%
|
%
|
%
|
%
|
%
|
Proven
|
183.7
|
30.0
|
1.3
|
5.6
|
1.3
|
0.3
|
Probable
|
532.5
|
28.1
|
2.1
|
9.2
|
2.0
|
0.5
|
Total Proven &
Probable
|
716.2
|
28.6
|
1.9
|
8.3
|
1.8
|
0.4
|
Waste (Includes
Inferred Resources)
|
685.7
|
-
|
-
|
-
|
-
|
-
|
Table 2 notes:
- The mineral reserves were estimated using the Canadian
Institute of Mining, Metallurgy and Petroleum (CIM) Standards for
Mineral Resources and Reserves, Definitions and Guidelines prepared
by the CIM Standing Committee on Reserve Definitions and adopted by
the CIM Council on May 10, 2014.
- The QP for the mineral reserve estimate, as defined by NI
43-101, is Olivier Hamel,
P. Eng., of Quebec Iron Ore Inc. ("QIO"), a subsidiary of the
Company. The effective date of the estimate is April 1, 2023.
- In the ultimate pit design, all measured resources and
associated dilution/ore loss were converted to proven mineral
reserves. All indicated resources and associated dilution/ore loss
were converted into probable mineral reserves.
- Stockpiles are excluded from reserve calculations due to their
small size (<1 Mt).
- Bulk density of ore is variable but averages 3.39 t/m3
(pre-dilution).
- Remaining strip ratio is 0.96:1 (including overburden).
- Mining dilution was calculated using a 2-m contact skin.
- The average mining dilution is 1.73% at a grade of 0% Fe.
Dilution was applied block by block and shows a wide range of local
variability.
- The average ore loss is 1.91% at a grade of 29% Fe. Ore loss
was applied block by block and shows a wide range of local
variability.
- Mineral reserves are based on a mining surface projected to
April 1, 2023. The last survey was
done in Q3 2022.
- Mineral reserves are estimated at a cut-off grade of 15% Fe
(diluted), which has historically been used. Current cost/revenue
model allows to calculate a break-even cut-off grade and the result
of 14.1% Fe supports the current practices.
- Mineral reserves are estimated using a long-term iron ore
reference price (Platt's 65%) of USD99/dmt and an exchange rate of 1.27 CAD/USD. A price adjustment to 66.2% of
USD1.83/dmt was added.
- Reserve open pit optimization was conducted using Geovia
Whittle (software version 4.7.2) to determine the optimal economic
shape of the open pit to guide the pit design process.
- SAT stands for SATMAGAN, an industry standard device that
measures the magnetic content by weight of a sample. This value is
assumed to be the magnetite content by weight.
- The author is not aware of any known environmental, permitting,
legal, title-related, taxation, socio-political or marketing
issues, or any other relevant issues not reported in the 2023
Technical Report, that could materially affect the mineral reserve
estimate.
- Numbers may not add up due to rounding.
Direct Reduction Pellet Feed
Project
On January 26, 2023, the Company
announced the positive results of a study evaluating the processing
and infrastructure required to modify the Bloom Lake Phase II plant
to improve its product from a 66.2% Fe iron ore concentrate to a
Direct Reduction Pellet Feed quality iron ore at 69% Fe (the "DRPF
Project"). The DRPF Project was not considered in the 2023
Technical Report as the project is pending final investment
decision. As such, the mine plan, cost model and sales described
herein are based entirely on Bloom Lake's current infrastructure
and iron ore concentrate quality of 66.2% Fe.
The DRPF Project could impact the mineral resources and mineral
reserves for Bloom Lake. Pending a final investment decision and
the advancement of the DRPF Project, its impact on the
profitability of uneconomic ore should be assessed. As a result,
the ultimate pit size, cut-off grades and material routing could be
modified.
About Champion Iron
Limited
Champion, through its wholly-owned subsidiary Quebec Iron Ore
Inc., owns and operates the Bloom Lake Mining Complex, located on
the south end of the Labrador Trough, approximately 13 km north of
Fermont, Québec. Bloom Lake is an
open-pit operation with two concentrators that primarily source
energy from renewable hydroelectric power. The two concentrators
have a combined nameplate capacity of 15 Mtpa and produce a low
contaminant high-grade 66.2% Fe iron ore concentrate with a proven
ability to produce a 67.5% Fe direct reduction quality iron ore
concentrate. In January 2023, the
Company announced the positive findings of a study evaluating the
upgrade of half of the Bloom Lake mine capacity to a direct
reduction quality pellet feed iron ore and approved an initial
budget to advance the project. Bloom Lake's high-grade and low
contaminant iron ore products have attracted a premium to the
Platts IODEX 62% Fe iron ore benchmark. The Company ships iron ore
concentrate from Bloom Lake by rail, to a ship loading port in
Sept-Îles, Québec, and has sold its iron ore concentrate to
customers globally, including in China, Japan,
the Middle East, Europe, South
Korea, India and
Canada. In addition to Bloom Lake,
Champion owns a portfolio of exploration and development projects
in the Labrador Trough, including the Kamistiatusset Project,
located a few kilometres south-east of Bloom Lake, and the
Consolidated Fire Lake North iron ore project, located
approximately 40 km south of Bloom Lake.
Cautionary Note Regarding
Forward-Looking Statements
This press release includes certain information and statements
that may constitute "forward-looking information" under applicable
securities laws. Forward-looking statements are statements that are
not historical facts and are generally, but not always, identified
by the use of words such as "plans", "expects", "is expected",
"budget", "scheduled", "estimates", "continues", "forecasts",
"projects", "predicts", "intends", "anticipates", "aims", "targets"
or "believes", or variations of, or the negatives of, such words
and phrases, or state that certain actions, events or results
"may", "could", "would", "should", "might" or "will" be taken,
occur or be achieved. Inherent in forward-looking statements are
risks, uncertainties and other factors beyond the Company's ability
to predict or control.
Specific Forward-Looking Statements
All statements other than statements of historical facts
included in this press release that address future events,
developments or performance that Champion expects to occur are
forward-looking statements. Forward-looking statements include,
among other things, Management's expectations regarding: (i) Bloom
Lake's life of mine, recovery rates, production, economic and other
benefits; (ii) the project to upgrade the Bloom Lake iron ore
concentrate to a higher grade with lower contaminants and to
convert approximately half of Bloom Lake's increased nameplate
capacity of 15 Mtpa to commercially produce a DR quality pellet
feed iron ore, expected project timeline, capital expenditure,
budget and financing; (iii) the shift in steel industry production
methods towards reducing emissions and green steel production
methods and the Company's participation therein, contribution
thereto and positioning in connection therewith; (iv) production
and recovery rate targets and the Company's performance; and (v)
the Company's growth and opportunities generally.
Deemed Forward-Looking Statements
Statements relating to "reserves" or "resources" are deemed to
be forward-looking statements as they involve the implied
assessment, based on certain estimates and assumptions, that the
reserves and resources described exist in the quantities predicted
or estimated and that the reserves can be profitably mined in the
future. Actual reserves and resources may be greater or less than
the estimates provided herein.
Risks
Although Champion believes the expectations expressed in such
forward-looking statements are based on reasonable assumptions,
such forward-looking statements involve known and unknown risks,
uncertainties and other factors, most of which are beyond the
control of the Company, which may cause the Company's actual
results, performance or achievements to differ materially from
those expressed or implied by such forward-looking statements.
Factors that could cause the actual results to differ materially
from those expressed in forward-looking statements include, without
limitation: (i) the results of feasibility studies; (ii) changes in
the assumptions used to prepare feasibility studies; (iii) project
delays; (iv) timing and uncertainty of industry shift to green
steel and EAF; (v) continued availability of capital and financing
and general economic, market or business conditions; (vi) general
economic, competitive, political and social uncertainties; (vii)
future prices of iron ore; (viii) future transportation costs; (ix)
failure of plant, equipment or processes to operate as anticipated;
* delays in obtaining governmental approvals, necessary permitting
or in the completion of development or construction activities; and
(xi) the effects of catastrophes and public health crises,
including the impact of COVID-19 on the global economy, the iron
ore market and Champion's operations, as well as those factors
discussed in the section entitled "Risk Factors" of the Company's
2023 Annual Report, Annual Information Form and MD&A for the
financial year ended March 31, 2023,
which are available on SEDAR+ at www.sedarplus.ca, the ASX at
www.asx.com.au and the Company's website at www.championiron.com.
There can be no assurance that such information will prove to be
accurate as actual results and future events could differ
materially from those anticipated in such forward-looking
information. Accordingly, readers should not place undue reliance
on forward-looking information.
Additional Updates
All of Champion's forward-looking information contained in this
press release is given as of the date hereof or such other date or
dates specified in forward-looking statements and is based upon the
opinions and estimates of Champion's Management and information
available to Management as at the date hereof. Champion disclaims
any intention or obligation to update or revise any of the
forward-looking information, whether as a result of new
information, future events or otherwise, except as required by law.
If the Company does update one or more forward-looking statements,
no inference should be drawn that it will make additional updates
with respect to those or other forward-looking statements. Champion
cautions that the foregoing list of risks and uncertainties is not
exhaustive. Readers should carefully consider the above factors as
well as the uncertainties they represent and the risks they
entail.
Abbreviations
Unless otherwise specified, all dollar figures stated herein are
expressed in millions of United
States dollars, except for: (i) tabular amounts which are in
thousands of United States
dollars; and (ii) per share or per tonne amounts. The
following abbreviations and definitions are used throughout this
press release: US$ (United States
dollar), Fe (iron ore), dmt (dry metric tonnes), Mtpa (million
tonnes per annum), M (million), km (kilometers), LoM
(life-of-mine), Management (Champion's management team), Bloom Lake
or Bloom Lake Mine (Bloom Lake Mining Complex) and Phase II (Phase
II expansion project). The utilization of "Champion" or the
"Company" refers to Champion Iron Limited and/or one, or more, or
all of its subsidiaries, as applicable.
Qualified Person and Data
Verification
Mr. Vincent Blanchet, P. Eng.,
Engineer at QIO, the operator of Bloom Lake, is a QP as defined by
NI 43-101 and has reviewed and approved, or has prepared, as
applicable, the disclosure of the scientific and technical
information contained in this press release. Mr. Blanchet's review
and approval does not include statements as to the Company's
knowledge or awareness of new information or data or any material
changes to the material assumptions and technical parameters
underpinning the feasibility study contained in the 2019 Technical
Report. Mr. Blanchet is a member of the Ordre des ingénieurs du
Québec.
The following QPs have participated in the preparation of the
2023 Technical Report:
Qualified Person /
Firm
|
General Overview of
Responsibilities
|
Champion Iron
Limited:
|
Vincent
Blanchet
|
- History, geological
settings and mineralization, deposit type, adjacent properties and
other relevant information.
- Mineral titles,
exploration and drilling.
- Sample preparation,
analyses, and security.
|
Olivier
Hamel
|
- Mineral reserve
estimate.
- Mining methods,
capital and operating costs.
|
BBA Inc.:
|
André
Allaire
|
- Technical report
integration.
- Market
studies.
- Property and
infrastructure description.
|
Benoît
Ouellet
|
- Environmental
studies, permitting and social or community impact.
|
Soutex:
|
Jérôme
Martin
|
- Mineral processing
and metallurgical testing.
- Recovery
methods.
|
SRK:
|
Erik Ronald
|
- Mineral resource
estimate.
- Data
verification.
|
- It is the QP's opinion that data verification procedures have
yielded confidence in resource data and site procedures related to
drilling, logging, and sampling. The QP undertook an audit on the
reconciliation practices that yielded confidence in ore control
procedures with minor areas for operational improvement.
- The QP is of the opinion that the database is appropriate for
the purposes of mineral resource estimation and that the sample
density allows for a reliable estimate of the size, tonnage and
grade of the mineralization in accordance with the level of
confidence established by the mineral resource classification
categories as per CIM Definition Standards.
- It is the QP's opinion that the classification at Bloom Lake is
a reasonable reflection of the overall mineral resource risks
associated with geologic understanding and confidence, data
support, and grade continuity associated with the varying levels of
resource categories assigned.
National Instrument 43-101
compliance
Unless otherwise indicated, Champion has prepared the technical
information in this news release ("Technical Information") based on
information contained in the technical reports, news releases and
MD&A's (collectively the "Disclosure Documents") that are or
will be available under Champion's company profile on SEDAR+ at
www.sedarplus.ca. Each Disclosure Document was prepared by, or
under the supervision of, a qualified person as defined in National
Instrument 43-101 Standards of Disclosure for Mineral Projects of
the Canadian Securities Administrators ("NI 43-101"). Readers are
encouraged to review the full text of the Disclosure Documents
which qualifies the Technical Information. Readers are advised that
mineral resources that are not mineral reserves do not have
demonstrated economic viability. The Disclosure Documents are each
intended to be read as a whole, and sections should not be read or
relied upon out of context. The Technical Information is subject to
the assumptions and qualifications contained in the Disclosure
Documents.
CIM and JORC Comparison
Mineral resources and mineral reserves contained in this press
release are classified using the CIM Definition Standards. The
confidence categories assigned under the CIM Definition Standards
were reconciled to the confidence categories in the JORC Code (2012
Edition) (the "JORC Code"). As the confidence category definitions
are the same, no modifications to the confidence categories were
required.
There are differences in terminology in the JORC Code and the
CIM Definition Standards. Terminology differences are as follows:
the term "Ore Reserves" in the JORC Code is equivalent to "Mineral
Reserves" using the CIM Definition Standards, and the term "Proved
Ore Reserves" in the JORC Code is equivalent to "Proven Mineral
Reserves" using the CIM Definition Standards. There are no other
material differences between the JORC Code and the CIM Definition
Standards.
Measured and indicated mineral resources have been reported
separately from inferred mineral resources.
Mineral resources that are not mineral reserves do not have
demonstrated economic viability. Due to lower certainty, the
inclusion of mineral resources should not be regarded as a
representation by Champion that such amounts can necessarily be
totally economically exploited, and investors are cautioned not to
place undue reliance upon such figures. Therefore, no assurances
can be given that the estimates of mineral resources presented in
this statement will be recovered at the tonnages and grades
presented, or at all.
For additional information on Champion Iron Limited, please
visit our website at: www.championiron.com.
This press release has been authorized for release to the market
by the CEO of Champion Iron Limited, David
Cataford.
SOURCE Champion Iron Limited