DGAP-News: Champion Minerals Inc.: CHAMPION AND FANCAMP ENTER INTO LETTER OF INTENT FOR CHAMPION'S ACQUISITION OF FANCAMP'S JOINT VENTURE INTEREST IN THE FERMONT PROPERTIES AND SUBSCRIPTION FOR PRIVATE PLACEMENT IN FANCAMP
(firmenpresse) - DGAP-News: Champion Minerals Inc. / Key word(s): Letter of Intent
Champion Minerals Inc.: CHAMPION AND FANCAMP ENTER INTO LETTER OF
INTENT FOR CHAMPION'S ACQUISITION OF FANCAMP'S JOINT VENTURE INTEREST
IN THE FERMONT PROPERTIES AND SUBSCRIPTION FOR PRIVATE PLACEMENT IN
FANCAMP
09.05.2012 / 13:59
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NEWS RELEASE
CHAMPION AND FANCAMP ENTER INTO LETTER OF INTENT FOR CHAMPION'S ACQUISITION
OF FANCAMP'S JOINT VENTURE INTEREST IN THE FERMONT PROPERTIES AND
SUBSCRIPTION FOR PRIVATE PLACEMENT IN FANCAMP
Toronto (Canada), May 9, 2012 - CHAMPION MINERALS INC. (TSX: CHM; FSE: P02)
('Champion') and FANCAMP EXPLORATION LTD. (TSXV: FNC) ('Fancamp') are
pleased to announce that they have entered into a letter of intent for
Champion to: (i) acquire Fancamp's 17.5% joint venture interest in the
Fermont Properties (the 'Acquisition') in consideration for 14,000,000
common shares and 7,000,000 non-transferable warrants, (ii) subscribe for
10,000,000 units (each consisting of one common share and one
non-transferable warrant) of Fancamp for gross proceeds of $3,000,000 (the
'Private Placement'), and (iii) waive its right to buy-down one-third
(representing a 0.5% royalty interest) of Fancamp's 50% interest in the 3%
royalty (the 'Royalty') on the iron production from the Fermont Properties
in consideration of the issuance of 8,000,000 common shares of Fancamp (the
'Royalty Waiver'). All securities acquired in these transactions would be
subject to a lock-up agreement for a period of six years following the
closing date.
The Fermont Properties consist of 17 iron-rich mineral concessions,
totalling approximately 714 square kilometres in the Fermont Iron Ore
District of northeastern Québec, located 250 kilometres north of
Port-Cartier and 60 km southwest of the town of Fermont. Currently,
Champion holds an 82.5% interest in the Fermont Properties and Fancamp
holds the remaining 17.5% interest. On completion of the Acquisition,
Champion will hold an undivided 100% interest in the Fermont Properties,
subject to the Royalty.
Tom Larsen, Champion's President and CEO commented, 'Our agreement with
Fancamp which would result in Champion's 100% ownership of the Fermont
Properties will allow our project team to focus on advancing Fire Lake
North to detailed feasibility study later this year and give us increased
flexibility in arranging for development partners and sale of the iron ore
concentrate. Also, Champion's investment in Fancamp builds on our existing
partnership and will permit Champion shareholders to participate in future
royalty cash flow from all Fermont Properties and the development of
Fancamp's Magpie Project containing a substantial iron-titanium deposit.'
Fancamp's President, Peter H. Smith, stated, 'This agreement with Champion
will complete our contributory phase of Fancamp's share of the Fermont
Joint Venture, locking in the value of a significant share of this immense
asset originally staked by Fancamp as a grassroots project, a rather
remarkable achievement in a short period of time. This arrangement will
permit Fancamp shareholders to benefit from the expertise and experience of
Champion's project team to build and operate the Fire Lake North Project
and fully participate in the royalty stream from all Fermont Properties.'
Acquisition Highlights
- Acquisition of Fancamp's 17.5% interest in the Fermont Properties
currently governed by the Fermont Option and Joint Venture Agreement
dated August 31, 2009 (the 'Joint Venture Agreement') in consideration
of the issuance of 14,000,000 common shares and 7,000,000
non-transferable warrants of Champion (the 'Payment Warrants')
representing 12.6% of the common shares of Champion on a non-diluted
basis, including the 1,025,000 shares of Champion already owned by
Fancamp. The Joint Venture Agreement will be terminated except that
Champion's right of first refusal on the Lamellee iron property
contained therein will continue.
- Each Payment Warrant will give Fancamp the right to purchase one common
share of Champion at a price of $3.00 at any time between two and a
half and three years after closing, subject to acceleration in certain
circumstances.
- Fancamp will be entitled to nominate two persons to the Board of
Directors of Champion, the first by appointment upon closing of the
Acquisition and the second to be nominated for election at the next
annual meeting of shareholders of Champion.
- Fancamp will not vote its common shares of Champion against any
nominees to Champion's Board of Directors proposed by Champion or vote
against any resolutions supported by the Board of Directors of
Champion, subject to certain exceptions.
- Fancamp will be restricted from transferring securities of Champion for
a period of six years following the closing date of the Acquisition,
subject to certain exceptions, and transfers subsequent to that period
will be subject to further restrictions.
Private Placement Highlights
- Champion will subscribe for 10,000,000 units of Fancamp at a price of
$0.30 per unit which will result in Champion holding 16.49% of the
common shares of Fancamp on a non-diluted basis, including the
8,000,000 common shares of Fancamp to be issued in consideration of the
Royalty Waiver (described below).
- Each unit will consist of one common share and one non-transferable
warrant (the 'Private Placement Warrant'). Each Private Placement
Warrant will give Champion the right to purchase one common share of
Fancamp at a price of $0.60 at any time between two and a half and
three years after closing, subject to acceleration in certain
circumstances. If and when those warrants are exercised in the future
and assuming no other shares of Fancamp are issued by Fancamp or are
acquired by Champion, then Champion would hold 23.50% of the common
shares of Fancamp on a partially-diluted basis, including the
10,000,000 common shares of Fancamp and 8,000,000 common shares of
Fancamp to be issued in connection with the private placement
(described above) and the Royalty Waiver (described below),
respectively.
- Champion will be entitled to nominate two persons to the Board of
Directors of Fancamp, the first by appointment upon closing of the
Private Placement and the second to be nominated for election at the
next annual meeting of shareholders of Fancamp.
- Champion will not vote its common shares of Fancamp against the
election of any nominees to the Board of Directors proposed by Fancamp
or vote against any resolutions supported by the Board of Directors of
Fancamp, subject to certain exceptions.
- Champion will be restricted from transferring securities of Fancamp for
a period of six years following the closing date of the Private
Placement, subject to certain exceptions, and transfers subsequent to
that period will be subject to further restrictions.
Waiver of Right Highlights
- Champion currently has a right to buy-down the Royalty from 3% to 2% on
payment of $3,000,000. Fancamp holds a 50% interest in the Royalty.
Champion will irrevocably waive the right to buy-down one-third
(representinga 0.5% royalty interest) of Fancamp's 50% interest in the
Royalty in consideration of the issuance of 8,000,000 common shares of
Fancamp. Champion will retain the remaining right to buy-down the
Royalty from 3.0% to 2.5%.
The transactions remain subject to several conditions, being (i) the
satisfactory completion of due diligence by each of Champion and Fancamp,
(ii) the negotiation and execution of mutually satisfactory definitive
agreements, and (iii) the receipt of all necessary approvals, including the
approval of the Toronto Stock Exchange for Champion and of the TSX Venture
Exchange for Fancamp. It is anticipated that the closing will take place
on or about May 10, 2012.
About Champion Minerals Inc.
Champion Minerals is an iron ore exploration and development company with
offices in Montreal and Toronto, and is focused on developing its
significant iron ore resources in the provinces of Québec and Newfoundland
and Labrador. The Company's projects include: the Fermont Projects in
Québec; and the Attikamagen Iron Property in Québec and Labrador.
Champion's Fermont Projects, including the flagship Fire Lake North
Project, are located in Canada's major iron ore producing district, in
close proximity to three producing mines. Champion's team and advisory
board includes mining and exploration professionals with substantial iron
ore expertise to effectively advance the Fire Lake North Project into
production.
Please visit Champion's website at www.championminerals.com. For further
information about Champion, please contact Thomas G. Larsen, President and
CEO, and Jorge Estepa, Vice-President, at (416) 866-2200.
About Fancamp Exploration Ltd.
Fancamp Exploration Ltd. is a Canadian exploration company with an
exceptional inventory of resource projects in various stages of
development, acquired usually by staking, with the Company adding value
through exploration and includes the following commodities; hematite
magnetite iron formations, titaniferous magnetite and hematite,
nickel/copper/PGM, chromite, VMS and gold.
Please visit Fancamp's website at www.fancampexplorationltd.ca. For
further information about Fancamp, please contact Peter H. Smith, Ph.D.,
P.Eng., President, at 514-481-3172 or Michael D'Amico, Bay Street Connect
Investor Relations, at 647-500-6023 (michael(at)baystreetconnect.com).
The statements made in this news 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.
This news release includes certain information that may constitute
'forward-looking information' under applicable Canadian securities
legislation. Forward-looking information includes, but is not limited to,
statements about the Acquisition, Private Placement, Royalty Waiver and
other aspects of the letter of intent. Forward-looking information is
necessarily based upon a number of estimates and assumptions that, while
considered reasonable, are subject to known and unknown risks,
uncertainties, and other factors which may cause the actual results and
future events to differ materially from those expressed or implied by such
forward-looking information, including the risks identified in the
companies' annual information forms, management discussion and analysis and
other securities regulatory filings by the companies on sedar (including
under the heading 'Risk Factors' therein). 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. All forward-looking information
contained in this press release is given as of the date hereof and is based
upon the opinions and estimates of management of the companies and
information available to management as at the date hereof. Each of the
companies disclaims any intention or obligation to update or revise any
forward-looking information, whether as a result of new information, future
events or otherwise, except as required by law.
This press release has been prepared jointly by Champion Minerals Inc. and
Fancamp Exploration Ltd. and no regulatory authority has approved or
disapproved the information contained herein.
End of Corporate News
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