IRON ORE: Champion spends $30M on rail cars for Bloom Lake restart

QUEBEC – In preparation for the restart of iron ore operations at the Bloom Lake mine near Fermont, Champion Iron has acquired 735 specialized rail cars to haul concentrate to the port at Sept Iles 400 km to the south. A wholly owned subsidiary of the company  paid US$30.1 million to acquire the cars. [caption id="attachment_1003717557" align="alignleft" width="300"] A restart is in the works for the Bloom Lake iron ore mine.[/caption] The deal is with Canadian IronOre Railcar Leasing LP. Champion will make a 6% down payment with the balanced to be financed by a three-year seller note at a rate of LIBOR plus 1.75% per year. Champion chairman and CEO Michael O'Keeffe said in a release, "Owning our own fleet of rail cars will deliver substantial strategic and cost benefits as we bring Bloom Lake back into full-scale production. The acquisition is also a major step towards financing the Bloom Lake restart." The company completed the Bloom Lake feasibility study in February 2017. The 66.2% iron concentrate production is to average 7.4 million t/y over a 21-year mine life. The initial capital expenditure (including working capital) is estimated to be $326.8 million. Operating costs will be $44.62 per tonne of dry concentrate produced. More information about Champion is available at www.ChampionIron.com.