19:03:36 EDT Thu 28 Mar 2024
Enter Symbol
or Name
USA
CA



Champion Iron Ltd
Symbol CIA
Shares Issued 387,084,339
Close 2017-09-07 C$ 1.00
Market Cap C$ 387,084,339
Recent Sedar Documents

Champion Iron releases terms of $20M receipt offering

2017-09-07 21:11 ET - News Release

Mr. Michael O'Keeffe reports

CHAMPION ANNOUNCES TERMS OF PREVIOUSLY ANNOUNCED OFFERING OF SUBSCRIPTION RECEIPTS

Further to the announcements on Aug. 1, 2017, and Aug. 28, 2017, that Champion Iron Ltd. intended to proceed with a public offering of subscription receipts for gross proceeds of up to $20-million, Champion Iron has entered into an underwriting and agency agreement with a syndicate of dealers led by RBC Capital Markets, as sole bookrunner, and Sprott Capital Partners, as co-lead dealer, that includes BMO Capital Markets, National Bank Financial Inc., Scotia Capital Inc., Desjardins Capital Markets and Macquarie Capital Markets Canada Ltd., to offer 22,222,223 subscription receipts at a price of 90 cents per subscription receipt, for gross proceeds to the corporation of approximately $20-million.

As previously announced, the corporation recently secured a conditional financing commitment of $25-million (U.S.) (approximately $31-million (Canadian)) from Glencore International AG for the non-brokered sale of a subordinated unsecured mandatory convertible debenture on a private placement basis. As a result, Champion had announced its intention to reduce the expected size of the offering to approximately $20-million.

Each subscription receipt will entitle the holder thereof to receive, without any further action on the part of the holder thereof or payment of any additional consideration, one ordinary share of the corporation, subject to the satisfaction or waiver of certain conditions and provided that a termination event has not occurred.

As previously announced on July 13, 2017, Aug. 1, 2017, and Aug. 28, 2017, Quebec Iron Ore Inc. (QIO), a subsidiary of the corporation, has received conditional commitments of S$180-million (U.S.) to partially finance the costs of resuming the operations of the Bloom Lake iron ore mine. One of the conditions of the QIO debt financing requires the corporation and QIO to secure all financing requirements for the Bloom Lake restart. In connection therewith, QIO's equity shareholders, namely Champion and Ressources Quebec Inc., are required to contribute financially to support the resumption of operations at Bloom Lake by making capital contributions to QIO of approximately $44.8-million and $26.2-million, respectively. The corporation intends to use the proceeds from the sale of the debenture, as well as the net proceeds of the offering, to make such capital contribution to QIO, further to which any remaining amount received from the offering and the sale of the debenture would be used for general corporate purposes.

The net proceeds of the offering will be held in escrow, and upon the satisfaction or waiver of certain conditions being: (a) the execution of definitive documentation in connection with the QIO debt financing and the satisfaction or waiver of all conditions precedent to the availability of the funds thereunder (other than such conditions precedent, which, by their nature, are to be satisfied upon closing of the QIO debt financing or upon satisfaction or waiver of the escrow release conditions); and (b) the financing of the capital contribution of Ressources Quebec Inc., the net proceeds will be released to the corporation and holders of the subscription receipts will be entitled to receive, without payment of additional consideration or taking of further action, one ordinary share of Champion for each subscription receipt held. If these conditions have not been satisfied or waived by Oct. 16, 2017, or if any of the parties to the QIO debt financing decides not to proceed with the QIO debt financing, then the subscription receipts shall be automatically cancelled, and the escrow agent shall remit to holders of the subscription receipts an amount equal to the original purchase price plus accrued interest.

The Toronto Stock Exchange has conditionally approved the listing of the subscription receipts and of the underlying shares. The corporation will also apply for quotation of the underlying shares on the Australian Securities Exchange.

The corporation intends to file a final short-form prospectus on Sept. 7, 2017. The offering is being made in all the provinces of Canada. Subject to applicable law and the provisions of the underwriting and agency agreement, the dealers may offer the subscription receipts outside of Canada, including in the United States, in reliance on applicable private placement exemptions under U.S. federal and state securities laws. If an offering is made in Australia, it will only be made to professional investors or sophisticated investors (as those terms are defined by Section 708 (8) and (11) of the Corporations Act) or other investors in Australia to whom securities can be issued without a disclosure document being required by the Corporations Act. Closing of the offering is expected to take place on or around Sept. 18, 2017.

The corporation anticipates that certain related parties of the corporation will participate in the offering. Participation of such related parties in the offering will constitute a related-party transaction as defined under Multilateral Instrument 61-101 (Protection of Minority Securityholders in Special Transactions). The corporation expects that the offering will be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of securities being issued to insiders, nor the consideration being paid by insiders, will exceed 25 per cent of the corporation's market capitalization. None of the corporation's directors have expressed any contrary views or disagreements with respect to the foregoing.

About Champion Iron Ltd.

Champion is an iron development and exploration company, focused on developing its significant iron resources in the south end of the Labrador Trough in the province of Quebec. Following the acquisition of its flagship asset, the Bloom Lake iron ore property, the corporation's main focus is to implement upgrades to the mine and processing infrastructure it now owns while also advancing projects associated with improving access to global iron markets, including rail and port infrastructure initiatives with government and other key industry and community stakeholders.

Champion's management team includes professionals with mine development and operations expertise, who also have vast experience from geotechnical work to greenfield development, brownfield management, including logistics development and financing of all stages in the mining industry.

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