TSX- and ASX-listed Champion Iron on Thursday announced positive results from its Phase 2 feasibility study for the Bloom Lake mining complex, in Quebec.
The study envisioned further exploiting Bloom Lake, which would increase overall capacity from 7.4-million tonnes a year to 15-million tonnes a year of 66.2% iron-ore concentrate, for a 20-year mine life.
Champion’s study determined an after-tax net present value of $1.8-billion combining Phase 1 and Phase 2, with an internal rate of return of 33.4% and a 2.4 year payback period.
Initial capital required to expand Bloom Lake was determined to be $446-million and the construction period would be 21 months.
CEO David Cataford noted in a statement that the study was a positive outcome for Champion as Phase 2 would further position the company as one of the largest high-grade iron-ore producers in the world.
“Based on conservative assumptions, compared to the current spot price of $83/t, the Phase 2 feasibility study demonstrated that this expansion at Bloom Lake may drive additional value to shareholders and allow the company to continue on its growth trajectory.
“Consistent with our commitment to offer accretive growth, while managing dilution, we are approaching the project diligently by advancing key long-lead time items and will look at optimal sources of capital to further advance the project in due time.”
The feasibility study, conducted by BBA Incorporated, evaluated the life-of-mine option for expanded mining and processing, to maximise the value of the mineral resource at Bloom Lake. The study evaluated the combined Phase 1 and Phase 2 mining plan, current concentrator plant at Phase 1 and completion of the Phase 2 concentrator plant.
The company’s board had approved an initial budget of $68-million to advance the project during the remainder of the year.
Champion further noted that the Phase 2 mine plan continued with a conventional surface mining method. Electric hydraulic shovels would be complemented with front-end loaders to allow a flexible mine plan. Additional drilling and hauling capacity would be added as mine tonnages increase from January 2021.