Cham­pion gets loan to re­open Que­bec’s Bloom Lake iron mine

The Guardian (Charlottetown) - - BUSINESS -

MON­TREAL — Ef­forts to restart the idled Bloom Lake iron ore mine got a boost Thurs­day after the Caisse de de­pot pen­sion fund man­ager and a min­ing lend­ing group agreed to pro­vide US$180 mil­lion in debt fi­nanc­ing to a sub­sidiary of Cham­pion Iron Ltd. (TSX:CIA).

The Caisse will pro­vide US$100 mil­lion in sub­or­di­nated debt par­tially tied to the price of iron ore while Sprott Re­source Lend­ing will pro­vide US$80 mil­lion in the form of a five-year se­nior se­cured loan.

The iron ore mine in the Labrador Trough near Fer­mont, Que., is ex­pected to re­open as early as the first quar­ter of next year. It shut­tered in late 2014.

The Caisse said the deal is aligned with its strat­egy to sup­port Que­bec min­ing com­pa­nies.

Que­bec’s in­vest­ment agency helped Cham­pion’s Que­bec Iron Ore Inc. sub­sidiary to pur­chase the Bloom Lake mine and a re­gional rail­way last year from an af­fil­i­ate of Cliffs Nat­u­ral Re­sources (NYSE:CLF) that was placed into cred­i­tor pro­tec­tion after ore prices tum­bled.

A fund man­aged by In­vestisse­ment Que­bec, which owns 36.8 per cent of the sub­sidiary, has signed a let­ter of in­tent to pro­vide C$27 mil­lion to sup­port the re­sump­tion of op­er­a­tions. Cham­pion will is­sue eq­uity to raise its C$45mil­lion con­tri­bu­tion, sub­ject to share­holder ap­proval Aug. 18.

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