Australia-based Champion Iron announced that the Supreme Court of Newfoundland and Labrador has approved its acquisition of the mining properties of the Kamistiatusset iron ore project (Kami project) from Deloitte Restructuring.

Kami Project is located in the Labrador Trough geological belt in southwestern Newfoundland, near the Québec border.

Deloitte Restructuring is serving as receiver for Alderon Iron Ore and certain of its affiliates for the transaction.

Under the terms of the acquisition, Champion will acquire the assets for a total consideration of $15m ($11.5m) in cash, along with extinguishment of around $19.4m in secured debt of Alderon.

Also, the company has agreed to make a finite production payment on a fixed amount of future iron ore concentrate production from the Kami project.

Kami project located near Champion’s operating Bloom Lake mine

The Kami project is a high-grade iron ore project located few kilometres south east of the company’s operating Bloom Lake mine. The previous owner of the project completed an updated feasibility study in September 2018.

Following the completion of the acquisition, the company is expected to revise the project’s scope and update its feasibility study in the near term.

The transaction is expected to be closed in the fourth quarter 2020, and is subject to the permission of the Ministry of Industry, Energy and Technology of Newfoundland and Labrador, along with other customary closing conditions.

Champion CEO David Cataford said: “While our Company is rapidly gaining global recognition for its ability to deliver quality iron ore products, the acquisition would further position our company to service the rising demand for high-grade iron ore concentrate globally.

“With our proven ability to transform opportunities into valuable assets for our shareholders, the Acquisition would add to our portfolio a highly prospective project, which is near existing infrastructure.

“With our focus on respecting the land that we exploit, we look forward to evaluating the potential of this property and working with the local communities in our continued effort to positively contribute to this region.”