champion minerals corporate presentation march 30, 2012
TRANSCRIPT
Building the Next Major Iron Ore
Mine in the Labrador Trough Corporate Presentation
April, 2012
FSE: P02
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FORWARD-LOOKING STATEMENTS
Certain information contained herein regarding Champion Minerals Inc., including
management’s assessment of future plans and operations, may constitute forward-looking
statements under applicable securities law and necessarily involve risks, including but not
limited to risks associated with mining exploration, operating costs, production costs, volatility
of share prices, currency fluctuations, imprecision of resource and reserve estimates,
environmental risks and ability to access sufficient capital from internal and external sources.
As a consequence, actual results may differ materially from those anticipated in any forward
looking statements. Plans, intentions or expectations disclosed in any forward-looking
statements or information should not be read as guarantees of future results or events, and will
not necessarily be accurate indications of whether or when or by which such results or events
will be achieved.
Except as required by law, Champion Minerals Inc., expressly disclaims any intention and
undertakes no obligation to update any forward looking statements or information as conditions
change.
The historical mineral resources mentioned are strictly historical in nature and are non-
compliant to National Instrument 43-101 mineral resources and mineral reserves standards,
and should therefore not be relied upon. A qualified person has not done sufficient work to
upgrade or classify the historical mineral resources as current National Instrument NI-43-101
compliant.
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Fermont Projects (710 km2)
17 properties in the Fermont Quebec mining camp
Flagship Fire Lake North Project-currently in the
Feasibility stage
Over 2.8 billion tonnes of NI 43-101 compliant iron
mineral resource estimates on 4 of 17 projects
82.5% direct interest, 3% NSR (C$3 million buyback for
an additional 1% NSR)*
Attikamagen Property (310 km2)
Champion Minerals holds a 49% interest
Century Iron Mines Corp. (51% interest) has
option to earn up to a 60% interest
in the property by funding a further $5.5 million in
exploration expenditures by May 2014**
Advanced iron ore exploration and development projects located in
Canada’s principal iron ore district, the Labrador Trough
About Champion Minerals
* Fancamp Exploration Ltd. holds remaining 17.5% interest
** CHM 49% / Century Iron Ore Mines 51%; Investment by WISCO of 25% ($60M) and Minmetals of 5% ($12M)
Quebec’s Next
Major Iron Ore Mine
Fire Lake North (FLN) Development Project
Nov. 21 2011 PEA indicates ability to produce 8.7 million tonnes of
concentrate per annum for the first 25 years of a 40-year mine life the first
5 years will average approximately 10 million tonnes of concentrate per annum
Net Present Value of $4 billion at a discounted cash flow rate of 8% with an
Internal Rate of Return of 41.5% and a payback period of 2.3 years
Established Iron Ore District
Canada produces 44 mtpy of iron ore concentrate in the southern end of the
Labrador Trough this is expected to grow to 200 mtpy over the next 10 years if
all proposed development projects are realized.
Established rail, power and port infrastructure
- Quebec’s Plan Nord: $80 billion investment over the next 25 years in
northern Quebec for various projects including infrastructure projects
- Competitive power rates: ~ $0.04 - $0.045; price to be negotiated in 2012
- Initiative for world-class port facilities underway
Proven Team
Strengthened advisory board and board of directors includes former
Consolidated Thompson Iron Mines management and officers
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Capital Structure
Share Data and Cash Position as of March 30, 2012.
Shares Outstanding 105.2 million
Warrants 5.2 million @ C$1.57
(22,260 @ C$1.15 expiring 04/30/2012
2.16 million @ C$1.50 expiring 04/2012
2.22 million @ C$1.50 expiring 10/2013, which are owned
by insiders and advisors.)
Options 12.0 million @ C$1.04
Fully Diluted Shares Outstanding 122.6 million
Market Capitalization
(based on $1.98 share price)
C$176.8 million
Cash Position C$41.4 million
Fully Diluted Cash Position C$62.0 million
Management Ownership ~ 7%
Analyst Coverage Canaccord Genuity
Desjardins Capital Markets
Fraser Mackenzie
Haywood Securities
Jennings Capital
Macquarie Capital Markets
Paradigm Capital
Raymond James
RBC Capital Markets
Salman Partners
Stifel Nicolaus
TD Securities
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Experienced Management Team
Board of Directors Management Team
Tom Larsen
Chairman
Tom Larsen
President and CEO
Alexander Horvath, P.Eng.
Director
Alexander Horvath, P.Eng.
Executive Vice President, Exploration
Jean Depatie, P.Geo.
Director
Martin Bourgoin, P. Geo.
Executive Vice President, Operations
Ashwath Mehra
Director
Jeff Hussey, P.Geo.
Executive Vice President, Development
Donald A. Sheldon, LLB., P.Eng.
Director
Bruce Mitton, P.Geo.
Vice President, Exploration
Paul Ankcorn
Director
Jean-Luc Chouinard, P.Eng.
Director of Projects
Francis Sauve
Director
Miles Nagamatsu, CA
Chief Financial Officer
Joseph S. C. Chan
Director
Jorge Estepa
Vice President, Secretary-Treasurer
Richard Quesnel: Senior Technical Advisor and Head of the Advisory Board
Advisory Board: Richard Quesnel, Mick McMullen, and Doug Bache
Project Finance Advisor: Marc Duchesne 6
Over 200 years of combined exploration and mine operations experience
Why invest in Champion Minerals?
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Favourable Operating
Environment
• Established iron ore
mining district the
Labrador Trough
• Favourable tax
environment
(40% tax rebate on
exploration expenditures)
• Access to low-cost power
and close to rail and port
infrastructure
• Quebec`s Plan Nord
$80 billion over the next
25 years
• Quebec is known to be a
world class area to
develop mines
• Unprecedented Iron Ore
Price Range and Forecast
• Skilled Labor Work Force
Champion Minerals’
Competitive Advantage
• Fermont: 17 iron ore
(710 km2) brownfield
projects
• Feasibility Stage Fire
Lake North Surface
Deposits contain
coarse grained
specular hematite
Easier to liberate
Deleterious elements
are below industry
specifications limits
• Experienced team of
project developers and
mine builders
• Upside Potential for
Growth
• Several De-Risking
Initiatives Underway
8 8
Three Ports/
Stockpile
Locations
Cartier
Private
Rail
QNS&L
Rail
Common
Carrier
Cluster 3
Cluster 2
High
Voltage
Power
Lines
Gulf of St Lawrence
Rail Infrastructure
Quebec North Shore & Labrador Railway (“QNS&L”)
QNS&L links to Sept-Iles and Pointe Noire
Bloom Lake and QNS&L railways are considered common carriers
Common carriers allocate capacity on a first-come, first-serve basis
Fire Lake North PEA Base Case connection to Bloom Lake railway requires 94 km of rail – includes turnaround loop and sidings
Participation in a private multi user rail solution as an alternative transportation / haulage option is also under study
Cartier Railway: Linked to Port-Cartier
Privately owned by ArcelorMittal
Adjacent to the west of Fire Lake North Proj.
Cluster 1
Attikamagen
Fermont
9 9
Multi-User Port Infrastructure Expanding to Meet Demand
Pointe Noire Multi User Port
Federal Government announced $55 million funding or 25% of project
Completion March 31st 2014
Phase 1: 50Mtpy $220 million
Phase 2: Planning for 100 Mtpy
Cliffs Resources shipping facility
Port of Sept-Iles
RTZ-IOC shipping facility
Port-Cartier
ArcelorMittal shipping facility
$2.1B expansion is underway and will include concentrator expansion with port and rail infrastructure upgrades
Located 62 km west of Sept-Iles
Pointe Noire
Sept-Iles
Courtesy of the Port de Sept Isles
China Max ship capacity 300kt
Development: Fire Lake North Project
Oil Can Project 6 km
from FLN Concentrator
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Preliminary Economic Assessment
indicates a production rate of 8.7 million
tonnes of concentrate per annum for the
first 25 years of a 40-year mine life, average
of approximately 10 million tonnes of
concentrate per annum for the first 5 years
(released November, 2011).
Net Present Value of $4 billion at a
discounted cash flow rate of 8% with an
Internal Rate of Return of 41.5% and a
payback period of 2.3 years.
Mineral Resource Estimate: October 6, 2011
Measured and Indicated Resources of 400.1 million tonnes grading 30.6% total iron
Inferred Resources of 661.2 million
tonnes grading 27.7% total iron
Feasibility Study underway with several de-risking initiatives ongoing
Fire Lake North Project Growth through Development
12 See www.championminerals.com for reports maps and assays
13 High Grade - Coarse Specular Hematite Typical Quartz-Specular
Hematite-Magnetite Mineralization
Fire Lake North - Metallurgy
Coarser grained: At 600 - 700 micron liberation grind size the SiO2 content is
very low (3-4%) allowing for optimization; 2nd Phase tests underway
SPI tests indicate a relatively softer ore; 2nd Phase of tests underway
Current Mill Design: Gravity separation
Deposits of quartz specularite iron ore are typical of the Fermont area
− Coarse liberation grind size; product will be sold as “Sinter Fines”
− 80% of the global iron ore market seeks this product
− Low deleterious elemental levels will help to secure market share
Fire Lake North Development Project
14 14
Fire Lake North Development Project
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Based upon the following assumptions:
Key Results Pre-Tax Basis
Internal Rate of Return (IRR) (8% Discount Rate) 41.5%
Undiscounted Cash Flow US$10.9B
Net Present Value @ 5% Discounted Cash Flow US$5.6B
Net Present Value @ 8% Discounted Cash Flow US$4.0B
Net Present Value @ 10% Discounted Cash Flow US$3.2B
Payback Period (8% Discount Rate) 2.3 Years
Capital Costs:
Operating Costs:
Price assumptions:
Mine-Life:
Exchange rate:
Total Resources(1):
In Pit Resources
US$1,368 million (includes rail and port infrastructure)
US$51.01 per tonne (average 25 years);
US$39.46 per tonne (average years 1 to 5)
US$115 per tonne of concentrate at 65% Fe
40 years (average of 8.7 million tonnes/year for the first 25 years)
$1.00 USD to $1.00 CDN
400 million tonnes grading 30.6% Fe (NI43-101 Measured and Indicated Resources)
661 million tonnes grading 27.7% Fe (NI43-101 Inferred Resources)
921.8 million tonnes grading 28.8% Fe at an 8% cut-off grade
Fire Lake North Development Project November 2011 Preliminary Economic Assessment Update – Highlights
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OPERATING EXPENDITURES (US$/TONNE OF CONCENTRATE)
COST PARAMETERS AVERAGE 25 YEARS AVERAGE YEARS 1 TO 5
Mining 22.56 12.13
Concentrating, crushing and processing 4.52 3.97
Site infrastructure, sales and general administration 4.40 3.39
Environmental tailings and management 0.29 0.26
Rail transport 15.52 16.14
Port facilities 3.72 3.57
Total 51.01 39.46
Equipment Lease Cost (not included in above total) 1.67 5.17
Fire Lake North Project Preliminary Economic Assessment Study
CAPITAL EXPENDITURES (US$ MILLIONS)
COST CENTRES $ MILLIONS
Pre-stripping of open pit areas 97.5
Concentrator and site infrastructure including loadout facilities 682.3
Railway (62km distance and 94km total including turnaround loop and sidings) 228.8
Port Facilities: Railcar unloading, stacker/reclaimer, conveyors 96.8
Environmental and Tailings Management 27.9
Other Pre Production Costs 34.0
Sub-total 1,167
Contingency 201
Total 1,368
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Fire Lake North Project Schedule Development, Construction, and Production
Diamond Drilling
Scoping Study
Feasibility Study
Environmental / Social Studies
Community Consultation
Permitting
Construction
Production
Q2 Q3 Q4
2014 2015
Q1 Q2 Q3 Q4
2013
Q1 Q2 Q3 Q4 Q1
2011 2012
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
500
meters
Moire Lake Project Initial Mineral Resource Estimate: March 29, 2012
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Arc
elo
r Mitta
l Pro
pe
rty B
ou
ndary
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Mineral Resource Estimate:
Indicated Resources -164 million
tonnes grading 30.5% Total Iron
Inferred Resources - 417 million
tonnes grading 29.4% Total Iron
DDH LM11-12: 503 m @ 31% total iron
Kilometric Synform with Hematite and
Magnetite outcrops at surface
Adjacent to ArcelorMittal Mont Wright Mine
A
A’
500
meters
Moire Lake Project Infrastructure: Adjacent to rail (8km), road, and power
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Oil Can Project Exploration Upside
The 2011 drill program returned long magnetite-hematite iron formation up
to 546 metres in length
The 400 metre spaced drill program is now complete, Mineral Resource
Estimate Q1 2012
SELECTED* COMPOSITE ASSAY RESULTS
HOLE-ID HOLE LENGTH AZIMUTH DIP FROM TO INTERVAL** GRADE***
metres degrees degrees metres metres metres Total Fe%
OC11-02 594 310 -45 188.53 590.03 401.50 30.7
including 246.86 460.40 213.54 33.1
OC11-05 545.00 020 -45 241.56 545.00 303.44 34.7
including 407.24 538.00 130.76 36.5
OC11-08 616.00 180 -50 67.00 612.73 545.73 33.7
Including 67.00 509.34 442.34 36.4
* Selected Composite Assay Results are stated only for results recently received. The Selected Composites are
not necessarily representative of the average grade or thickness of the mineral zones or potential resource.
** Intervals are down-hole lengths and not true widths of the mineral zones.
*** Grades are calculated from Total Fe% sample assays completed by ALS Chemex Laboratories using the
“High Grade/Ores Method” and XRF analysis.
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Oil Can Project Exploration Upside
To view a larger more detailed version of this map please visit:
http://www.championminerals.com/vns-site/page-oil_can.html
Up to 546m 33.7% total iron
Initial Mineral Resource
Estimate: Q1 2012
Billion tonne potential
Potential for low strip ratio < 1 : 1
Bench width 100- 350m
9800N
5800E
CENTRAL
South & East Zones
Section 9800N (Facing North)
200 metres
OC11-02
IF
IF
Ovb OC11-19 OC11-01
OC11-08 OC11-07
OC11-05 East Zone
South Zone
190.0m @
30.6%
Assay Pending
401.5m @ 30.7%
incl. 213.5 @
33.1%
545.7m @ 33.7%
incl. 442.3 @
36.4%
197.2m @ 26.8%
incl. 145.5 @
28.1%
303.4m @ 34.7%
incl. 130.8m @
36.5%
Oil Can Project Exploration Upside
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Central Zone (Facing Northwest)
200 metres
OC11-10 OC11-03
OC11-16 OC11-14
191.7m @
28.2%
472.2m @ 28.0%
incl. 119.6m @
35.2%
224.0m @ 28.1%
incl. 140.0m @
30.0%
311.4m @ 27.6%
incl. 269.0m @
29.2%
IF
Ovb
Oil Can Project Exploration Upside
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200 metres
North Zone
Section 5800E (Facing East)
OC11-04
472.2m @ 28.0%
incl. 119.6m @
35.2%
IF
Ovb OC11-09
OC11-12 OC11-13 OC11-15
221.2m @ 25.0%
incl. 128.9m @
28.7%
Assays Pending
414.1m @ 25.1%
incl. 139.0m @
29.5%
141.5m @ 29.2%
179.5m @ 32.8%
Oil Can Project Exploration Upside
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Milestones
Fire Lake North Definition Drilling Ongoing
Updated PEA on Fire Lake North Completed
Initial NI 43-101 Mineral Resource Estimate for Oil Can Project
(adjacent to Fire Lake North Project) Q2 2012
Metallurgical results at Fire Lk. North, Moire Lk. & Oil Can Projects Q2 2012
Marketing Study Q3 2012
Fire Lake North Feasibility Study Q3 2012
Fire Lake North Construction Start Q4 2013
Fire Lake North Production 2015
Why Invest in
Champion Minerals?
Fire Lake North NPV: $4 Billion @ 8% DCF
Adjacent Oil Can shows great promise and plans are
underway to develop it; Metallurgical tests underway…
17 Brownfield Projects (710 km2) near 5 operating mines
Experienced Team: Exploration, Development, Construction,
Commissioning, & Operations Management
Financed through to feasibility; Favourable tax environment
Quebec`s Plan Nord
Access to power and close to rail and port
Multi User Port is planned ; Trans-Shipping is an option
Several Railway options are under study
Iron Price Range and Forecasts is Unprecedented
Several De-Risking Initiatives Underway
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Thank You
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Fire Lake North Exploration Camp
Coarse Grained
Specular Hematite
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Exploration Projects
O’Keefe Purdy Project Exploration Upside
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Harvey Tuttle Project NI 43-101 Inferred Resource Estimate:
717Mt @ 25% iron; magnetite rich
Intersected multiple significant iron formation
intervals in 2010 drill program
Total of 13,165m of drilling completed
Less than 50% of the kilometric scale
magnetic anomalies have been tested
Metallurgical tests underway
Located 25 km NW of Fire Lake North
Within conveying distance from Fire Lake
North planned concentrator (20-30km)
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Advanced Exploration
Bellechasse Project
NI 43-101 Inferred Resource Estimate: 215Mt @
29% Iron; Magnetite Rich iron formation
Historical Resources increased from 91Mt
remaining upside potential.
Adjacent to Hwy 389; 10km from Fire Lake North
Synform Geometry is good for Open Pit
Labrador Trough Annual Production Iron Ore Production Upside
Company Current Annual
Production
Projected
Annual Forecast
IOC/RTZ 17 mtpy 26 mtpy1
ArcelorMittal 13 mtpy 24 mtpy2
Cliffs Natural Resources
(Wuhan)
12 mtpy 28 mtpy
Labrador Iron Mines 2 mtpy 5 mtpy
Adriana Resources (Wuhan) 0 50 mtpy
New Millennium (Tata) 0 27 mtpy
Century Iron Mines (Wuhan) 0 ~20 mtpy
Champion Minerals 0 ~18 mtpy
Alderon Iron Ore Corp. 0 ~8 mtpy
Total current and forecasted
production
44 ~ 200 mtpy
1. Possibility of expanding production up to 50 mtpy
2. Possibility of expanding production to 50 mtpy 32
33
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1980 1985 1990 1995 2000 2005 2010
China
Japan
Rest of theWorld
Global Steel Production Shows
Continued Demand for Iron Ore
China’s CAGR* is 9.88% over
the last 30 years vs. 2.30% for
total global steel production
over the same period.
Source: World Steel Association website
* Compound annual growth rate
34
Iron Ore Types
Coarse Grained Specular Hematite
Direct Shipping Ore
Magnetite Rich Taconite
Coarse Grained Specular Hematite
34
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Fermont Iron Ore District
(“FIOD”)
Historically the Fermont and
Labrador Camps have
produced 33 Mta
RTZ/IOC = 17 Mta
ArcelorMittal = 13 Mta
Wabush = 3 Mta
For 30-40 years pre 2003
the price per tonne
concentrate was
$25- $30/ tonne
Current 3 year moving
average is $130/ tonne
2012 Spot Price averaged
~$170/tonne