TORONTO, ONTARIO--(Marketwire - Dec. 11, 2012) - CHAMPION IRON MINES LIMITED (TSX:CHM)(OTCQX:CPMNF)(FRANKFURT:P02) ("Champion") is pleased to announce the execution of a definitive agreement with Northfield Metals Inc. ("Northfield") in respect of its previously announced agreement whereby Northfield has been granted an option to earn a 65% interest in seven iron-rich mineral concessions, which Champion calls "Cluster 3", totaling approximately 220 km2 in the southern Labrador Trough, Fermont Iron Ore District of northeastern Québec. Pursuant to the definitive agreement, Northfield issued 1,000,000 common shares to Champion. In connection with the definitive agreement, Champion also completed a concurrent private placement, purchasing 2,000,000 Northfield common shares at a price of $0.25 per share for cash proceeds of $500,000 and acquiring an additional 568,000 Northfield common shares also at a price of $0.25 per share in settlement of outstanding loans made to Northfield. All of the common shares issued by Northfield in these transactions are subject to a four (4) month hold period.
In connection with these transactions, the two companies signed a Pre-emptive Rights Agreement whereby Northfield granted Champion the right to participate in Northfield's private placements over a period of approximately two (2) years expiring December 31, 2014, thereby giving Champion the opportunity to maintain its proportionate interest in outstanding shares of Northfield. Champion also reserved the right and option to participate in Northfield private placements to increase Champion's holdings of Northfield shares up to 38%, which right and option will expire on June 30, 2013 or such later date when Northfield has at least 30,000,000 shares outstanding. The two companies also signed a Board Representation and Standstill Agreement whereby, for a period of approximately five (5) years expiring December 31, 2017, Champion will have the right to nominate one director to Northfield's Board of Directors and will be restricted from voting in certain circumstances, including not voting against the election of any nominee to the Board of Directors proposed by Northfield or against any resolutions supported by Northfield's Board of Directors, subject to certain exceptions. The agreement also provides for restrictions on sales of Northfield shares by Champion without Northfield's consent for a period of approximately five years expiring December 31, 2017 and then limited monthly sales thereafter.
Champion has acquired the Northfield common shares in these transactions for investment purposes and has reserved the right to acquire additional securities of Northfield as described above. Depending upon its evaluation of the business, prospects and financial condition of Northfield, the market for Northfield's securities, general economic and tax conditions and other factors, Champion may acquire more securities of Northfield and, subject to the limitations on transfer set forth above, may sell its holdings of Northfield securities. Following these transactions, Champion holds 3,568,000 common shares of Northfield, representing approximately 19.36% of the issued and outstanding shares. Further details regarding the early warning report may be obtained from the Early Warning Report filed in respect of these transactions under Northfield's profile on www.sedar.com.
Champion is an iron ore exploration and development company with offices in Montreal and Toronto, and is focused on developing its significant iron ore resources in the provinces of Québec and Newfoundland and Labrador. The Company's projects include: the Fermont Projects in Québec; and the Attikamagen Iron Property in Québec and Labrador. The Fermont Projects, including Champion's flagship Fire Lake North Project, are located in Canada's major iron ore producing district, in close proximity to three producing mines. Champion's team and advisory board includes mining and exploration professionals with substantial iron ore expertise to effectively advance the Fire Lake North Project into production.
Please visit Champion's website at www.championironmines.com. For further information about Champion or to request a copy of the Early Warning Report, please contact Thomas G. Larsen, President and CEO, and Jorge Estepa, Vice-President, at (416) 866-2200, or at Champion's head office at 20 Adelaide Street East, Suite 301, Toronto, Ontario.
The statements made in this news release that are not historical facts are "forward-looking statements" and readers are cautioned that any such statements are not guarantees of future performance, and that actual developments or results, may vary materially from those in these "forward-looking" statements.
This news release includes certain information that may constitute "forward-looking information" under applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements about the acquisition, private placement and Champion's intentions with respect to the Northfield securities. Forward-looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information, including the risks identified in the companies' annual information forms, management discussion and analysis and other securities regulatory filings by the companies on SEDAR (including under the heading "Risk Factors" therein). There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking information. Accordingly, readers should not place undue reliance on forward-looking information. All forward-looking information contained in this press release is given as of the date hereof and is based upon the opinions and estimates of management and information available to management as at the date hereof. Champion disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
This press release has been prepared by Champion Iron Mines Limited and no regulatory authority has approved or disapproved the information contained herein.