Mamba Minerals (ASX:MAB) on Friday announced that it will merge with Champion Iron Mines (TSX:CHM), a Canadian iron ore developer with properties in the Labrador Trough. The new company will be named Champion Iron Limited and will list on the Australian Securities Exchange.
Under the deal, Champion shareholders will receive 11 Mamba shares for every 15 Champion shares.
Champion’s major asset is the Consolidated Fire Lake North project, on which a prefeasibility study released earlier this year showed production potential of 9.3 million tonnes per annum and a net present value of $3.3 billion.
The two companies aim to progress Consolidated Fire Lake North to a bankable feasibility study, a process that is expected to take a year.
As quoted in the press release:
Mamba Chairman Michael O’Keeffe said: “The merger is an exciting prospect for shareholders of both companies. We believe there is significant potential to commence production at Champion’s main project Fire Lake over the next few years. Under the new board and with the joint resources now available, Mamba is in an excellent position to deliver this”.
“Significantly, the region is already developed to service major producers in terms of rail and port infrastructure. Fire Lake is adjacent to an ArcelorMittal operating mine producing around 1.6Mtpa and within 70km of 45Mtpa of production from IOC/RIO, Cliffs and ArcelorMittal. Strategically, Fire Lake location is well positioned for an emerging iron ore company,” Mr O’Keeffe said.