Oil Can Project

Oil Can Deposit

The Fire Lake North property was consolidated in July 2012 with the adjacent Oil Can, Midway and Bellechasse properties into the Consolidated Fire Lake North (CFLN) property, which hosts more than 3.4 billion tonnes of in-pit resources, from all NI 43-101 categories, including a Measured and Indicated resource of 744 million tonnes grading 31.2%, and an Inferred resource of 2.723 billion tonnes grading 28.9%.  Champion completed a Preliminary Feasibility Study (PFS) on the Consolidated Fire Lake North Project in February 2013 that focused on the so-called East Pit and West Pit deposits underlying the pre-consolidation “Fire Lake North” part of the CFLN.

On July 4, 2012, Champion announced the completion of a Mineral Resource Estimate for the deposits comprising the Oil Can project (Table 1).  The Mineral Resource Estimate completed by P&E Mining Consultants Inc. (“P&E) was based on a 19-hole, 8,435 m drilling campaign completed between August 5 and December 11 of 2011.

Table 1: Inferred Mineral Resource Estimate1

Zone Cut-Off Grade Tonnes Grade
FeT% Millions FeT%
Total Oxide 20%+ 969 33.2
15%+ 972 33.2
10%+ 1,355 23.8
Total Mixed 20%+ 788 25.1
15%+ 924 24.1
10%+ 1,027 23.0
Total All 15%+ 1,896 28.7

1The current Mineral Resource Estimate was calculated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions.Mineral resources, which are not mineral reserves, do not have demonstrated economic viability. The mineral resource estimate may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. Furthermore, the quantity and grade of estimated Inferred Resource reported herein are uncertain and there has been insufficient exploration to categorize them as an Indicated or Measured Resource. It is uncertain if further exploration will result in reclassification of Inferred Mineral Resources to the Indicated or Measured Mineral Resource categories. The tonnage numbers are rounded according to NI 43-101 standards. Grades are calculated from Total Fe% (“FeT%”) sample assays completed by ALS Minerals using the “High Grade/Ores Method” XRF analysis.

The Oil Can deposit includes both magnetite-rich oxide-iron formation and a mixed magnetite-silicate iron formation hosted in 5 discrete mineralized zones separated by thrust faults.

P&E utilized a 1:1 C$-US$ exchange rate, a mining cost of $1.90/Tonne and $7.97/Tonne for the processing, G&A, and freight costs. The process recovery, estimated to be 60.0%, and an Iron ore price of $1.77/dmtu were used to complete the Whittle pit optimization with 50 degree overall slopes to estimate the in-situ Mineral Resources. Table 2 presents the results of the in-pit optimization at various cut-off grades and demonstrates the economic sensitivity of the resource estimates by indicating the quantity of the mineral resources that may be potentially economically exploited within the optimized pit shell.

Table 2: In-Pit Optimization Sensitivity Estimate

Zone Cut-Off Grade Tonnes Grade
FeT% Millions FeT%
Total Oxide 20%+ 964 33.3
15%+ 967 33.2
10%+ 967 33.2
Total Mixed 20%+ 781 25.1
15%+ 912 24.1
10%+ 978 23.4
Total All 15% + 1,879 28.8

Champion has completed preliminary metallurgical test work for indications of liberation grind size, recovery, and potential concentrate quality related to developing the Oil Can Mineral Resources. Results from test work at SGS Lakefield Laboratories indicate that a relatively coarse grind and primary magnetic separation would yield a commercial-grade magnetite sinter-feed concentrate. Further metallurgical test work will focus on the oxide-iron resource to evaluate the potential of utilizing secondary gravity separation of the magnetic-tails to recover the specular hematite mineralization that occurs in significant concentrations locally within the South, Central, and North mineralized zones of the deposit.

Consolidated Fire Lake North Project – Oil Can NI 43-101 Resource Report
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