Champion Iron Limited (TSX: CIA) (ASX: CIA) ("Champion" or the "Company") announced that its subsidiary Québec Iron Ore Inc. ("QIO"), the operator of the Bloom Lake mining complex ("Bloom Lake"), has received commitments from its current credit facility syndicate members to amend and increase its existing credit facilities (the "Credit Facility") from US$200 million to US$400 million (the "Refinancing"). Concurrently with this commitment, the Company's Board of Directors (the "Board") has provided final approval to complete the Bloom Lake Phase II expansion project (the "Phase II"), which aims to double the nameplate capacity of Bloom Lake to 15 Mtpa of high-grade iron ore concentrate. The Company expects to fully fund the Phase II project with the additional proceeds from the amended Credit Facility, its $425.8 million cash on hand1 and ongoing cash flows from operations.

"Today's announcement is a major milestone for our Company, our employees and the local communities", commented David Cataford, Champion's CEO. "With our high-grade iron ore in rising demand globally, a proven operational team and a conservative financial solution to fund the remaining construction of the Phase II project, our Company is well positioned to double Bloom Lake's nameplate capacity. We are also proud and excited to build on our positive impact to the region with the expected creation of approximately 375 permanent new jobs upon the completion of the Phase II project."

With the Phase II project already benefitting from substantial capital investments, and pursuant to the strong economics outlined in the Phase II Feasibility Study filed on August 2, 2019 (the "Feasibility Study"), the Company's Board, to date, has approved a cumulative budget of $120 million in order to advance and de-risk the project. To further advance the Phase II construction ahead of the anticipated closing of the amended Credit Facility, the Board approved an additional US$75 million budget. Based on the amounts detailed in the Feasibility Study, as of September 30, 2020, the remaining capital expenditures required to complete the Phase II project is estimated at $512.6 million, including contingencies. The Phase II project has a current estimated completion timeline of 18 months.

The amended Credit Facility is committed by Societe Generale (Coordinating Bank, Joint Lead Arranger and Joint Bookrunner), with Toronto-Dominion Bank, Royal Bank of Canada, and The Bank of Nova Scotia (all acting as Joint Lead Arrangers and Joint Bookrunners), with the inclusion of the Bank of China, Fédération des caisse Desjardins du Québec and Investissement Québec ("The Syndicated Group"). Upon completion and execution of the final loan documentation, the Credit Facility will be available by way of a US$350 million term loan (the "Term Facility") and a US$50 million revolving facility (the "Revolving Facility"). The Term Facility will mature five years from the closing date and shall be repaid in equal quarterly installments of principal and accrued interest starting on the first quarter following the completion of the Phase II construction. The Revolving Facility will mature three years from closing. The Credit Facility will bear interest at LIBOR plus 4.00% pre-completion, after which the Credit Facility will revert to the original interest rate based on leverage ratios ranging between LIBOR plus 2.85% if the net debt to EBITDA ratio is lower or equal to 1.00x to LIBOR plus 3.75% if the net debt to EBITDA ratio is greater than 2.50x. The Credit Facility will include standard and customary finance terms and conditions, including with respect to fees, representations, warranties, covenants and conditions precedent to closing. Closing of the transaction is subject to remaining customary due diligence and definitive loan documentation, and is expected before the end of December 2020.

All amounts stated in this news release are in Canadian dollars unless otherwise indicated

Qualified Person and data verification

The Company is not aware of any new information or data that materially affects the information included in the Feasibility Study and confirms that all material assumptions and technical parameters underpinning the estimates in the Feasibility Study continue to apply and have not materially changed.

Mr. François Lavoie (P. Eng.), Technical Marketing Manager at the Company is a "qualified person" as defined by National Instrument 43-101 and has reviewed and verified the scientific and technical information contained in this press release. Mr. Lavoie's review and approval does not include statements as to the Company's knowledge or awareness of new information or data or any material changes to the material assumptions and technical parameters underpinning the Feasibility Study.

About Champion Iron Limited

The Company, through its subsidiary Quebec Iron Ore Inc., owns and operates the Bloom Lake Mining Complex, located on the south end of the Labrador Trough, approximately 13 km North of Fermont, Québec, adjacent to established iron ore producers. Bloom Lake is an open-pit truck and shovel operation with a concentrator, and it ships iron concentrate from the site by rail, initially on the Bloom Lake Railway, to a ship loading port in Sept-Îles, Québec. The Bloom Lake Phase I plant has a nameplate capacity of 7.4M tpa and produces a high-grade 66.2% Fe iron ore concentrate with low contaminant levels, which has proven to attract a premium to the Platts IODEX 62% Fe iron ore benchmark. In addition to the partially completed Bloom Lake Phase II expansion project, Champion also controls a portfolio of exploration and development projects in the Labrador Trough, including the Fire Lake North iron ore project, located approximately 40 km south of Bloom Lake. The Company also owns 100% of the Gullbridge-Powderhorn property located in Northern Central Newfoundland. The Company sells its iron ore concentrate globally, including to customers in China, Japan, the Middle East, Europe, South Korea and India.

Source: Champion Iron Limited