Lac Otelnuk Mining (LOM) is joining Champion Iron Ltd and the Government of Québec in a partnership formed for the purpose of carrying out a feasibility study regarding a new multi-user rail link between the Port of Sept-Îles and the Labrador Trough.

LOM is a joint venture company that holds the Lac Otelnuk Property in Nunavik, Québec, of which Adriana owns 40% and WISCO International Resources Development & Investment Limited owns 60%.

The special purpose entity called La Société ferroviaire du Nord québécois, société en commandite (SFNQ) is open to other mining companies to join. SFNQ is a partnership of government and industry established to manage the feasibility study.

The SFNQ was formed recently, following the tabling by the Québec government of its 2014-2015 budget in June, as a partnership of government and industry and assigned the responsibility of managing the implementation of the Feasibility Study for a new Labrador Trough rail line.

The Québec government has set aside a maximum of C$20 million from its Plan Nord Fund to contribute to the study. For its part, Champion’s contribution of sunk costs is valued up to C$6 million. Among other major economic and wide-reaching social benefits, the new rail infrastructure when developed will enhance the Québec-based mining industry’s ability to service world markets with competitive long-term tariffs.

Champion’s subsidiary Champion Iron Mines Limited is a founding partner of the SFNQ, which is open to all miners in the region.

Champion’s Chairman and CEO Michael O’Keeffe said, “The SFNQ partnership includes the Government of Québec and fellow mining group Lac Otelnuk Mining Ltd, with an open invitation to others from within industry to join this important initiative”.

“A range of partners will ensure the study considers the concerns of all potential rail link users and in doing so advocates a multi-user system favouring a final outcome encouraging joint investment.  Champion is pleased to be a part of the SFNQ partnership,” O’Keeffe said.

In June this year, Champion welcomed the Government’s decision to commit to the funding of a feasibility study to determine the optimum rail option of a new rail link for iron ore miners in the Labrador Trough.

The company has been a strong and longstanding advocate of the multi-user rail feasibility study and remains committed to supporting the government and the industry in Québec through its participation as an industry partner in the SFNQ.

O’Keeffe said that the company is excited to be a founding partner of the SFNQ and for the opportunity to be part of the overall Plan Nord project, created by the government to enhance the economic, industrial and social potential of the northern region of Québec.

The study could lead to one of the largest sustainable development projects in the world, with a government that is putting the necessary conditions in place to facilitate the efforts of the private sector to deliver the immense economic potential of northern Québec while respecting social and environmental considerations.

O’Keeffe said that the prospective development of any new rail infrastructure would necessarily involve all aspects of the community, not just the mining industry, and requires the support of the First Nations and key stakeholders.

Champion is set to benefit from the development of rail infrastructure in the region, with 14 fully owned projects situated in the highly prospective Fermont Iron Ore District in northern Québec, and with overall Canadian National Instrument (NI 43-101) compliant resource of some 5,300 Mt grading on average 29% Fe.