Consolidated Thompson Iron Mines Ltd. has reached an agreement to sell one million tonnes of iron ore concentrate annually for a 10-year term, the company said Tuesday.
Korean company SK Networks Co. Ltd., a subsidiary of the conglomerate SK Group, has committed to the offtake agreement for the Bloom Lake project in Quebec.
Consolidated Thompson said it has also reached a credit agreement with SK Networks for a US$50-million unsecured five-year term credit facility which is expected to be available for drawdown prior to Jan. 31. The company said the facility will be used to fund potential expansion at Bloom Lake and for general working capital purposes.
"These agreements attest to the robustness of the Bloom Lake project and its attractiveness to some of the world's largest consumers of iron ore. We are very pleased to have reached long-term agreements with a well-recognized Korean company such as SKN," stated Consolidated Thompson president and CEO Richard Quesnel.
Montreal-based Consolidated Thompson is a development and exploration iron ore company that is currently focused on developing the Bloom Lake deposit. It was the best-performing company listed on the TSX last year, rising more than 600 per cent.
In the summer, the company reached an agreement with Chinese steel company Wuhan Iron and Steel (Group) Corp., or WISCO, which will see WISCO make a US$240-million investment in Consolidated Thompson for a 20 per cent stake in the company. As part of that agreement, WISCO will also buy a 25 per cent stake in Bloom Lake and will be obligated to buy a percentage of the iron ore produced each year for the life of the mine.
Bloom Lake has an estimated resource base of more than one billion tonnes of iron ore. The mine should begin production at eight million tonnes per year at a cost of US$25 per tonne.
Source: Winnipeg Free Press
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