Wuhan Iron and Steel (Group) Corporation, one of China's largest steelmakers, has agreed to invest $240 million in Consolidated Thompson Iron Mines Limited, an exploration and development mining company developing the Bloom Lake iron ore deposit in Quebec, according to a statement from Consolidated Thompson.

 

Wuhan will make a total investment in Consolidated Thompson of $240 million for 29,748,897 common shares, which represents 19.9% of Thompson. Wuhan will also receive no less than a 25% interest in a newly incorporated company that is to be established to operate the Bloom Lake mine; commit to purchase a similar percentage of iron ore production over the life of the mine; and be entitled to other long-term off-take rights at fair market value from both the initial production and future expansion of the Bloom Lake project as well as from Thompson's Lamelee and Peppler Lake projects. Wuhan will also be entitled to nominate a director to the board of Consolidated

Thompson.

 

Richard Quesnel, President and CEO of Consolidated Thompson, said the deal will strengthen the company's potential to expand to 16 million mt from the current mine plan of 8 million mt/year of iron ore. "In addition to providing necessary capital towards the completion of construction at Bloom Lake, we view this investment as a key strategic step in developing a long-term partnership with an important consumer of iron ore that is one of China's largest and most technologically advanced integrated steel groups," said Quesnal.

 

The Bloom Lake Iron Ore Deposit is a 640 million mt ore body grading approximately 30% Fe with a 34-year-mine life based on a feasibility study completed in April 2007, according to Consolidated Thompson. -Platts