Champion arranges financing

Champion Resources (CHL-V) will finance a due diligence program on its wholly owned Farim phosphate project in Guinea-Bissau, West Africa, by selling a 3-million-unit, non-brokered private placement to the Lundin Group at 50 cents per unit.

Champion expects to raise $1.5 million in the transaction. Each unit consists of one share and one warrant allowing the holder to buy an additional share at 50 cents in the first year or 60 cents in the second.

Previous work has defined a reserve of 105 million tonnes of phosphate ore grading 29.8% P2O5. Champion drilled confirmation and exploration holes in 1998, confirming the early work and indicating the potential for additional reserves. A stepout hole intersected a 4.3-metre interval of potential ore-grade some 2.5 km west of the known deposit.

In December 1998, Champion came to preliminary terms with a lender, which is to provide an US$84-million non-recourse project loan needed to advance the phosphate project to production. The loan is subject to due diligence, the negotiation of acceptable off-take purchase contracts, and final formal approval by the lender and its insurers.

Champion has since retained Canadian Imperial Bank of Commerce to assist the company in seeking purchasers for the phosphate and in negotiating off-take contracts.

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