Wuhan Iron and Steel Invests in Consolidated Thompson



Wuhan Iron and Steel, one of China’s largest steelmakers, plans to invest $240 million in Consolidated Thompson
Iron Mines’ Bloom Lake project in Quebec. The project's concentrator is shown here under construction, along with
an aerial view of the open-pit mine area. (Photo courtesy of Consolidated Thompson Iron Mines)
Consolidated Thompson Iron Mines, which is targeting a production start at its Bloom Lake iron ore project in Quebec during the fourth quarter of 2009, announced on March 30, 2009, the signing of a letter of agreement with Wuhan Iron and Steel, one of China’s largest steel producers, for a strategic investment by Wuhan into Consolidated Thompson. Wuhan will make a total investment of $240 million into Consolidated Thompson in return for a 19.9% interest in the company. Wuhan also will receive not less than a 25% interest in a newly incorporated company that will be established to operate the Bloom Lake mine and will commit to purchase a similar percentage of iron ore production over the life of the mine. Wuhan will also 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 mine, as well as from Consolidated Thompson’s Lamelee and Peppler Lake projects. Various technology and personnel exchanges are contemplated under the agreements, and Wuhan will be entitled to nominate a director to Consolidated Thompson’s board of directors.

Funds from the investment will provide necessary capital to complete construction at Bloom Lake. The Bloom Lake project is planned to begin production at an initial rate of 8 million mt/y of iron ore concentrate. A updated, NI 43-101 compliant resource estimate, released March 16, 2009, increased the project’s total estimated measured and indicated mineral resources by 189 million mt to 827 million mt. Subsequently, on April 2, 2009, Consolidated Thompson reported that it has engaged BBA Inc. to complete a feasibility study contemplating a production increase at Bloom Lake to 16 million mt/y.

Richard Quesnel, President and CEO of Consolidated Thompson, said, “While our focus is squarely on the commencement of production at Bloom Lake in the fourth quarter of 2009, we are also keeping an eye on the future and ways to leverage the strength of our assets. With the greater financial stability offered by Wuhan’s strategic investment in Consolidated Thompson, we are pleased to initiate this feasibility study on an expanded production scenario of 16 million mt/y.”

As featured in Womp 2009 Vol 04 - www.womp-int.com