05:29 PM EST, 12/18/2024 (MT Newswires) -- Champion Iron ( CIAFF ) after close of trade Wednesday said Nippon Steel and Sojitz Corp entered into a binding agreement with Champion to form a partnership for the joint ownership and development of the Kamistiatusset Project (Kami) in Labrador.

The partners will initially contribute $245 million for 49% of the interest in the partnership and Champion may receive future payments based on the project's financial performance, if and when in operation. Should the company and the partners make a positive final investment decision election following the completion of a definitive feasibility study for the project, they will "share development and construction costs of the project" in accordance with their respective ownership interests.

Through the transaction and future pro-rata contributions from the partners, the project will benefit from up to $490 million in contributions prior to Champion requiring additional capital funding for its pro-rata share of the project.

Upon closing, the transaction will see Champion hold a 51% equity interest in Kami with Nippon and Sojitz holding minority positions of 30% and 19%, respectively. Nippon and Sojitz will be entitled to a production allocation of the iron ore volumes produced from Kami in accordance with their proportional ownership in the project.

"We are excited to partner with global industry leaders, who share our long-term vision for Kami to produce high-purity iron ore, which was recently recognized as a critical mineral by the Newfoundland and Labrador, Quebec and Canadian federal governments," says Champion CEO David Cataford. "Attracting such industry leaders highlights the rare quality of the Labrador Trough's resources and the region's proven ability in constructing and sustainably operating sizeable high-purity iron ore projects."