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Initial market analysis and discussions with global iron marketers and consumers confirm that the sinter-feed product will be suitable for various steel-making processes. The purity and composition of the iron ore concentrate from the Fermont district, and in particular, from Champion's FLN Project is attractive to a wide range of end-users and is expected to command a premium over the Platt's sinter feed product reference price.

Rail Transportation Options

As part of the feasibility study process, the Company received positive results from its 2012 Rail Cantech Feasibility Study on an independent rail transportation solution for a haulage route from the FLN Project to the Pointe Noire port facilities. Subsequently, as announced on August 29, 2012, Champion joined a multi-user railway consortium consisting of CN and Caisse, and five other mining companies. The CN/Caisse-led consortium's feasibility study due by mid-2013 will evaluate a proposed new railway from the port facilities at Pointe Noire to Schefferville, running adjacent to the FLN Project.

Champion believes the proposed railway will help "unlock" the inherent value of the substantial iron ore deposits in the Labrador Trough, which hosts all current iron-ore production in Canada.

Port Access and Material Handling

The Company has secured port access and loading capacity at Sept-Iles/Pointe Noire, the second largest natural port in North America, for the FLN Project's life-of-mine concentrate production. The agreement allows for a guaranteed annual ship-loading capacity of 10 million tonnes of iron ore concentrate at very competitive commercial rates, with an option to increase the annual tonnage capacity. The agreement has a 20-year term and includes multiple 5-year extension options totalling an additional 20 years.

Champion, along with four other future users, are participating in and financing their pro-rata share of the construction costs for a new, multi-user, ship-loading system being built by the Port Authority of Sept-Iles, and which is on-schedule for completion by March 31, 2014, roughly a year and half ahead of FLN's anticipated start-up.

Environmental Baseline Studies

On November 21, 2012, Champion announced that future mining operations at the FLN Project will not impact water quality in the area. Sample tests confirmed neither the Run of Mine (ROM) iron ore concentrate or waste rock materials are acid generating, nor do they represent a risk with respect to heavy-metal liberation. On this basis, no special groundwater protection measures (i.e., geo-membrane) will be required for the tailings impoundment area. Moreover, no waste-water treatment will be necessary to control dissolved metals: a sedimentation pond will be sufficient to control the water effluent quality.

The completed Environmental Study or Environmental Impact Statement (EIS) will be submitted to the Ministere du Developpement Durable, de l'Environnement, de la Faune et des Parcs (MDDEFP) and Canadian Environmental Assessment Agency (CEAA) in late February 2013.

Additional investigations are underway to evaluate minimizing water transfer between the concentrator and tailings pond by transferring partially dewatered tailings to the impoundment area.

Project Infrastructure and Permitting

The all-season Trans-Quebec-Labrador Highway (Route 389 in Quebec), which is being upgraded by the Quebec Ministry of Transportation, transects north-south through the western part of the FLN Project claim group. Within the FLN Project planned mine-site area, a network of over 15 km of roads were built in order to allow access to the East and West pit areas from and provide direct access to Route 389. An additional 14 km extension was added to allow access to the Oil Can Project where Champion delineated close to 2 billion tonnes of inferred iron resources in 2012.