Under the deal, Gimus will issue its 43,000,000 common shares agrees to Fancamp at a proposed price of $0.10 per share, while Fancamp will offer a 1.5% net sales royalty.
The transaction is subject to the approval of the TSX Venture Exchange and also includes reverse takeover of Gimus by Fancamp under the policies of TSX-V with the approval of the Gimus shareholders.
According t the company, the project has reserves of 464.6 million tonnes with over 32% iron.
Gimus Board chairman Pierre Barnard said the proposed transaction enables the company to acquire a significant project on favorable terms given the current economic conditions for junior mineral companies and the state of the iron ore industry.
"This transaction should greatly benefit the Gimus shareholders if the current economic recovery strengthens and the demand for iron ore improves," Barnard added.
Champion president and CEO Tom Larsen said, "The Lac Lamêlée South Iron Project along with other advanced properties in the vicinity such as Champion’s Consolidated Fire Lake North deposit will only enhance and support the concept of a new multi-user rail system with the first leg being built in the Quebec district of the Southern Labrador Trough."
