Iron ore exploration play Champion Minerals (TSX:CHM) released more drill results from its most recent discovery today, but a strong recent run in the company’s share price is more likely attributed to rising iron ore prices combined with recent takeover activity in Canada’s junior iron ore sector.
The company released results from the Harvey-Tuttle Claim Blocks, which are part of the larger Fermont Iron Property in north-eastern Quebec. Highlights included 168 meters averaging just over 30% iron, with some 12,000 meters of drilling intersecting “multiple significant iron formation intervals”.
The project lies immediately west of Consolidated Thompson Iron Mines Lamlee Property. Consolidated Thompson announced just yesterday that it is to be acquired by its larger acquisitive peer Cliffs Natural Resources (NYSE: CLF) for $4.9 billion, though share price action in Consolidated Thompson after the announcement suggests the market sees potential for another buyer to enter the fray.
At Fermont, Champion has already delineated a resource of 603 million tonnes grading 29% iron from the Bellechasse and Fire Lake North Projects. An updated resource to include drilling from Harvey-Tuttle is expected in the first quarter of 2011
"Positive results from the Fire Lake North Preliminary Economic Assessment (released November 3, 2010) bode well for the rest of the portfolio of claim blocks in the area, including Harvey-Tuttle, that generally have not been explored in several decades,” Thomas Larsen, President and CEO of Champion, stated.
“With the addition of NI 43-101 compliant Mineral Resource Estimates at Harvey-Tuttle in Q1-2011, Champion is in the enviable position of defining significant Mineral Resources at a time of growing iron ore demand."
Shares in the company slipped 7% today, but have risen from less than $1.00 per share to $2.80 in just a few months, underscoring strong demand for Canadian iron ore plays in a sector that is seeing considerable merger and acquisition activity.