Champion Iron Mine Limited announced that the execution of a definitive agreement with Northfield Metals Inc in respect of its previously announced agreement whereby Northfield has been granted an option to earn a 65% interest in seven iron rich mineral concessions, which Champion calls Cluster 3, totaling approximately 220 kilometer in the southern Labrador Trough, Fermont Iron Ore District of northeastern Quebec.
Pursuant to the definitive agreement, Northfield issued 1,000,000 common shares to Champion. In connection with the definitive agreement, Champion also completed a concurrent private placement, purchasing 2,000,000 Northfield common shares at a price of 0.25 per share for cash proceeds of 500,000 and acquiring an additional 568,000 Northfield common shares also at price of 0.25 per share in settlement of outstanding loans made to North field. All of the common shares issued by Northfield in the transactions are subject to a 4 month hold period.
In connection with these transactions, the 2 companies signed a Pre emptive Rights Agreement whereby Northfield granted Champion the right to participate in Northfield's private placements over a period of approximately 2 years expiring December 31st 2014, there by giving Champion the opportunity to maintain its proportionate interest in outstanding shares of Northfield. Champion also reserved the right and option to participate in Northfield private placements to increase Champion's holdings of Northfield shares up to 38%, which right and option will expire on June 30th 2013 or such later date when Northfield has at least 30,000,000 shares outstanding.
The two companies also signed a Board Representation and Standstill Agreement where by, for a period of approximately 5 years expiring December 31st 2017, Champion will have the right to nominate one director to Northfield's Board of Directors and will be restricted from voting in certain circumstances, including not voting against the election of any nominee to the Board of Directors proposed by North field or against any resolutions supported by Northfield's Board of Directors, subject to certain exceptions. The agreement also provides for restrictions on sales of Northfield shares by Champion without Northfield's consent for a period of approximately five years expiring December 31st 2017 and then limited monthly sales thereafter.
