Champion Iron Mine CIA.TO said Friday it will buy a Quebec iron ore mine for C$10.5 million ($7.65 million), just a sliver of the C$4.9 billion that Cliffs Natural Resources CLF.N paid in 2011, when metal prices surged on booming Chinese demand.
The downturn in bulk commodities allowed Champion to negotiate a "competitive" bid, said Chief Executive Michael O'Keeffe in a statement, including C$10.5 million in cash, C$41.7 million for environmental reclamation and about C$1.1 million for bonds.
Champion shares jumped 30 percent after the announcement to 19.5 Canadian cents on the Toronto Stock Exchange, while Cliffs stock dipped 4.1 percent to $2.09 on New York.
The Bloom Lake mine and related rail assets, along with Quinto Mining Corp mineral claims, are being sold under Cliffs' restructuring of Canadian operations, which gave it creditor protection. The acquisition, subject to court approval, is expected to close in the first quarter of 2016.
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