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Press release from Marketwire

Champion Iron Mines Signs a Provisional Agreement with Northfield Metals to Finance Exploration and Development of the Cluster 3 Fermont Properties

Friday, September 28, 2012

Champion Iron Mines Signs a Provisional Agreement with Northfield Metals to Finance Exploration and Development of the Cluster 3 Fermont Properties16:10 EDT Friday, September 28, 2012TORONTO, ONTARIO--(Marketwire - Sept. 28, 2012) -CHAMPION IRON MINES LIMITED (TSX:CHM)(OTCQX:CPMNF)(FRANKFURT:P02) ("Champion" or the "Company") is pleased to announce the signing of a binding provisional agreement (the "Agreement") with Northfield Metals Inc. ("Northfield") defining the terms granting Northfield an option to acquire a 65% interest in the Company's seven Cluster 3 properties (the "Cluster 3 Property") located in the southern portion of the Labrador Trough in northeastern Quebec. Under the terms of the Agreement, Northfield can earn a 65% interest in the Cluster 3 Property by expending C$ 6 million in staged exploration and development work expenditures on the Cluster 3 Property, making cash payments to Champion totalling C$ 1 million, and issuing Champion 2.5 million shares - all over a 4-year period.After Northfield completes its earn-in, Champion and Northfield would form a joint venture reflective of their proportionate ownership interests in the Cluster 3 Property in order to explore and develop the retained mineral concessions. Northfield will retain a right-of-first-refusal on any part or all of Champion's proportionate interest in each of the mineral concessions comprising the Cluster 3 Property. There is also a 10 km area of influence around each mineral concession. In the event that a joint venture party's interest is diluted below 10%, it will be converted to a 1% royalty, half of which may be purchased for $3,000,000. The Agreement is subject to the receipt of all required regulatory approvals, including that of the Toronto Stock Exchange. Mr. Thomas Larsen, President and CEO of Champion states "We are pleased to have Northfield involved in the exploration and development of the Cluster 3 Property and welcome their participation in the Fermont Iron Ore District where Champion has achieved a significant amount of exploratory success. Champion's management is of the opinion that Cluster 3 has excellent potential to host a significant iron resource and we look forward to participating in the property's advancement through this option and joint venture. This transaction enables Champion to continue with its strategy of focusing on the development of its flagship Consolidated Fire Lake North Property into a producing mine and in this respect we are looking forward to receiving the Fire Lake North feasibility study".About Champion Iron Mines LimitedChampion is an iron exploration and development company with offices in Montreal and Toronto, and is focused on developing its significant iron resources in the provinces of Quebec and Newfoundland & Labrador. Champion holds a 100% interest in the Fermont Iron Holdings and a 44% interest in the Attikamagen Iron Project located in both Quebec and Labrador. The Attikamagen Project is under option to Labec Century Iron Ore Inc. ("Labec"), a subsidiary of Century Iron Mines Corporation, under which Labec can earn up to a 60% interest.Champion's Fermont Iron Holdings, including its flagship Fire Lake North Project, are located in Canada's major iron ore producing district, in close proximity to five producing iron mines. Fire Lake North is located immediately adjacent to and north of ArcelorMittal's operating Fire Lake Mine and 60 km south of Cliffs Natural Resources Inc.'s Bloom Lake Mine in northeastern Quebec. Champion's team and advisory board includes mining and exploration professionals with the mine operations experience to build the Fire Lake North Project into a producing mine.For additional information on Champion, please visit our website at www.championironmines.com. This news release includes certain information that may constitute "forward-looking information" under applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements about planned operations at the Company's projects, including its Fire Lake North Project. Forward-looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information, including the risks identified in Champion's annual information forms, management discussion and analysis and other securities regulatory filings by Champion on SEDAR (including under the heading "Risk Factors" therein). There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking information. Accordingly, readers should not place undue reliance on forward-looking information. All forward-looking information contained in this press release is given as of the date hereof and is based upon the opinions and estimates of Champion's management and information available to management as at the date hereof. Champion disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law. This press release has been prepared by Champion Iron Mines Limited and no regulatory authority has approved or disapproved the information contained herein.FOR FURTHER INFORMATION PLEASE CONTACT: Thomas G. LarsenChampion Iron Mines LimitedPresident and CEO(416) 866-2200ORJorge EstepaChampion Iron Mines LimitedVice President(416) 866-2200www.championironmines.com