UPDATE 2-Consolidated Thompson finalizes WISCO deal

* Establishes terms of $240 mln investment

* Deal will give China's WISCO 19.99 pct stake

* Focus on Bloom Lake iron ore project

* Consolidated Thompson shares down 2 pct (Adds details on deal, background; figures in U.S. dollars, unless noted)

By Euan Rocha

TORONTO, June 9 (Reuters) - Canadian mining and exploration company Consolidated Thompson (CLM.TO) said on Tuesday that it had finalized terms of an agreement with China's Wuhan Iron and Steel Corp for a $240 million investment.

WISCO will buy 38.7 million shares of Consolidated Thompson -- 19.99 percent of those outstanding -- for C$2.72 each. Consolidated Thompson will receive aggregate proceeds of C$105.2 million.

The deal gives WISCO the right to nominate a director to Consolidated Thompson's board and a pre-emptive right to maintain a proportionate stake in the company.

The two companies will establish a limited partnership in which WISCO will hold a 25 percent interest and to which Consolidated Thompson will contribute its Bloom Lake property.

Bloom Lake is a development-stage iron ore project that will have a 34-year mine life, based on its feasibility study. The project is located in Duplessis County in Quebec.

WISCO will give Consolidated Thompson the balance of the $240 million once the limited partnership deal is in place.

Consolidated Thompson will be the manager of the Bloom Lake project and, once the mine is in commercial production, it will receive a management fee on a per tonne basis.

Under an offtake agreement with the limited partnership, WISCO will be obliged to buy, at fair market value, a percentage of iron ore produced each year at the Bloom Lake mine.

China has sought to satisfy its steel industry's huge appetite for iron ore through striking offtake agreements and other such deals with major producers.

However, a $19.5 billion megadeal between Chinese metals group Chinalco and Rio Tinto (RIO.L) (RIO.AX) fell apart last week, after Rio dumped the Chinese investment in favor of raising capital through a $21 billion rights issue and a joint venture with rival BHP Billiton (BHP.AX) (BLT.L).

The deal leaves China, the world's biggest steel-making nation, vulnerable to just two major iron ore suppliers -- the Rio-BHP combination and Brazil's Vale (VALE5.SA) -- controlling 70 percent of global iron ore trade. [ID:nSYD73514]