Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Please Try Again {{ error }}

Send my password

SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Quote  |  Bullboard  |  News  |  Opinion  |  Profile  |  Peers  |  Filings  |  Financials  |  Options  |  Price History  |  Ratios  |  Ownership  |  Insiders  |  Valuation

Champion Iron Ord Shs T.CIA

Alternate Symbol(s):  CIAFF

Champion Iron Limited is an Australia-based iron ore exploration and development company. The Company, through its wholly owned subsidiary, Quebec Iron Ore Inc., owns and operates the Bloom Lake Mining Complex, located on the south end of the Labrador Trough, approximately 13 kilometers (km) north of Fermont, Quebec. Bloom Lake is an open-pit operation with two concentrators that primarily source energy from renewable hydroelectric power. The Company ships iron ore concentrate from Bloom Lake by rail, to a ship loading port in Sept-lles, Quebec, and has sold its iron ore concentrate to customers globally, including in China, Japan, the Middle East, Europe, South Korea, India and Canada. In addition to Bloom Lake, Champion owns a portfolio of exploration and development projects in the Labrador Trough, including the Kamistiatusset Project, located a few km south-east of Bloom Lake, and the Cluster II portfolio of properties, located within 60 km south of Bloom Lake.


TSX:CIA - Post by User

Post by retiredcfon Apr 24, 2022 7:16am
362 Views
Post# 34627009

TD

TD

Q1/22 Preview: Geopolitics Drive Record-high Metal Prices

Maintenance/Grades/Logistics Drive a Weak Start to the Year Diesel, explosives, and sulphur costs spike on Russian invasion

Q1/22 base metal and bulk commodity prices were higher across the board on a q/q basis, with Russia's invasion of Ukraine driving supply uncertainty and stockpiling by consumers and traders. Nickel and zinc prices saw spectacular gains, hitting all-time highs in the case of zinc and decade-highs for nickel. Russia is a large exporter of refined nickel to Europe and the potential that the flow of nickel would be negatively affected by the invasion initially drove prices higher, which was then exacerbated by a Chinese nickel producer being caught with a large short position and the resultant short squeeze.

Cost inflation pressure has been top of mind for investors and during conversations with a number of companies in our coverage universe, management teams appeared to be expecting that 2022 y/y cost inflation, at this point, will come in at the higher end of the 5-7% range that most companies were guiding towards earlier this year. Across the board, we are hearing that diesel costs are up sharply, particularly in March, and other input/reagent costs have been experiencing additional cost pressure (explosives and sulphur).

We have not had the sense that companies are expecting to change 2022 cost guidance ranges, given that it is too early to estimate how protracted the cost pressure will be. That being said, with cost pressure remaining high and considering the lagging impact as lower-cost inventories of reagents are worked down, we expect that added cost pressure could become more evident in Q2/22.

Production off to a slow start. As expected, many companies have indicated that Q1/22 will likely be the low point for the year for production. Mine sequencing, maintenance, weather, and freight challenges affected many producers. The short- lived CP Rail strike affected sales for Teck Resources, Hudbay, and Sherritt; scheduled maintenance downtime affected production at First Quantum's Cobre Panama mine.

We are maintaining our OVERWEIGHT sector recommendation, particularly given the Canadian mining sector's preponderance of copper exposure. The myriad of concerns that are troubling commodity markets will not, in our view, undermine the long-term outlook for metals demand, particularly for copper, nickel, lithium, and uranium. These metals are firmly embedded in the energy transition and their role over the long term will intensify on the back of de-carbonization and the ‘greening’ of the economy. Teck Resources remains our ACTION LIST BUY recommendation. Our other top picks are First Quantum and Champion Iron. We will review our target prices and recommendations as Q1/22 earnings are released.


<< Previous
Bullboard Posts
Next >>