Champion Iron Ord Shs T.CIA

Alternate Symbol(s): CIAFF

Steel Steel

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.

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Champion Iron Ord Shs

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Post by retiredcfon May 17, 2022 1:16pm

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Post# 34689655

TD

Currently have an $8.50 target. GLTA

Champion Iron Ltd.

(CIA-T) C$6.14

Moving Up the Value Chain; CIA Acquires Pointe Noire Pelletizer Event

This morning, Champion announced that it has entered into a definitive purchase agreement for the acquisition of the Pointe Noire Iron Ore Pelletizing Facility in Sept-Iles, Quebec. The company has also entered into an MOU with an unnamed international steelmaker to complete a feasibility study to evaluate the recommissioning of the pellet plant to produce DR-grade pellets.

Impact: POTENTIALLY POSITIVE

Pellet plant transaction background - The Pointe Noire facility is strategically located adjacent to Pointe Noire's deep-water berth and train unloading infrastructure, the site is also directly adjacent to the Sept-Iles port facilities currently used by Champion for product shipment (Exhibit 1). Commissioned in 1965 with an original pelletizing nameplate capacity of 6Mtpa, the plant was placed on care and maintenance in 2013.
Strengthens partnership with Quebec Government - The plant is being acquired from the Quebec Government for cash consideration of $2.5mm. We believe the infrastructure and strategic location of the plant is worth far more than $2.5mm and therefore we view the sale as a strong endorsement of Champion by the Quebec Government (~8.4% owner of CIA) to add value and get the plant back in production.
MOU with international steelmaker - The MOU outlines a framework for a JV to produce DR-grade iron ore pellets for sale to third parties, including the steelmaker. The two parties plan to complete a feasibility study in 2023. The plant is expected to require significant investments, including structural work, rehabilitation, and equipment enhancement prior to re-commissioning, to maximize productivity and energy efficiencies.
Provides synergies with the potential DR-concentrate plant being reviewed at Bloom Lake - As a reminder, Champion is currently undertaking a study to upgrade approximately half (~7-8Mtpa) of Bloom Lake’s post-Phase II capacity to DR-grade concentrate (>69%-Fe). We already include a value for the DR concentrate plant of $359mm, or $0.67/share (see note for details).
The refurbishment of the DR pellet plant could add further value. For reference, DR pellets current trade at US$67/t over-and-above the spot price for 65%-Fe, which are trading at US$153/t.