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 Jan 27, 2023 8:42am

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Post# 35249750

TD

Champion Iron Ltd.

(CIA-T) C$7.51

Phase II Hits Commercial Production; Positive DR Study Released Event

Champion reported its Q3/F23 financial results yesterday evening. The company also released the results of its direct reduction (DR) pellet feed project feasibility study. Conference call at 8:30 a.m. ET today (1-888-390-0546).

Impact: SLIGHTLY POSITIVE

Phase II reaches commercial production towards the end of Q3/F23 — Q3/ F23 production of 2.96Mt of high-grade (66%-Fe) concentrate was up 4% q/q, but missed our 3.2Mt estimate (and consensus) by ~7% as the company achieved commercial production in its ramp-up of Phase II at Bloom Lake in December. Third-party delays in delivering mining equipment, electrical failures, and weather- related operational interruptions all weighed on production during the quarter.
Cash costs of $76/t were ~6% above our estimate and ~13% above consensus, with the company flagging a number of items, including: higher fuel prices, explosives, site-level G&A inflationary pressure, and higher maintenance costs in relation to unscheduled work on the new crusher's conveyor systems.
EBITDA of $118mm was in line with our estimate and consensus as a higher- than-expected realized selling price ($130/t vs. TD: $117/t) offset lower-than- expected production and sales.
Phase II nameplate capacity expected in calendar H1/23 — Management will continue to make adjustments aimed at stabilizing and optimizing operations, and is targeting reaching nameplate capacity of ~15Mtpa in calendar H1/23, which should lower unit costs over the coming quarters.
DR feasibility study details released — The study evaluates the Phase II flowsheet modifications and required infrastructure to upgrade ~7.5Mt of annual production at Bloom Lake to DR-grade (69%-Fe) pellet feed. The pellet premium above the P65 index was not explicitly disclosed by the company, though we calculate an assumed premium of ~US$28.50/t (TD: US$25/t). The NPV-8% of $738mm (US$551mm) released by the company was well above the $385mm (US$308mm) we currently value the project at, largely driven by a lower capex, higher assumed pellet premium, and a longer operating life (Exhibit 1).
Management reiterated its 30-month construction timeline for the project and has set a budget of $10mm to advance detailed engineering and make long-lead deposits ahead of securing the additional power required and non-dilutive funding.
Available liquidity stood at $476mm at quarter-end, including $166mm of cash.