Champion Iron Ord Shs CIAFF

Primary Symbol: T.CIA

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 Apr 27, 2023 8:32am

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Post# 35416531

TD

Have an $8.50 target. GLTA

Champion Iron Ltd.

(CIA-T) C$5.88

FQ4 Production In Line But Costs Remain Elevated Event

Champion Iron reported its FQ4/23 quarterly activities report. The company plans to release its full year-end financials on May 30.

Impact: SLIGHTLY NEGATIVE

FQ4/23 operating performance — Champion reported a quarterly production record of 3.08Mt of iron ore concentrate at Bloom Lake (+4% q/q), ahead of our estimate of 3.03Mt and in line with consensus of 3.10Mt. Throughput was slightly ahead of our estimate, which was partially offset by lower recoveries from the Phase II concentrator ramp-up. Sales of 3.09Mt mirrored production volumes.
As previously announced, production for the quarter would have been higher if not for mining equipment delivery delays. Production was also impacted by a longer- than-expected maintenance shutdown of the newly commissioned crusher due to winter challenges.
Champion reported C1 cash costs of $79/dmt, up 4% q/q and 8% above our estimate of $73/dmt (consensus $74/t). Several factors drove the higher- than-expected costs beyond normal inflationary pressures (diesel, labour, and explosives), including an increased use of contractors to offset delays due to the availability of mining equipment and a longer-than-expected planned maintenance shutdown. Furthermore, the company did not capitalize any mining costs in the quarter, which impacted prior period comparisons.
Confident in the near term ramp-up to design (15Mtpa) — Despite some minor setbacks in the March quarter, management is confident Bloom Lake will achieve its steady-state of 15Mtpa in the near term. The company is still experiencing some downstream capacity constraints (rail and port), but is working to mitigate these issues. Operating cash costs should begin to abate commensurate with the planned increase in production.
Balance sheet — Full financial results were not disclosed, however, the company did report cash on hand of $327mm, which was up an impressive $161mm q/ q, which we attribute in part due to positive working capital adjustments. Total liquidity stood at $674mm as at March 31.
The Board has approved an increase to the initial budget to advance the direct reduction pellet feed project (note). The initial budget was increased to $52mm from $10mm to maintain the 30-month construction H2/2025 calendar start-up.