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 28, 2023 10:04am

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Post# 35418984

TD 2

Put a bit more of a positive spin on this one. GLTA

Champion Iron Ltd.

(CIA-T) C$5.88

Cash Costs Should Ease as Bloom Lake Nears Design Event

We have updated our estimates to reflect Champion's FQ4/23 March quarterly activities report.

Impact: SLIGHTLY NEGATIVE

Production for the March quarter totaled a record 3.08Mt at Bloom Lake slightly ahead of our estimate (+2%) but broadly in line with consensus. The ramp-up of the Phase II expansion continued through the quarter, but was impacted by the previously disclosed delayed delivery of some mining equipment. As a result, waste stripping fell behind the company's original targets, resulting in no capitalized mining costs in the quarter.
Progress towards achieving the steady-state target of 15Mtpa continues with management confident in its ability to achieve design over the near term. The company highlighted it continues to experience a short term 'disconnect' between upstream (mine site) and downstream (rail & port) capacity, which it is working to address citing locomotive delivery delays in March.
We have revised our estimates to reflect higher costs in FQ4/23 along with a slightly reduced production estimate for the June quarter to account for some remaining bottlenecks. Overall, however, we continue to view the Phase II expansion as a success, given the backdrop of COVID and its downstream impacts to supply-chain and inflation. We expect the operation to achieve design capacity in calendar H2/23.

Budget increased to maintain timeline for direct-reduction project. The Board has approved an increase to the initial budget to advance the direct reduction pellet feed (DRPF) project, which will upgrade half of Bloom Lake to DR-grade material. The initial budget was increased to $52mm from $10mm to maintain the 30-month construction and H2/2025 calendar start-up.

TD Investment Conclusion

We are maintaining our $8.50 target and BUY rating. Despite higher than expected cash costs and a slightly slower than anticipated ramp-up, Champion added an impressive $161mm in cash q/q and total liquidity now stands at $674mm. This puts the company in a very strong position to execute on its next stage of growth, the DRPF project, which represents a niche product essential for the decarbonization of the steel industry as the sector builds-out more electric-arc furnaces.