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 May 31, 2023 8:24am

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Post# 35471916

TD

Have an $8.50 target. GLTA

Champion Iron Ltd.

(CIA-T) C$5.43

Q4/23 in Line — Phase II Debottlenecking Continues Event

Champion reported its Q4/F23 financial results. Management will host a conference call at 8:30 a.m. ET today (1-888-390-0546).

Impact: NEUTRAL

The company reported Q4/F23 EBITDA of $195.7mm, in line with our estimate of $194mm, but below consensus of $211mm. Adjusted EPS of $0.17 was also in line with our estimate, but slightly below consensus of $0.20.
As a reminder, production, sales, and C1 cash costs were previously reported in late-April. Production for the March quarter totalled a record 3.08Mt at Bloom Lake at cash costs of C$79/t. The ramp-up of the Phase II expansion was affected 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.
Strong FCF and solid balance sheet. We calculate that the company generated positive FCF of $155mm before working capital changes. Capital expenditures totalled only $25mm in the quarter, down 55% q/q. Only $2.5mm was incurred on the Phase II expansion in the quarter and sustaining capex fell in line with typical seasonal variations. The company ended FY2023 with cash of $327mm and total available liquidity of $674mm, compared with $476mm in the previous 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 that 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. Management anticipates potential sales limitations in the near term, which we expect will be a topic on today's call.
DR-grade project continues to progress — Recall, the initial budget was recently increased to $52mm from $10mm to maintain the 30-month construction and H2/25 calendar start-up. Other potential catalysts this year include the release of the feasibility study on the Kami project in calendar H2/23 and a feasibility study evaluating the recommissioning of the Pointe-Noire pellet plant, also in H2/23.