CHAMPION IRON REPORTS ITS FY2024 FOURTH QUARTER PRODUCTION
- Quarterly production of 3.3M wmt, sales of 3.0M dmt and cash cost of approximately
$77 /dmt1 - Solidifying operations at
Bloom Lake following a strategy to identify bottlenecks and required investments to expand nameplate capacity beyond 15 Mtpa - Ratified a new 5-year collective bargaining agreement with
Bloom Lake's unionized employees
Champion's CEO, Mr.
Conference Call Details
Champion will host a conference call and webcast on
Operations and Sustainability
- No serious injuries or major environmental incidents reported in the quarter;
- Ratified a new 5-year collective bargaining agreement with
Bloom Lake's unionized employees, providing long-term stability for the employees, the Company and the community; - Appointed Mr.
Ronnie Beevor to the Board of Directors inMarch 2024 , who brings decades of valuable experience, as a director and Chairman of various successful mining companies; - Quarterly production of 3.3 million wmt (3.2 million dmt) of high-grade 66.1% Fe concentrate for the three-month period ended
March 31, 2024 , down 19% from the previous quarter, and up 6% over the same period last year; - Quarterly iron ore concentrate sales of 3.0 million dmt for the three-month period ended
March 31, 2024 , down 8% and 4%, from the previous quarter and the prior-year period, respectively; and - The Company continues to seek improvements from the rail operator to receive contracted haulage services to ensure that
Bloom Lake's production, as well as iron ore concentrate currently stockpiled atBloom Lake , is hauled over future periods. Iron ore concentrate stockpiled atBloom Lake reached 2.7 million wmt as atMarch 31, 2024 .
Financial Results
- C1 cash cost of approximately
$77 /dmt1 (US$57 /dmt), an increase of 5% quarter-on-quarter, and a decrease of 3% year-over-year; - Strong cash position at quarter-end with
$400.1 million in cash and cash equivalents as atMarch 31, 2024 , an increase of$12.7 million sinceDecember 31, 2023 ; and - Available liquidity to support growth initiatives, including amounts available from the Company's credit facilities, totalled
$942.1 million 1 at quarter-end, compared to$937.6 million 1 as atDecember 31, 2023 .
Growth and Development
- Filed the previously reported
Kami Project study, completed pursuant to National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101") and Chapter 5 of the ASX Listing Rules entitled "Pre-Feasibility Study for the Kamistiatusset ("Kami") Iron Ore Property", which evaluated the construction of mining and processing facilities to produce Direct Reduction ("DR") grade pellet feed iron ore from the properties of the proposed Kami mine. The Company continues to evaluate opportunities to improve the project economics and engage in strategic partnership discussions prior to considering a final investment decision; - DR pellet feed project, upgrading half of
Bloom Lake's capacity to DR quality pellet feed iron ore up to 69% Fe, remains on schedule and on budget with detailed engineering works and procurement progressing as planned. The project commissioning is scheduled for the second half of calendar year 2025, a timeline which is subject to completing key construction milestones by mid-2024; - Continued to evaluate DR pelletizing projects to further participate in the green steel supply chain and align with the accelerating industry transition to direct reduced iron and electric arc furnaces steelmaking; and
- Following the Company's strategy to push
Bloom Lake beyond its nameplate capacity in the previous quarter, in order to identify and confirm bottlenecks, the team is now analyzing the investments required to structurally increaseBloom Lake's nameplate capacity beyond 15 Mtpa over time.
Shipments were negatively impacted during the three-month period ended
The Company continues to seek improvements from the rail operator to receive contracted haulage services to ensure that
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Q4 FY24 |
Q3 FY24 |
Q/Q Change |
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Q4 FY23 |
Y/Y Change |
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Operating Data |
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Waste mined and hauled (wmt) |
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6,498,700 |
6,993,200 |
(7) % |
|
5,023,900 |
29 % |
Ore mined and hauled (wmt) |
|
9,471,200 |
11,215,800 |
(16) % |
|
9,193,800 |
3 % |
Material mined and hauled (wmt) |
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15,969,900 |
18,209,000 |
(12) % |
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14,217,700 |
12 % |
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Stripping ratio |
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0.69 |
0.62 |
11 % |
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0.55 |
25 % |
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Ore milled (wmt) |
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9,349,100 |
11,137,000 |
(16) % |
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9,054,600 |
3 % |
Head grade Fe (%) |
|
28.7 |
29.4 |
(2) % |
|
28.4 |
1 % |
Fe recovery (%) |
|
80.2 |
81.4 |
(1) % |
|
78.6 |
2 % |
Product Fe (%) |
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66.1 |
66.3 |
— % |
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66.1 |
— % |
Iron ore concentrate produced (wmt) |
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3,275,400 |
4,042,600 |
(19) % |
|
3,084,200 |
6 % |
Iron ore concentrate sold (dmt) |
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2,968,900 |
3,227,500 |
(8) % |
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3,092,900 |
(4) % |
During the three-month period ended
The stripping ratio of 0.69 for the three-month period ended
During the three-month period ended
The iron ore head grade for the three-month period ended
The Company's average Fe recovery rate was 80.2% for the three-month period ended
With higher Fe recovery and comparable head grade,
For the three-month period ended
The year-over-year improvement in cash cost was mostly driven by lower fuel and explosives prices, and higher production, partially offset by higher than planned utilization of contractors to fill vacant positions as well as higher levels of planned and unplanned maintenance activities. Cash cost for the three-month period ended
During the three-month period ended
- ▪ the Company maintained all of its properties in good standing and did not enter into any farm-in/farm-out arrangements;
- ▪ approximately
$2 million in exploration and evaluation expenditures were incurred, compared to$2.5 million for the same prior-year period; and - ▪ exploration and evaluation expenditures mainly consisted of costs associated with updating the
Kami Project study, and exploration drilling of 1,100 m on the Bloom East properties located in the Labrador Trough.
Details on exploration projects and maps are available on the Company's website at www.championiron.com under the Operations & Projects section.
A webcast and conference call to discuss the foregoing results will be held on
An online archive of the webcast will be available by accessing the Company's website at www.championiron.com/investors/events-presentations. A telephone replay will be available for one week after the call by dialing +1-888-390-0541 within
About
Champion, through its wholly-owned subsidiary
Cautionary Note Regarding Forward-Looking Statements
This press release includes certain information and statements that may constitute "forward-looking information" under applicable securities laws. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "continues", "forecasts", "projects", "predicts", "intends", "anticipates", "aims", "targets" or "believes", or variations of, or the negatives of, such words and phrases or state that certain actions, events or results "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. Inherent in forward-looking statements are risks, uncertainties and other factors beyond the Company's ability to predict or control.
Specific Forward-Looking Statements
All statements, other than statements of historical facts included in this press release that address future events, developments or performance that Champion expects to occur are forward-looking statements. Forward-looking statements include, among other things, Management's expectations regarding: (i)
Risks
Although Champion believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such forward-looking statements involve known and unknown risks, uncertainties and other factors, most of which are beyond the control of the Company, which may cause the Company's actual results, performance or achievements to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause the actual results to differ materially from those expressed in forward-looking statements include, without limitation: (i) the results of feasibility studies; (ii) changes in the assumptions used to prepare feasibility studies; (iii) project delays; (iv) timing and uncertainty of industry shift to green steel and Electric Arc Furnaces; (v) continued availability of capital and financing and general economic, market or business conditions; (vi) general economic, competitive, political and social uncertainties; (vii) future prices of iron ore; (viii) future transportation costs; (ix) failure of plant, equipment or processes to operate as anticipated; * delays in obtaining governmental approvals, necessary permitting or in the completion of development or construction activities; and (xi) the effects of catastrophes and public health crises, including the impact of COVID-19 on the global economy, the iron ore market and Champion's operations, as well as those factors discussed in the section entitled "Risk Factors" of the Company's 2023 Annual Report, Annual Information Form and MD&A for the financial year ended
Additional Updates
All of Champion's forward-looking information contained in this press release is given as of the date hereof or such other date or dates specified in the forward-looking statements and is based upon the opinions and estimates of Champion's Management and information available to Management as at the date hereof. Champion disclaims any intention or obligation to update or revise any of the forward-looking information, whether as a result of new information, future events or otherwise, except as required by law. If the Company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements. Champion cautions that the foregoing list of risks and uncertainties is not exhaustive. Readers should carefully consider the above factors as well as the uncertainties they represent and the risks they entail.
Abbreviations
Unless otherwise specified, all dollar figures stated herein are expressed in Canadian dollars. The following abbreviations are used throughout this release: US$ (
For additional information on
This document has been authorized for release to the market by the Chief Executive Officer of
The Company's audited Consolidated Financial Statements and associated Management's Discussion and Analysis for the year ended
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1 |
C1 cash cost and available liquidity are non-IFRS financial ratio and measure, respectively, with no standard definition under IFRS and might not be comparable to similar financial measures used by other issuers. C1 cash cost is defined as cost of sales before incremental costs related to COVID-19 and Bloom Lake Phase II start-up costs (if any) divided by iron ore concentrate sold in dmt. This metric is an important tool to monitor operating cost performance. Available liquidity includes cash and cash equivalents, short-term investments (if any) and undrawn amounts of the credit facilities. The Company uses available liquidity to measure its liquidity to meet the requirements of lenders, fund capital expenditures and support operations. C1 cash cost for the three-month period ended |
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