Champion Iron Reports Robust Fourth Quarter and FY2023 Annual Results and Declares Dividend
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PRESS RELEASE
CHAMPION IRON REPORTS ROBUST FOURTH QUARTER AND
FY2023 ANNUAL RESULTS AND DECLARES DIVIDEND
▪ FY2023 revenue of $1,395M, EBITDA1 of $493M and EPS of $0.39
▪ Declares a dividend of $0.10 per ordinary share
▪ Advances the DRPF project while the Bloom Lake Phase II ramp-up continues
Montréal, May 30, 2023 (Sydney, May 31, 2023) - Champion Iron Limited (TSX: CIA) (ASX: CIA) (OTCQX: CIAFF) (“Champion” or the “Company”) is
pleased to report its operational and financial results for the fourth quarter and financial year ended March 31, 2023.
Conference Call Details
Champion will host a conference call and webcast on May 31, 2023, at 8:30 AM (Montréal time) / 10:30 PM (Sydney time) to discuss the fourth
quarter and annual results for the financial year ended March 31, 2023. Call details are outlined at the end of this press release.
Champion’s CEO, Mr. David Cataford, said: “Thanks to our team’s perseverance and efforts, we delivered another robust financial year as we
complete the ramp-up of our Phase II project, enabling us to continue to actively pursue our organic growth projects. The positive impacts that
can be measured locally, including through our partnerships with First Nations and our 1000 qua lity jobs, are extending globally through our
products that serve as a leading solution to decarbonize the steelmaking process. Our dedicated team, who successfully recomm issioned
Bloom Lake and completed the Phase II expansion project, are actively participating in a rare global opportunity to produce direct reduction
quality iron ore, enabling steelmaking without the use of coal. In tandem with the benefits from our local investments, inclu ding a recent
increase to the initial budget to advance our DRPF project, we are proud to declare another dividend for our shareholders.”
1. Highlights
Sustainability and Health & Safety
• No serious injuries during the quarter and no major environmental issues reported in the period, or since the recommissioning of
Bloom Lake in 2018;
• Fully compliant result following a site inspection by the Québec Ministry of Environment, Fight Against Climate Change, Wildlife and
Parks;
• Employee recordable injury frequency rate of 1.53 for the year, down signific antly from 2.98 last year and better than Québec ’s open
pit industry performance; and
• Optimized the Company ’s 2022 Sustainability Report, incorporating industry best practice disclosure frameworks, specifically, the
Global Reporting Initiative ( “GRI”), Sustainability Accounting Standard Board (“SASB”) an d Task Force on Climate -Related Financial
Disclosure (“TCFD”). The Sustainability Report is available on the Company’s website at www.championiron.com.
Operations and Finance
• Record quarterly production of 3.1 million wmt of high -grade 66.1% Fe concentrate for the three- month period ended March 31, 2023,
an increase of 4% and 65% compared to the previous quarter and the same period of the previous financial year, respectively. Annual
production of 11.2 million wmt of high-grade 66.1% Fe concentrate, up 41% from the previous financial year. This was attribut able to
the strong performance following Phase II achieving commercial production in December 2022;
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• Quarterly record iron ore concentrate sales of 3.1 million dmt for the three-month period ended March 31, 2023, up 15% and 64% from
the previous quarter and the same period of the previous financial year, respectively. For the year, a record 10.6 million dmt were sold
by the Company, up from 7.7 million dmt in the previous financial year;
• While the Company’s facilities reached their designed nameplate capacity on several operating days during the quarter, results were
impacted by previously disclosed delays in the delivery and commissioning of mining equipment and locomotives required to service
third-party rail capacity in Sept -Îles, limiting mining and haulage capacity. Quarterly production results were also impacted by a
longer than expected planned maintenance shutdown of one of Bloom Lake's two crushers. A four -day power outage which impacted
third-party infrastructure at the port facility in Sept-Îles impacted the Company’s shipments. With the recent delivery and assembly of
mining equipment, the progress on third-party infrastructure work programs and near-term anticipated locomotives delivery, the path
towards reaching Bloom Lake’s expanded nameplate capacity of 15 Mtpa in the near term has significantly improved;
• Revenues of $463.9 million for the three -month period ended March 31, 2023 ($331.4 million for the same period in 2022), net cash
flow from operating activities of $167.7 million ($4.3 million for the same period in 2022), EBITDA 1 of $195.7 million ($197.9 million for
the same period in 2022) an d net income of $88.2 million with EPS of $0.17 ($115.7 million with EPS of $0.23 for the same period in
2022);
• For the year ended March 31, 2023, revenues totalled $1,395.1 million ($1,460.8 million for the same period in 2022), with net cash
flow from operating activities of $236.0 million ($470.4 million for the same period in 2022), EBITDA 1 of $493.2 million ($925.8 million
for the same period in 2022) and net income of $200.7 million ($522.6 million for the same period in 2022). Revenues, EBITDA1, net
cash flow from operating activities and net income were all impacted by lower cash operating margins 1, driven by lower realized
selling prices compared to the previous year, as well as higher operating costs attributable to start-up costs and cost inflation;
• For the three -month period ended March 31, 2023, C1 cash cost 1 was $79.0/dmt (US$58.4/dmt) 2, compared to $60.0/dmt
(US$47.4/dmt)2 for the same period in 2022, due to higher fixed costs required to support nameplate capacity. Cash cost 1 for the
fourth quarter was slightly higher than cash cost 1 for the previous quarter of $76.0 /dmt (US$56.0/dmt)2, mainly due to the impact of
the change in concentrate inventory valuation;
• C1 cash cost1 of $73.9/dmt (US$55.9/dmt)2 for the year ended March 31, 2023, compared to $58.9 /dmt (US$47.0/dmt)2 for the same
period in 2022, was negatively impacted by fixed costs incurred to support the infrastructure required to achieve the higher
anticipated production prior to achieving nameplate capacity. The Company expects those costs to decrease and to normalize as
production gradually ramps up towards Bloom Lake’s expanded production nameplate capacity of 15 Mtpa. Cash cost1 during the year
was also impacted by inflationary pressures on fuel, explosives and site -related G&A expenses, additional maintenance costs and a
higher reliance on contractors at the mine due to delays in mining equipment deliveries;
• $327.1 million of cash and cash equivalents and short -term investments as at March 31, 2023, compared to $352.7 million at the
same time last year. Available liquidity1, including amounts available on the Company’s credit facilities, totalled $673.7 million at year-
end, compared to $476.0 million at the end of the previous quarter, an i ncrease of $197.7 million, mostly driven by the level of net free
cash flow; and
• Dividend of $0.10 per ordinary share declared on May 30, 2023 (Montréal time) / May 31, 2023 (Sydney time), in connection with the
semi-annual results for the period ended March 31, 2023.
Direct Reduction Pellet Feed Project (“DRPF Project”) Update
• In connection with the recently announced positive findings of the DRPF Project feasibility study, the Board of Directors approved an
increase of $52 million to the initial budget of $10 million announced on January 26, 2023, in order to maintain the DRPF Project’s
estimated 30-month construction period and a potential commissioning of the project in the second half of the calendar year 2025 ;
and
• The DRPF Project remains on schedule with detailed engineering work advancing as planned.
Other Growth and Development
• The Company continues to evaluate organic growth opportunities, including the Kamistiatusset iron ore project's (the “Kami Project”)
feasibility study which is evaluating the project’s capability to produce a Direct Reduction (“DR”) grade pellet feed product, and a
feasibility study evaluating the re -commissioning of the Pointe -Noire Iron Ore Pelletizing Facility and its ability to pro duce DR grade
pellets, in collaboration with a ma jor international steelmaking partner. Both feasibility studies are expected to be completed in the
second half of calendar year 2023.
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2. Bloom Lake Mine Operating Activities
Three Months Ended Year Ended
March 31, March 31,
2023 2022 Variance 2023 2022 Variance
Operating Data
Waste mined and hauled (wmt) 5,023,900 5,071,700 (1%) 19,574,300 20,512,500 (5%)
Ore mined and hauled (wmt) 9,193,800 5,388,200 71% 32,442,000 22,263,200 46%
Material mined and hauled (wmt) 14,217,700 10,459,900 36% 52,016,300 42,775,700 22%
Stripping ratio 0.55 0.94 (41%) 0.60 0.92 (35%)
Ore milled (wmt) 9,054,600 4,904,100 85% 31,682,900 20,972,100 51%
Head grade Fe (%) 28.4 30.3 (6%) 29.2 29.9 (2%)
Fe recovery (%) 78.6 82.7 (5%) 79.3 83.2 (5%)
Product Fe (%) 66.1 66.2 —% 66.1 66.2 —%
Iron ore concentrate produced (wmt) 3,084,200 1,869,000 65% 11,186,600 7,907,300 41%
Iron ore concentrate sold (dmt) 3,092,900 1,889,900 64% 10,594,400 7,650,600 38%
Phase II Commercial Production
During the first quarter of the 2023 financial year, the Company successfully commissioned its second ore processing plant with its first
shipment of concentrate railed in May 2022. In the second quarter of the 2023 financial year, the last major on-site Phase II infrastructure work
programs were completed, enabling the Company ’s two crushers to feed both processing facilities and reducing bottlenecks during
maintenance periods. With major on -site work programs completed ahead of schedule, Phase II reached commercial produc tion in
December 2022 and the Company continued to make improvements to stabilize and optimize operations.
While Phase II demonstrated its ability to reach the designed nameplate capacity on several operating days since reaching com mercial
production, production during the fourth quarter of the 2023 financial year was negatively impacted by the longer than expected maintenance
shutdown of the Company’s newly commissioned crusher due to winter challenges, as well as previously disclosed mining equipment delivery
and commissioning delays, which limited mining capacity. This short -term limitation in mining and crushing capacity created some
inefficiencies across the site, restricting the ongoing ramp -up during the quarter. With the r ecent delivery and assembly of mining equipment
and current work to increase throughput and the recovery ratio, the path towards Bloom Lake reaching its expanded nameplate capacity of
15 Mtpa in the near term has significantly improved.
Off-site work programs, includ ing third- party infrastructure, continued to advance during the quarter, further positioning the Company to
benefit from additional flexibility and capacity in Sept -Îles to handle the Company’s full nameplate capacity. During the three -month period
ended M arch 31, 2023, downstream limitations, including locomotive delivery delays and a four -day power outage at the port, negatively
impacted the Company’s shipments.
While the Company is experiencing a short -term disconnect in upstream and downstream capacity, compared to the completed infrastructure
at Bloom Lake, Management is confident that a stable and operational balance state will be reached in the near term. Teams at Bloom Lake are
currently working at optimizing and synchronizing the operations and adapting the maintenance practices to achieve the expected reliability,
an important step towards achieving nameplate capacity on a consistent basis. Due to third -party delays to increase infrastructure capacity,
including locomotive deliveries, the Company anticipates potential sales limitations, compared to its production capacity in the near term.
Operational Performance
Fourth Quarter of the 2023 Financial Year vs Fourth Quarter of the 2022 Financial Year
In the three -month period ended March 31, 2023, 14.2 million tonnes of material were mined and hauled, compared to 10.5 million tonnes
during the same period in 2022, an increase of 36%. The increase in material movement was enabled through the utilization of additional
equipment. Tonnage mined and hauled for the fourth quarter of the 2023 financial year was lower than anticipated, compared to the initial
Phase II ramp-up schedule, due to previously disclosed delivery delays of required mining equipment. Wi th the recent delivery and assembly of
equipment required to increase mining capacity towards Phase II's expected nameplate capacity, Management is confident its operations c an
deliver a stronger performance in the upcoming months.
The stripping ratio for the three-month period ended March 31, 2023, was affected by delivery delays that impacted the number of drills and
haul trucks available during the quarter. In order to optimize plant operations in connection with transitional incremental f eed requirements
during the Phase II ramp-up period, the Company chose to reduce mined waste. The Company intends to gradually recover accumulated waste
backlog in future periods as additional mining equipment becomes available.
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The plants processed 9.1 million tonnes of ore during the three -month period ended March 31, 2023, compared to 4.9 million tonnes for the
same prior-year period. The mining capacity limitations resulting from previously disclosed equipment delivery delays negatively impacted the
tonnage processed during the quarter. The plants’ performance during the three-month period ended March 31, 2023, was also impacted by a
longer than expected maintenance shutdown of one of the Company’s two crushers.
The iron ore head grade for the three-month period e nded March 31, 2023, was 28.4%, compared to 30.3% for the same period in 2022. The
variation in head grade is attributable to the presence of some lower -grade ore being sourced and blended from different pits, which was
anticipated and is in line with the mine plan and the LoM head grade average.
The Company’s average Fe recovery rate of 78.6% for the three-month period ended March 31, 2023, was negatively impacted by the unstable
recoveries of the Phase II concentrator, which were to be expected at this s tage of the Phase II commissioning, the limited mining capacity
reflecting the unavailability of mining equipment as well as the short-term instability of the crushing systems. The Company remains confident
in its ability to reach the average LoM expected Fe recovery rate target of 82.4% in the near term at Bloom Lake, as detailed in the Phase II
feasibility study.
Bloom Lake achieved record production of 3.1 million wmt of high -grade iron ore concentrate during the three-month period ended
March 31, 2023, an increase of 65%, compared to 1.9 million wmt during the same period in 2022, positively impacted by the ongoing
commissioning of the Phase II plant. Management expec ts to benefit from optimization work programs and recent equipment deliveries, which
should result in improved combined production of Bloom Lake's plants in the near term.
2023 Financial Year vs 2022 Financial Year
The Company mined and hauled 52.0 million tonnes of material during the year ended March 31, 2023, compared to 42.8 million tonnes for the
same period in 2022. The increase in volume of material moved at the mine was driven by additional mining equipment in operation. However,
total volume moved during the year was negatively impacted by mining equipment delivery delays.
The stripping ratio was 0.60 for the year ended March 31, 2023, compared to 0.92 for the same period in 2022, and was lower than the LoM
stripping plan as the Company strategically focused on mining ore due to the restricted availability of mining equipment caused by equipment
delivery delays, as previously detailed. The iron ore head grade of 29.2% for the year ended March 31, 2023, was comparable to last year, and is
consistent with the LoM head grade average. The lower average Fe recovery rate for the year ended March 31, 2023 , was attributable to the
commissioning of the Phase II concentrator during the year. The Company is confident to reach LoM recovery rate in the near term.
The two plants processed 31.7 million tonnes of ore during the year ended March 31, 2023, an increase of 51% over the same period in 2022, and
produced a record of 11.2 million wmt of high-grade iron ore concentrate, compared to 7.9 million wmt for the same period in 2022, benefiting
from the commissioning of the Phase II project during the first quarter of the 2023 financial year.
3. Financial Performance
Three Months Ended Year Ended
March 31, March 31,
2023 2022 Variance 2023 2022 Variance
Financial Data (in thousands of dollars)
Revenues 463,913 331,376 40% 1,395,088 1,460,806 (4%)
Cost of sales 244,444 116,658 110% 822,762 458,678 79%
Other expenses 23,748 26,648 (11%) 79,972 84,871 (6%)
Net finance costs 8,774 2,269 287% 25,587 11,045 132%
Net income 88,217 115,653 (24%) 200,707 522,585 (62%)
EBITDA1 195,709 197,938 (1%) 493,176 925,817 (47%)
Statistics (in dollars per dmt sold)
Gross average realized selling price1 183.2 207.1 (12%) 174.7 225.9 (23%)
Net average realized selling price1 150.0 175.3 (14%) 131.7 190.9 (31%)
C1 cash cost1 79.0 60.0 32% 73.9 58.9 25%
AISC1 85.7 70.5 22% 86.5 73.1 18%
Cash operating margin1 64.3 104.8 (39%) 45.2 117.8 (62%)
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A. Revenues
Fourth Quarter of the 2023 Financial Year vs Fourth Quarter of the 2022 Financial Year
Revenues totalled $463.9 million for the three-month period ended March 31, 2023, compared to $331.4 million for the same period in 2022, as
significantly higher sales volume over the same prior -year period was offset by the lower IODEX 65% Fe CFR China Index (“P65”). Lower index
price was mitigated by lower freight and other costs and a weaker Canadian dollar compared to the same period last year.
During the three-month period ended March 31, 2023, the P65 index for high-grade iron ore fluctuated from a low of US$130.0/dmt to a high of
US$148.6/dmt. The P65 index average price for the period was US$140.1 /dmt, a decrease of 17% from the same quarter last year, and a
premium of 11.6% over the IODEX 62% Fe CFR China Index average price of US$125.5 /dmt. The gross average realized selling price 1 of
US$135.5/dmt was lower than the P65 index average price of US$140.1 /dmt for the period due to certain sales contracts using backward-
looking iron ore index prices, when prices were significantly lower than the P65 index average for the three-month period ended March 31, 2023.
This was partially offset by the 2.0 million tonnes in transit as at March 31, 2023, which were provisionally priced using an average forward price
of US$141.1/dmt, which was slightly higher than the P65 index average price for the period.
During the three- month period ended March 31, 2023, 3.1 million tonnes of high- grade iron ore concentrate were sold at a gross average
realized price1 of US$135.5/dmt, before freight and other costs and provisional pricing adjustments, compared to 1.9 million tonnes sold at a
gross average realized price 1 of US$164.1/dmt for the same period in 2022. Volume of sales was up 64% over the prior -year period due to
incremental production driven by Phase II achieving commercial production in December 2022. Lower gross average realized selling price 1
reflects the lower index prices during the three-month period ended March 31, 2023, compared to the same prior-year period.
The average C3 Baltic Capesize Index (“C3”) for the three-month period ended March 31, 2023, was US$18.1/t compared to US$22.9/t for the
same period in 2022, representing a decrease of 21%, which contributed to lower freight costs in the three-month period ended March 31, 2023.
When contracting vessels on the spot market, Champion typically books vessels three to five weeks prior to the desired laycan period due to its
distance from main shipping hubs. Although this creates a delay between the freight paid and the C3 index, the effect of this delay is eventually
reconciled since Champion ships its high-grade iron ore concentrate uniformly throughout the year.
Provisional pricing adjustments on previous quarterly sales, which were impacted by the increase in the P65 index in the quarter, positively
impacted the net average realized selling price 1. During the three -month period ended March 31, 2023, a final price of US$135.6 /dmt was
established for the 1.7 million tonnes of iron ore that were in transit as at December 31, 2022, and which were previously evaluated using an
average expected price of US$129.5 /dmt. Accordingly, during the three -month period ended March 31, 2023, net positive provisional pricing
adjustments of $14.3 million (US$10.5 million) were recorded, representing a positive impact of US$3.4/dmt over the total volume of 3.1 million
dmt sold during the period.
After taking into account sea freight and other costs of US$28.0 /dmt and the positive provisional pricing adjustment of US$3.4 /dmt, the
Company obtained a net average realized selling price 1 of US$110.9/dmt (C$150.0/dmt) for its high- grade iron ore delivered or in transit at the
end of the period.
2023 Financial Year vs 2022 Financial Year
For the year ended March 31, 2023, the Company sold 10.6 million tonnes of iron ore concentrate, mainly to customers in China, Japan, South
Korea and Europe, compared to 7.7 million tonnes for the same prior-year period. This represents an increase of 38% year-over-year attributable
to Phase II achieving commercial production in December 2022. Revenues totalled $1,395.1 million for the year ended March 31, 2023 ,
compared to $1,460.8 million for the same period in 2022, as higher sales volumes were offset by lower net average realized selling price1.
While the high -grade iron ore P65 index price fluctuated between a low of US$91/dmt and a high of US$185 /dmt during the year ended
March 31, 2023, it averaged US$131.4 /dmt, representing a decrease of 27% from last year. The Company sold its product at a gross average
realized selling price1 of US$132.0/dmt. Benefiting from a premium product at 66.2% Fe, the Company expects its iron ore concentrate pricing
to continue tracking the P65 index in the long ter m. Deducting sea freight and other costs of US$30.6/dmt and the negative provisional pricing
adjustments of US$2.0/dmt, the Company obtained a net average realized selling price 1 of US$99.4/dmt (C$131.7/dmt) for its high -grade iron
ore concentrate.
B. Cost of Sales and C1 Cash Cost1
Fourth Quarter of the 2023 Financial Year vs Fourth Quarter of the 2022 Financial Year
For the three-month period ended March 31, 2023, the cost of sales totalled $244.4 million, compared to $116.7 million for the same period in
2022 for a C1 cash cost1 per tonne of $79.0/dmt during the period, compared to $60.0/dmt for the same period in 2022.
The C1 cash cost 1 per dmt sold for the three-month period ended March 31, 2023, was negatively impacted by the f ixed costs incurred to
support the infrastructure required to achieve the higher anticipated production prior to achieving nameplate capacity. The Company expects
those costs to decrease and to normalize as production gradually ramps up towards Bloom Lake' s expanded nameplate capacity of 15 Mtpa.
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Cash cost1 during the quarter was also affected by higher than expected utilization of contractors at the mine due to the previously disclosed
delivery delays in required mining equipment. The C1 cash cost1 in the three-month period ended March 31, 2023, compared to the same period
last year, was also impacted by the higher cost of fuel and explosives used in the Company's mining activities, higher workforce transportation
costs and global inflationary pressures tha t also affected contractors, rail and port operations, and food services. In addition, the longer than
expected planned maintenance shutdown of one crusher and longer haul cycle times associated with the current mine plan also c ontributed to
a higher cash cost 1 for the three -month period ended March 31, 2023. Despite factors contributing to higher cash cost 1 per dmt sold in the
period, the economic benefits of the Phase II expansion project will continue to accrue as throughput gradually increases and reaches the
expected expanded nameplate capacity of 15 Mtpa.
The life of mine stripping ratio used for cost capitalization was revised upward in December 2021 fro m 0.5 to 0.99, concurrently with the
commencement of Phase II operations. During the three -month period ended March 31, 2023, the actual stripping ratio of 0.55 was lower than
the life of mine stripping ratio used for cost capitalization; therefore, no mining costs were capitalized during the period. During the prior-year
period, the Company capitalized mining costs, contributing to lower cash cost1 for the three-month period ended March 31, 2022.
2023 Financial Year vs 2022 Financial Year
For the year ended March 31, 2023, the Company produced high-grade iron ore at a C1 cash cost 1 of $73.9/dmt, compared to $58.9/dmt for the
year ended March 31, 2022. The increase in annual C1 cash cost 1 is due to additional fixed costs incurred to support infrastructure required to
achieve the higher anticipated production prior to reaching nameplate capacity w ith the Phase II project, increased contractors' costs
attributable to mining equipment delivery delays, inflationary pressure on the cost of fuel, explosive and workforce transportation costs. Cost of
sales was also impacted by longer than expected and unplanned maintenance activities.
C. Net Income & EBITDA1
For the three -month period ended March 31, 2023, the Company generated an EBITDA 1 of $195.7 million, representing an EBITDA margin 1 of
42%, compared to $197.9 million, representing an EBITDA margin 1 of 60%, for the same period in 2022. Comparable EBITDA 1 is mainly due to
higher sales volume driven by the commissioning of Phase II during the year, offset by a higher cost of sales and l ower net average realized
selling prices1.
For the three -month period ended March 31, 2023, the Company generated net income of $88.2 million (EPS of $0.17), compared to
$115.7 million (EPS of $0.23) for the same period last year. The year-over-year decrease in net income was mainly affected by lower gross profit
as described above.
For the year ended March 31, 2023, the Company generated an EBITDA1 of $493.2 million, representing an EBITDA margin1 of 35%, compared to
$925.8 million, representing an EBIT DA margin 1 of 63%, for the same prior -year period. This year -over-year decrease in EBITDA 1 is mainly
attributable to the decrease in the net average realized selling price 1 and higher production costs, partially offset by a higher sales volume
following the commissioning of Phase II.
For the year ended March 31, 2023, the Company generated net income of $200.7 million (EPS of $0.39), compared to $522.6 million (EPS of
$1.03) for the same prior -year period. The year -over-year decrease in net income is mainly due to lower EBITDA 1 and higher depreciation,
partially offset by lower income and mining taxes.
D. All In Sustaining Cost (“AISC”)1 and Cash Operating Margin1
During the three-month period ended March 31, 2023, the Company realized an AISC1 of $85.7/dmt, compared to $70.5/dmt for the same period
in 2022. The increase relates to higher C1 cash costs1, partially offset by lower sustaining capital expenditures and lower G&A expenses per dmt.
The Company generated a cash operating margin1 of $64.3/dmt for each tonne of high-grade iron ore concentrate sold during the three-month
period ended March 31, 2023, compared to $104.8/dmt for the same prior -year period. The variation is mainly due to a combination of higher
AISC1 and a lower net average realized selling price1 for the period.
During the year ended March 31, 2023, the Company recorded an AISC1 of $86.5/dmt, compared to $73.1/dmt for the same period in 2022. The
variation is mainly due to higher C1 cash costs1, partially offset by lower sustaining capital expenditures per dmt as well as lower G&A expenses
per dmt.
The cash operating margin1 totalled $45.2/dmt for the year ended March 31, 2023, compared to $117.8/dmt for the same prior-year period. The
variation is mainly due to a lower net average realized selling price1 and higher AISC1.
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4. Conference Call and Webcast Information
A webcast and conference call to discuss the foregoing results will be held on May 31, 2023, at 8:30 AM (Montréal time) / 10:30 PM (Sydney
time). Listeners may access a live webcast of the conference call from the Investors section of the Company’s website at
www.championiron.com/investors/events-presentations or by dialing toll fre e +1-888-390-0546 within North America or +1 -800-076-068
from Australia.
An online archive of the webcast will be available by accessing the Comp any’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 North America or +1-416-764-
8677 overseas, and entering passcode 882582 #.
About Champion Iron Limited
Champion, through its wholly-owned subsidiary Quebec Iron Ore Inc., owns and operates the Bloom Lake Mining Complex, located o n the south
end of the Labrador Trough, approximately 13 km north of Fermont, Québec. Bloom Lake is an open -pit operation with two concentrators that
primarily source energy from renewable hydroelectric power. The two concentrators have a combined nameplate capacity of 15 Mtpa and
produce a low contaminant high -grade 66.2% Fe iron ore concentrate with a proven ability to produce a 67.5% Fe direct reduction quality
concentrate. In January 2023, the Company announced the positive findings of a feasibility stu dy evaluating upgrading half of the Bloom Lake
mine capacity to a direct reduction quality pellet feed iron ore and approved an initial budget to advance the project. Bloom Lake's high-grade
and low contaminant iron ore products have attracted a premium to the Platts IODEX 62% Fe iron ore benchmark. The Company ships iron ore
concentrate from Bloom Lake by rail, to a ship loading port in Sept -Îles, Québec, and has sold its iron ore concentrate to customers globally,
including in China, Japan, the Middle Eas t, 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 kilometres s outh-east of
Bloom Lake, and the Consolidated Fire Lake North iron ore project, located approximately 40 km south of Bloom Lake.
Cautionary Note Regarding Forward-Looking Statements
This press release includes certain information and statements that may constitute “forward -looking information” under applicable Canadian
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 c ertain 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, developme nts or
performance that Champion expects to occur are forward- looking statements. Forward- looking statements include, among other t hings,
Management’s expectations regarding: (i) the Company's Phase II expansion project, its expected achievement of nameplate capacity,
throughput, recovery rates, economic and other benefits, impact on nameplate capacity, milestones and associated costs, and related port
capacity; (ii) the project to upgrade the Bloom Lake iron ore concentrate to a higher grade with lower contaminants and to convert
approximately half of Bloom Lake’s increased nameplate capacity of 15 Mtpa to commercially produce a DR qu ality pellet feed iron ore,
expected project timeline, capital expenditure, budget and financing; (iii) the feasibility study evaluating the re -commissioning of the Pointe -
Noire Iron Ore Pelletizing Facility to produce DR grade pellets and its anticipated completion timeline; (iv) the Kami Project's feasibility study, its
purpose, including evaluating the potential to produce a DR grade product, and anticipated completion timeline; (v) the shift in steel industry
production methods towards reducing emissions and green steel production methods and the Company's participation therein, contribution
thereto and positioning in connection therewith; (vi) optimization work programs and their expected results and impact on production; (vii)
expected locomotives delivery and potential sales limitations; (viii) production and recovery rate targets and Company’s performance; and (ix)
the Company’s growth and opportunities generally.
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 th ose expressed in forward- looking
statements include, without limitation: (i) the results of feasibility studies; (ii) changes in the assumptions used to prepa re feasibility studies;
(iii) project delays; (iv) timing and uncertainty of industry shift to gre en steel and EAF; (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; (x) delays in obtaining
governmental approvals, necessary permitting or in the completion of development or construction activities; and (xi) the eff ects of
8 Page
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 March 31, 2023, which are available on SEDAR at www.sedar.com, the ASX at www.asx.com.au and
the Company's website at www.championiron.com. There can be no assurance that such information will prove to be accurate as actual results
and future events could differ materially from those anticipated in such forward -looking information. Accordingly, readers should not place
undue reliance on forward-looking information.
Additional Updates
All of Champion's forward -looking information contained in this p ress release is given as of the date hereof or such other date or dates
specified in 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 di sclaims 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 do es 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 millions of Canadian dollars, except for: (i) t abular amounts which
are in thousands of Canadian dollars; and (ii) per share or per tonne amounts. The following abbreviations and definitions are used throu ghout
this press release: US$ (United States dollar), C$ (Canadian dollar), Fe (iron ore), wmt (wet metric tonnes), dmt (dry metric tonnes), Mtpa (million
tonnes per annum), M (million), km (kilometers), LoM (life of mine), G&A (general and administrative), EBITDA (earnings befor e interest, tax,
depreciation and amortization), AISC (all -in sustaining cost), EPS (earnings per share), M anagement (Champion’s management team), Bloom
Lake or Bloom Lake Mine (Bloom Lake Mining Complex) and Phase II (Phase II expansion project). The utilization of “Champion” or the
“Company” refers to Champion Iron Limited and/or one, or more, or all of its subsidiaries, as applicable. "IFRS" refers to International Financial
Reporting Standards.
For further information, please contact:
Michael Marcotte, CFA
Senior Vice-President, Corporate Development and Capital Markets
514-316-4858, Ext. 1128
For additional information on Champion Iron Limited, please visit our website at: www.championiron.com.
This document has been authorized for release to the market by the CEO of Champion Iron Limited, David Cataford.
Copies of the Company’s audited Consolidated Financial Statements and associated Management's Discussion and Analysis (“MD&A”) for the
year ended March 31, 2023 are available under the Company's profile on SEDAR ( www.sedar.com), on the ASX (www.asx.com.au ) and the
Company's website (www.championiron.com).
1 This is a non-IFRS financial measure, ratio or other financial measure. The measure is not a standardized financial measure under the financial reporting framework used
to prepare the financial statements and might not be comparable to similar financial measures used by other issuers. Refer to the section below - Non-IFRS and Other
Financial Measures for definitions of these metrics and reconciliations to the most comparable IFRS measure when applicable. Additional details for these non-IFRS and
other financial measures, have been incorporated by reference and can be found in section 22 of the Company's MD&A for the year ended March 31, 2023, available on
SEDAR at www.sedar.com, the ASX at www.asx.com.au and on the Company's website under the Investors section at www.championiron.com.
2 See the "Currency" section of the MD&A for the year ended March 31, 2023, included in note 7 - Key Drivers, available on SEDAR at www.sedar.com , the ASX at
www.asx.com.au and on the Company's website under the Investors section at www.championiron.com.
3 See the "Cautionary Note Regarding Forward-Looking Statements" section of this press release.