Robust quarterly production of 1,869,000 wmt and
annual production of 7,907,300 wmt as the Bloom Lake Mine Phase II
expansion project nears completion
MONTRÉAL, April 27,
2022 /CNW/ - Champion Iron Limited (TSX: CIA) (ASX:
CIA) (OTCQX: CIAFF) ("Champion" or the "Company") is pleased to
report its production results and mining operation expenditures for
its fiscal fourth quarter ended March 31, 2022. Detailed
operational and audited financial results are scheduled to be
released prior to the Company hosting a conference call and webcast
on May 26, 2022.
Conference Call Details
Champion will host a conference call and webcast on May 26,
2022 at 8:30 AM (Montréal time) /
10:30 PM (Sydney time) to
discuss the fourth quarter and annual results for the fiscal year
ended March 31, 2022. Call details are outlined at the end of
this press release.
1. Highlights
Health & Safety
- No serious injuries or major environmental issues reported
during the period;
- Health and safety awareness campaigns are in place with
continuous improvement efforts deployed throughout the
organization; and
- COVID-19 testing laboratory and prevention measures maintained
in line with the Government of Québec's directives to mitigate
risks related to COVID-19 and limit the spread of variants.
Financial
- Inaugural dividend of $0.10 per
ordinary share paid on March 1, 2022
to Champion shareholders at the close of business on February 8, 2022 in connection with the
semi-annual results for the period ended September 30, 2021; and
- Cash on hand1 and restricted cash of $396.4M as at March 31,
2022, compared to $543.4M as
at December 31, 2021 and $680.5M as at March 31,
2021, reflecting the ongoing construction of the Phase II
expansion project, working capital changes and the dividend
payment.
Operations
- Production of 1,869,000 wmt of high-grade 66.2% Fe concentrate
for the three-month period ended March 31,
2022, compared to 2,011,400 wmt of high-grade 66.5% Fe
concentrate for the same period in 2021. Production of 7,907,300
wmt of high-grade 66.2% Fe concentrate for the year ended
March 31, 2022, compared to 8,001,200
wmt of high-grade 66.4% Fe for the same period in 2021;
- Stable Fe recovery rate of 82.7% for the three-month period
ended March 31, 2022, compared to
82.6% for the same period in 2021; and
- Free on Board ("FOB") total cash cost2 of
$60.0/dmt (US$47.4/dmt) (C1) for the three-month period
ended March 31, 2022, compared to
$54.4/dmt (US$43.0/dmt) for the same period in 2021, mainly
due to increased fuel and explosives costs.
Phase II Milestones
- Imminent completion of the Bloom Lake Mine's Phase II expansion
project with commercial production anticipated by the end of
calendar 2022.
Champion's CEO, Mr. David
Cataford, said: "Our robust operational quarterly and annual
results are an ongoing testament to the commitment and
professionalism of our employees and team. Despite the many
challenges imposed by the pandemic and increased logistical
complexity across the global supply chain, our Phase II expansion
project nears completion with commissioning expected shortly.
Studies are advancing on additional organic growth opportunities in
order to capitalize on the rising demand for the high-purity iron
ore products we produce in our sought-after stable operating
jurisdiction."
2. Bloom Lake Phase II
Update
During the three-month period ended March 31, 2022,
the Company advanced the final work programs required to commission
the Phase II project. With the project nearing completion,
commercial production is anticipated to be reached by the end of
calendar 2022. Project milestones that were achieved and related
works undertaken during the three-month period ended
March 31, 2022, included:
- Water-based commissioning of multiple process systems and all
ancillary services at the plant;
- Obtained provincial government approval to expand the tailings
facilities to accommodate the full life of mine plan, while
awaiting final federal government authorization; and
- Continuation of construction works.
3. Bloom Lake Mine Operating
Activities
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Three Months
Ended
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Year Ended
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March 31,
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March 31,
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2022
|
2021
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Variance
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2022
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2021
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Variance
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|
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Operating
Data
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Waste mined and hauled
(wmt)
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5,071,700
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3,796,300
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34%
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20,512,500
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15,481,100
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33%
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Ore mined and hauled
(wmt)
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5,388,200
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5,636,100
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(4%)
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22,263,200
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21,571,700
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3%
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Material mined and
hauled (wmt)
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10,459,900
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9,432,400
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11%
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42,775,700
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37,052,800
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15%
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|
|
|
|
|
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Strip ratio
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0.94
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0.67
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40%
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0.92
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0.72
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28%
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Ore milled
(wmt)
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4,904,100
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5,237,800
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(6%)
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20,972,100
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20,598,700
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2%
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Head grade Fe
(%)
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30.3
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30.7
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(1%)
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29.9
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30.7
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(3%)
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Fe recovery
(%)
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82.7
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82.6
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—%
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83.2
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83.5
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—%
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Product Fe
(%)
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66.2
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66.5
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—%
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66.2
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66.4
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—%
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Iron ore concentrate
produced (wmt)
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1,869,000
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2,011,400
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(7%)
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7,907,300
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8,001,200
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(1%)
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Iron ore concentrate
sold (dmt)
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1,889,900
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1,971,100
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(4%)
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7,650,600
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7,684,500
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—%
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Statistics
(in dollars per dmt sold)
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Total cash cost (C1
cash cost)2
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60.0
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54.4
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10%
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58.9
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54.2
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9%
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Operational Performance
In the three-month period ended March 31, 2022,
10,459,900 tonnes of material were mined and hauled, compared to
9,432,400 tonnes during the same period in 2021, an increase of
11%. The current strip ratio is in line with the revised mine plan
which includes preparation for Phase II operations. The increase in
material movement was enabled through the utilization of additional
operational equipment compared to the same prior-year period,
offset by a longer haul cycle as material sourced from different
pits, including those that deepened with mining activities over
time, contribute to a longer haul cycle year over year.
The iron ore head grade for the three-month period ended
March 31, 2022 was 30.3%, compared to 30.7% for the same
period in 2021. 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
mining plan and the LoM head grade average.
Additionally, the Company's average Fe recovery rate remained
stable quarter over quarter as a result of a constant recovery
circuit.
Bloom Lake produced 1,869,000 wmt of 66.2% Fe high-grade iron
ore concentrate during the three-month period ended
March 31, 2022, a decrease of 7%, compared to 2,011,400
wmt of 66.5% Fe during the same period in 2021. The slightly lower
production is attributable to a lower head grade and lower
throughput. The plant processed 4,904,100 tonnes of ore during the
three-month period ended March 31, 2022, compared to
5,237,800 for the same prior-year period. The throughput for the
period was negatively affected by the operational inefficiencies
caused by the COVID-19 Omicron variant, together with minor
unplanned maintenances.
4. Mining Operating
Expenditures
During the three-month period ended March 31, 2022,
the total cash cost2 or C1 cash cost2 per
tonne, excluding specific and incremental costs related to
COVID-19, totalled $60.0/dmt,
compared to $54.4/dmt for the same
period in 2021. The total cash cost2 for the three-month
period ended March 31, 2022 was negatively impacted by
fuel price increases, longer haul cycle times associated with the
current mine plan, and the utilization of additional operational
mining equipment in order to prepare for Phase II. Increased
explosives costs also contributed to higher cash costs for the
period.
For the year ended March 31, 2022, the Company produced
high-grade iron ore at a total cash cost2 amounting to
$58.9/dmt, compared to $54.2/dmt for the year ended March 31, 2021. The variation is attributable to
the same factors that affected the total cash cost2 for
the three-month period ended March 31, 2022. In addition,
minor unplanned maintenances contributed to the higher cash cost
for the year ended March 31, 2022.
5. Exploration Activities
There were no significant changes in exploration activities in
the three-month period ended March 31,
2022.
6. Conference Call and Webcast
Information
A webcast and conference call to discuss the foregoing results
will be held on May 26, 2022 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 free 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 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 North
America or +1-416-764-8677 overseas, and entering passcode
919862 #.
About Champion Iron Limited
Champion Iron Limited, through its subsidiary Quebec Iron Ore
Inc., owns and operates the Bloom Lake Mining Complex, located on
the south end of the Labrador Trough, approximately 13 km north of
Fermont, Québec. Bloom Lake is an
open-pit operation with a concentrator that primarily sources
energy from renewable hydroelectric power. The Bloom Lake Phase I
plant has a nameplate capacity of 7.4 Mtpa and produces a low
contaminant high-grade 66.2% Fe iron ore concentrate and proved its
ability to produce a 67.5% Fe direct reduction quality concentrate,
which has 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 sells its
iron ore concentrate to customers globally, including in
China, Japan, the Middle
East, Europe, South Korea, India and Canada. In addition to the ongoing
construction to complete the Bloom Lake Phase II project, Champion
owns a portfolio of exploration and development projects in the
Labrador Trough, including the Kamistiatusset Project located a few
kilometres south-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 statements" and
"forward-looking information" under applicable securities laws. 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, including Management's
expectations regarding (i) the Company's Phase II expansion project
and its milestones, including completion, commissioning and
commercial production timeline and shipping of iron ore
concentrate; (ii) the mitigation of risks related to COVID-19 and
the limitation of the spread of its variants, including the impact
and effect of COVID-19; (iii) the Company's strategy to evaluate
its growth alternatives within its property portfolio; (iv) the
Company focus on growth opportunities and building sustainable
earnings and cash flows; (v) the Company's vision to provide market
leading high-quality iron ore products that offers a global
solution to reduce emissions in the steel making supply chain; (vi)
the LoM of the Bloom Lake Mine and related authorizations and
approvals; and (vii) the rising demand for higher grade iron ore
products. 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. 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: the results of feasibility studies;
changes in the assumptions used to prepare feasibility studies;
project delays; continued availability of capital and financing and
general economic, market or business conditions; general economic,
competitive, political and social uncertainties; future prices of
iron ore; future transportation costs, 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; the effects of
catastrophes and public health crises, including 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 2021 Annual Information
Form and the MD&A for the fiscal year ended March 31, 2021, all of 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.
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 such 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 its 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.
Investors and others should carefully consider the above factors as
well as the uncertainties they represent and the risks they entail.
Inherent in forward-looking statements are risks, uncertainties and
other factors beyond the Company's ability to predict or
control.
Abbreviations
Unless otherwise specified, all dollar figures stated herein are
expressed in Canadian dollars. The following abbreviations are used
throughout this release: US$ (United
States dollar), $ (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), Bloom
Lake or Bloom Lake Mine (Bloom Lake Mining Complex) and Phase II
(Phase II expansion project).
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 for
the year ended March 31, 2022 will be 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)
on May 26, 2022.
_____________________
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1
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Cash on hand is a
non-IFRS financial performance measure with no standard definition
under IFRS and might not be comparable to similar financial
measures used by other issuers. Cash on hand includes cash and cash
equivalents and short-term investments. The Company uses cash on
hand to measure its liquidity to meet the requirements of lenders,
fund capital expenditures and support operations.
|
2
|
Total cash cost is a
non-IFRS financial ratio with no standard definition under IFRS and
might not be comparable to similar financial measures used by other
issuers. Total cash cost is defined as cost of sales before
incremental costs related to COVID-19 divided by iron ore
concentrate sold in dmt. This metric is an important tool to
monitor operating cost performance.
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SOURCE Champion Iron Limited