Champion Iron Limited press release

CHAMPION IRON REPORTS ITS FY2026 FIRST QUARTER RESULTS, AND ADVANCES THE DRPF PROJECT AS SCHEDULED

2025-07-29

TSX - Toronto Stock Exchange · Iron · Aluminium · Manganese · Copper · Zinc · Australia

Canada NewsWire

Quarterly production of 3.5M wmt, record level of sales of 3.8M dmt, revenue of $390M , EBITDA of $58M 1 and EPS of $0.05 Reduced inventories of iron ore concentrate stockpiled at Bloom Lake by 0.4M wmt to 2.1M wmt DRPF project progressing as scheduled toward an expected start for commissioning in December 2025 Refinanced Senior Credit Facilities with a US$500M Senior Unsecured Notes offering, strengthening the Company's financial flexibility

MONTRÉAL , July 29, 2025 /CNW/ - SYDNEY , July 30, 2025 - Champion Iron Limited (TSX: CIA) (ASX: CIA) (OTCQX: CIAFF) ("Champion" or the "Company") reports its operational and financial results for its financial first quarter ended June 30, 2025 .

Champion's CEO, Mr. David Cataford, said, "Our agile workforce remains focused on optimizing operations as we strategically position our Company to capitalize on the anticipated growth in demand for high-purity iron ore. Improving transportation logistics enabled us to achieve record quarterly iron ore concentrate sales volumes while further reducing stockpiled iron ore inventories at Bloom Lake. The DRPF project remains on track, and we recently achieved a significant milestone for the Kami Project by entering into a framework agreement with Nippon Steel Corporation and Sojitz Corporation. The framework agreement and the partnership contemplated, will allow us to advance the Kami Project without compromising our financial liquidity in the foreseeable future. Additionally, our successful US$500M Senior Unsecured Notes offering in July replaced our previous credit facilities, reinforcing our balance sheet with greater flexibility and long-term stability. As we continue to de-risk our project portfolio, our commitment remains to maximizing shareholder value while maintaining a disciplined capital management approach."

Conference Call Details Champion will host a conference call and webcast on July 30, 2025, at 9:00 AM (Montréal time) / 11:00 PM ( Sydney time) to discuss the results of the financial first quarter ended June 30, 2025. The conference call details are set out at the end of this press release.

1. Quarterly Highlights

Operations and Sustainability

No serious injuries or major environmental incidents were reported in the three-month period ended June 30, 2025 ; Quarterly production of 3.5 million wmt (3.4 million dmt) of high-grade 66.3% Fe concentrate for the three-month period ended June 30, 2025 , down 9% over the same period last year, impacted by higher hardness of processed ore and lower availability of both concentration plants; Record quarterly sales of 3.8 million dmt for the three-month period ended June 30, 2025 , up 10% from the previous quarter and 11% from the same prior-year period, despite scheduled semi-annual maintenance on third-party rail infrastructure in June 2025 . As a result, iron ore concentrate stockpiled at Bloom Lake decreased by 440,000 wmt quarter-over-quarter to 2.1 million wmt as at June 30, 2025 ; and Material mined and hauled at Bloom Lake reached a record 21.0 million tonnes for the three-month period ended June 30, 2025 , an increase of 20% compared to the same period last year, supported by the recent addition of mining equipment.

Financial Results

Gross average realized selling price of US$105.5 /dmt 1 , compared to the P65 index average of US$108.4 /dmt in the period; Net average realized selling price of US$73.4 /dmt 1 , a decrease of 14% quarter-over-quarter and 26% year-over-year; C1 cash cost for the iron ore concentrate loaded onto vessels at the Port of Sept-Îles totalled $81.9 /dmt 1 ( US$59.2 /dmt) 2 , representing an increase of 2% quarter-over-quarter and 7% year-over-year; Net income of $23.8 million , representing EPS of $0.05 , compared to $39.1 million with EPS of $0.08 in the previous quarter, and compared to a net income of $81.4 million with EPS of $0.16 in the same prior-year period; EBITDA of $57.8 million 1 , a decrease of 55% quarter-over-quarter and 68% year-over-year; On June 3, 2025 , Caisse de dépôt et placement du Québec exercised warrants to acquire 15 million ordinary shares of Champion, resulting in total proceeds to the Company of $36.7 million . The warrants had been granted pursuant to a financing in August 2019 ; Cash balance totalled $176.1 million as at June 30, 2025 , an increase of $58.6 million since March 31, 2025 , benefiting from the improvements in operating working capital and proceeds from the warrants exercise along with a drawdown on the Company's senior revolving facility (the "Revolving Facility"), while the Company continued to advance the Direct Reduction Pellet Feed project (the "DRPF Project"), and invest in sustainable capital expenditures; and On July 2, 2025 , Champion issued US$500 million of 7-year Senior Unsecured Notes with an interest rate of 7.875%. Proceeds from the offering were used to repay the Company's existing US$230 million senior term loan and the outstanding balance of US$105 million under the Revolving Facility. The transaction had minimal impact on the Company's net debt and further strengthened its available liquidity, which totalled $536.6 million 1 as at June 30, 2025 , and is expected to be used to support general corporate purposes.

Growth and Development

The DRPF project, designed to upgrade half of Bloom Lake's capacity to DR quality pellet feed iron ore grading up to 69% Fe, continues to progress as scheduled, with commissioning planned for December 2025 and commercial shipments of DR quality iron expected in the first half of the 2026 calendar year, gradually increasing thereafter. Quarterly and cumulative investments totalled $47.5 million and $387.0 million , respectively, as at June 30, 2025 , out of an estimated total capital expenditure of $470.7 million detailed in the project study highlights released in January 2023 ; During the three-month period ended June 30, 2025 , progress continued on the definitive feasibility study (the "DFS") for the Kami Project, which is expected to be completed by the end of the 2026 calendar year; and On July 21, 2025 , Champion entered into a definitive framework agreement (the "Framework Agreement") with Nippon Steel Corporation ("Nippon Steel") and Sojitz Corporation ("Sojitz", and collectively with Nippon Steel, the "Partners"), pursuant to which the Partners have agreed, subject to the Framework Agreement's terms and conditions, to initially contribute $245 million for an aggregate 49% interest in Kami Iron Mine Partnership (the "Partnership"), a new entity formed for the ownership and potential development of the Kami Project. Additional details can be found in the Company's press release dated July 21, 2025 (Montréal), available under its profile on SEDAR+ at www.sedarplus.ca , the ASX at www.asx.com.au and the Company's website at www.championiron.com .

2. Bloom Lake Mine Operating Activities

The Company performs both its plants' scheduled maintenance in the second and fourth financial quarters, creating significant quarter-over-quarter variances in production output and mining and processing costs.

| | | Q1 FY26 | Q4 FY25 | Q/Q Change | | Q1 FY25 | Y/Y Change | | | | | | | | | | | Operating Data | | | | | | | | | Waste mined and hauled (wmt) | | 10,963,600 | 10,886,200 | 1 % | | 6,733,700 | 63 % | | Ore mined and hauled (wmt) | | 10,070,700 | 9,470,100 | 6 % | | 10,779,300 | (7) % | | Material mined and hauled (wmt) | | 21,034,300 | 20,356,300 | 3 % | | 17,513,000 | 20 % | | Stripping ratio | | 1.09 | 1.15 | (5) % | | 0.62 | 76 % | | Ore milled (wmt) | | 10,500,700 | 9,160,300 | 15 % | | 11,084,300 | (5) % | | Head grade Fe (%) | | 28.2 | 29.2 | (3) % | | 29.1 | (3) % | | Fe recovery (%) | | 78.2 | 78.3 | — % | | 79.3 | (1) % | | Product Fe (%) | | 66.3 | 66.5 | — % | | 66.3 | — % | | Iron ore concentrate produced (wmt) | | 3,520,600 | 3,167,000 | 11 % | | 3,876,500 | (9) % | | Iron ore concentrate sold (dmt) | | 3,831,800 | 3,495,300 | 10 % | | 3,442,800 | 11 % |

Bloom Lake produced 3.5 million wmt (3.4 million dmt) of high-grade iron ore concentrate during the three-month period ended June 30, 2025, a decrease of 9% compared to 3.9 million wmt (3.8 million dmt) produced during the same period in 2024. Bloom Lake's overall performance continued to be impacted by the hardness of ore processed, together with lower head grade. As a result, Champion's average Fe recovery rate was 78.2% for the three-month period ended June 30, 2025, compared to 79.3% for the same period in 2024. Champion is adjusting its operating and maintenance strategies to manage varying ore feed characteristics. While mining performance remained robust during the three-month period ended June 30, 2025, processing harder ore impacted grinding efficiency and Fe recovery. The Company will continue to optimize its operations and remains focused on improving and stabilizing recovery rates over time. During the quarter, the Company capitalized on a scheduled annual power interruption by the service provider, which briefly impacted operations, to perform planned maintenance on certain processing equipment.

Sales volumes reached a record level during the three-month period ended June 30, 2025, exceeding production, thereby reducing the level of iron ore concentrate stockpiled at Bloom Lake by 440,000 wmt to reach 2.1 million wmt as at June 30, 2025 . During the quarter, sales were negatively impacted by a scheduled semi-annual shutdown of rail operations for third-party infrastructure maintenance. The Company expects that stockpiled volumes of iron ore concentrate will continue to decrease in future periods. However, the pace of future destocking is expected to vary due to scheduled semi-annual maintenance work at the mine and on the rail network, as well as seasonal transportation constraints. Champion continues to work closely with the rail operator to receive consistent contracted haulage services, ensuring that both ongoing production and existing stockpiles at Bloom Lake are hauled over future periods.

During the three-month period ended June 30, 2025, the Company set a new record by mining and hauling 21.0 million tonnes of waste and ore, surpassing the 17.5 million tonnes of waste and ore recorded in the same prior-year period. This improvement in mining performance was driven by Champion's investments in additional haul trucks and loading equipment during the second half of the previous financial year, as well as enhanced utilization and availability of mining equipment. The strong mining performance enabled the Company to mine and haul a higher volume of waste material, resulting in a stripping ratio of 1.09 for the three-month period ended June 30, 2025, significantly higher than the 0.62 ratio recorded in the same prior-year period. Champion anticipates maintaining elevated stripping activity in upcoming periods, consistent with its LoM plan.

3. Financial Performance

| | | Q1 FY26 | Q4 FY25 | Q/Q Change | | Q1 FY25 | Y/Y Change | | | | | | | | | | | Financial Data (in thousands of dollars) | | | | | | | | | Revenues | | 390,027 | 425,345 | (8) % | | 467,084 | (16) % | | Cost of sales | | 313,928 | 279,644 | 12 % | | 264,911 | 19 % | | Other expenses | | 18,712 | 19,619 | (5) % | | 21,159 | (12) % | | Net finance costs | | (13,256) | 11,286 | (217) % | | 8,259 | (261) % | | Net income | | 23,784 | 39,140 | (39) % | | 81,357 | (71) % | | EBITDA 1 | | 57,753 | 127,378 | (55) % | | 181,160 | (68) % | | | | | | | | | | | Statistics (in dollars per dmt sold) | | | | | | | | | Gross average realized selling price 1 | | 146.0 | 160.4 | (9) % | | 171.6 | (15) % | | Net average realized selling price 1 | | 101.8 | 121.7 | (16) % | | 135.7 | (25) % | | C1 cash cost 1 | | 81.9 | 80.0 | 2 % | | 76.9 | 7 % | | AISC 1 | | 96.2 | 93.1 | 3 % | | 91.6 | 5 % | | Cash operating margin 1 | | 5.6 | 28.6 | (80) % | | 44.1 | (87) % |

A. Revenues

Revenues totalled $390 .0 million for the three-month period ended June 30, 2025, down $77.1 million from $467 .1 million in the same period in 2024. Sales volumes rose by 11% and freight and other costs declined by 16% year-over-year. These positive impacts were more than offset by a lower gross average realized selling price, driven by a decline in the P65 index price, and negative provisional pricing adjustments on sales recorded during the previous quarter.

During the three-month period ended June 30, 2025, sales volumes reached a record of 3.8 million dmt, despite the impact of a planned rail shutdown during the quarter. A second semi-annual maintenance of rail infrastructure is scheduled in the second quarter of the current financial year and is expected to impact shipment pace and volumes transported to the Port of Sept-Îles.

Negative provisional pricing adjustments on prior-quarter sales of $26 .6 million ( US$20 .1 million) were recorded during the three-month period ended June 30, 2025, representing a negative impact of US$5.2 /dmt over the 3.8 million dmt sold during the quarter. A final average price of US$103.6 /dmt was established for the 2.7 million dmt of iron ore subject to pricing adjustments as at March 31, 2025, which were provisionally priced at US$111.1 /dmt.

The gross average realized selling price of US$105.5 /dmt 1 for the three-month period ended June 30, 2025, was lower than the P65 index average price of US$108.4 /dmt. The 2.5 million dmt of iron ore subject to pricing adjustments as at June 30, 2025, were evaluated at an average price of US$100.2 /dmt. The gross average realized selling price was also negatively impacted by the Company's strategic transition to a higher grade DRPF product. As part of this shift, Champion intentionally reduced volumes of iron ore concentrate sold under long-term sales contracts to retain a greater proportion of its iron ore concentrate for the short-term and spot markets, which have recently experienced greater pricing volatility and pricing discounts. These impacts were partially offset by sales using backward-looking iron ore index pricing, which exceeded the P65 index average price during the period.

Freight and other costs of US$26.9 /dmt during the three-month period ended June 30, 2025, decreased by 16%, compared to US$32.1 /dmt in the same prior-year period, mainly driven by a decrease in the average C3 index. Freight and other costs for the period remained elevated due to additional shipping expenses incurred from rerouting vessels via the Cape of Good Hope, as a result of the ongoing conflict in the Red Sea.

After taking into account sea freight and other costs of US$26.9 /dmt and the negative provisional pricing adjustments of US$5.2 /dmt, the Company obtained a net average realized selling price of US$73.4 /dmt ( C$101.8 /dmt 1 ) for its high-grade iron ore concentrate shipped during the quarter.

B. Cost of Sales and C1 Cash Cost

For the three-month period ended June 30, 2025, the cost of sales totalled $313 .9 million with a C1 cash cost of $81.9 /dmt 1 , compared to $264 .9 million with a C1 cash cost of $76.9 /dmt 1 for the same period in 2024. The increase in cost of sales reflected the higher sales volumes and the reduction of stockpiled iron ore concentrate inventory over the quarter since these tonnes were valued at higher production costs than those of the current quarter due to major maintenance carried out in March 2025 .

Mining and processing costs totalled $53.7 /dmt 1 for the 3.4 million dmt produced in the three-month period ended June 30, 2025, representing a 12% increase compared to $47.9 /dmt produced 1 in the same period last year. This increase was mainly driven by higher stripping activities, with 4.2 million more tonnes of waste mined and hauled during the quarter than in the same prior-year period, in line with the long-term mine plan. Additional contributing factors included increased maintenance resulting from premature wear on crushers and grinding circuits due to processing harder ore, and lower production volumes over which to amortize fixed costs.

Land transportation and port handling costs for the three-month period ended June 30, 2025, were $24.3 /dmt sold 1 , a decrease from the $25.3 /dmt sold 1 for the same period last year. This decrease was mainly attributable to higher sales volumes during the period, which contributed to the amortization of fixed costs of the Sept-Îles port facilities.

The C1 cash cost was also impacted by changes in iron ore concentrate inventory valuation, reflecting mining and processing costs from the previous quarter, along with variations in production and sales volumes.

C. Net Income & EBITDA

For the three-month period ended June 30, 2025, the Company generated EBITDA of $57 .8 million 1 , representing an EBITDA margin of 15% 1 , compared to $181 .2 million 1 , representing an EBITDA margin of 39% 1 , for the same period in 2024. Lower EBITDA and EBITDA margin were mainly driven by a lower net average realized selling price and a higher cost of sales, partially offset by higher sales volumes.

For the three-month period ended June 30, 2025, the Company generated net income of $23 .8 million (EPS of $0.05 ), compared to $81 .4 million (EPS of $0.16 ) for the same prior-year period. This decrease in net income was attributable to lower gross profit, partially offset by a foreign exchange gain resulting from the revaluation of U.S. dollar-denominated net monetary liabilities, driven by the strengthening of the Canadian dollar at the end of the quarter, as well as lower income and mining taxes.

D. All-in Sustaining Cost & Cash Operating Margin

During the three-month period ended June 30, 2025, the Company realized an AISC of $96.2 /dmt 1 , compared to $91.6 /dmt 1 for the same period in 2024, an increase mainly attributable to a higher C1 cash cost, mitigated by higher volumes of iron ore concentrate sold during the period.

The Company generated a cash operating margin of $5.6 /dmt 1 for each tonne of high-grade iron ore concentrate sold during the three-month period ended June 30, 2025, compared to $44.1 /dmt 1 for the same prior-year period. The variation was mainly due to a lower net average realized selling price and a higher AISC for the period.

4. Exploration Activities

During the three-month period ended June 30, 2025, the Company maintained all its properties in good standing and no farm-in or farm-out arrangements came into effect. In relation to the Kami Project, the Partners agreed to jointly conduct and fund certain components of the DFS on a pro-rata basis, in accordance with their respective ownership interests. Expected reimbursements of expenditures already incurred by Champion pursuant to the existing collaboration agreement with the Partners were deducted from exploration and evaluation assets.

During the three-month period ended June 30, 2025, $8 .8 million in exploration and evaluation expenditures were incurred, compared to $2 .6 million for the same prior-year period. During the three-month period ended June 30, 2025, exploration and evaluation expenditures related to activities carried out in Québec and Newfoundland and Labrador .

Details on exploration projects, along with maps, are available on the Company's website at www.championiron.com under the Operations & Projects section.

5. Cash Flows — Purchase of Property, Plant and Equipment

| | | Three Months Ended | | | | | | June 30, | | | | (in thousands of dollars) | | 2025 | | 2024 | | | | | | | | Tailings lifts | | 14,766 | | 16,104 | | Stripping and mining activities | | 12,975 | | 10,325 | | Other sustaining capital expenditures | | 14,500 | | 11,579 | | Sustaining Capital Expenditures | | 42,241 | | 38,008 | | | | | | | | DRPF project | | 47,460 | | 58,465 | | Other capital development expenditures at Bloom Lake | | 15,674 | | 18,988 | | Purchase of Property, Plant and Equipment as per Cash Flows | | 105,375 | | 115,461 |

Sustaining Capital Expenditures

Sustaining capital expenditures were $11.0 /dmt sold for the three-month period ended June 30, 2025, comparable to the same prior-year period.