Champion Iron Limited press release
CHAMPION IRON REPORTS ITS FY2026 SECOND QUARTER RESULTS, DECLARES DIVIDEND AND ADVANCES THE DRPF PROJECT AS SCHEDULED
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Quarterly production of 3.6Mwmt, record sales of 3.9Mdmt, revenue of $493M, EBITDA of $175M1and EPS of $0.11 Declares ninth consecutive semi-annual dividend of $0.10per ordinary share DRPF project advancing as scheduled towards an expected start of commissioning in December 2025 Reduced iron ore concentrate inventories stockpiled at Bloom Lake by 0.5Mwmt to 1.7Mwmt
MONTRÉAL, Oct. 29, 2025/CNW/ - SYDNEY, October 30, 2025- Champion Iron Limited (TSX: CIA) (ASX: CIA) (OTCQX: CIAFF) ("Champion" or the "Company") reports its operational and financial results for its financial second quarter ended September 30, 2025.
Champion's CEO, Mr. David Cataford, said, "We successfully capitalized on rising iron ore prices by delivering robust quarterly financial results, while completing our scheduled semi-annual maintenance at our site and on the third-party railway. I'm especially proud of our teams' commitment to operating Bloom Lake sustainably while optimizing operations and advancing the DRPF project towards its completion. We are pleased to have formalized the strategic partnership with Nippon Steel and Sojitz to advance the Kami Project through the ongoing definitive feasibility study. With robust financial liquidity, we remain focused on maximizing shareholder value while creating a positive impact for our host communities."
Conference Call Details
Champion will host a conference call and webcast on October 30, 2025, at 9:00 AM(Montréal time) / October 31, 2025, at 12:00 AM (Sydneytime) to discuss the results of the financial second quarter ended September 30, 2025. The conference call details are set out at the end of this press release.
1. Quarterly Highlights
Operations and Sustainability
No serious workplace-related injuries or major environmental incidents were reported during the three-month period ended September 30, 2025; Quarterly production of 3.6 million wmt of high-grade 66.5% Fe concentrate for the three-month period ended September 30, 2025, up 12% over the same period last year. Quarterly production compares favourably to that of the fourth quarter of the 2025 financial year, during which the Company also completed scheduled semi-annual maintenance of both concentration plants; Record quarterly sales of 3.9 million dmt were achieved for the three-month period ended September 30, 2025, up 18% from the same prior-year period, reducing iron ore concentrate stockpiled at Bloom Lake by 477,000 wmt quarter-over-quarter, and bringing the total to 1.7 million wmt as at September 30, 2025; and Strong mining performance with a record 22.9 million wmt of material mined and hauled at Bloom Lake for the three-month period ended September 30, 2025, an increase of 23% compared to the same period last year, driven by the optimization and recent deployment of additional mining equipment.
Financial Results
Gross average realized selling price of US$114.2/dmt1, compared to the P65 index average price of US$117.4/dmt in the period; Net average realized selling price of US$92.9/dmt1, an increase of 27% quarter-over-quarter and 18% year-over-year; C1 cash cost for the iron ore concentrate loaded onto vessels at the Port of Sept-Îles totalled $76.2/dmt1(US$55.3/dmt)2, representing a decrease of 7% quarter-over-quarter and 2% year-over-year; Net income of $56.8 million, representing EPS of $0.11, compared to $23.8 millionwith EPS of $0.05in the previous quarter, and $19.8 millionwith EPS of $0.04in the same prior-year period; EBITDA of $174.8 million1, compared to $57.8 million1quarter-over-quarter and $74.5 million1year-over-year; Cash balance, excluding the initial cash contributions from Nippon Steel Corporation ("Nippon Steel") and Sojitz Corporation ("Sojitz", and collectively with Nippon Steel, the "Partners") held in a restricted cash account by Kami Iron Mine Partnership (the "Kami Partnership"), totalled $325.5 millionas at September 30, 2025, an increase of $149.5 millionsince June 30, 2025, benefiting from the proceeds of the US$500 millionSenior Unsecured Notes issuance on July 2, 2025, and robust cash flows from operating activities, partially offset by the senior credit facilities repayment, significant capital expenditure and the dividend payment; Strong available liquidity to support growth initiatives and general corporate purposes totalled $840.4 million1as at September 30, 2025, compared to $536.6 million1as at June 30, 2025, mainly attributable to the net proceeds of long-term debt; and Semi-annual dividend of $0.10per ordinary share declared on October 29, 2025(Montréal) / October 30, 2025(Sydney), in connection with the semi-annual results for the period ended September 30, 2025.
DRPF Project Update
The DRPF project, designed to upgrade half of Bloom Lake's capacity to DR quality pellet feed iron ore grading up to 69% Fe, is progressing as scheduled, with initial commissioning expected to begin in December 2025and commercial shipments of DR quality iron anticipated by the end of the first half of the 2026 calendar year, gradually increasing thereafter. Quarterly and cumulative investments totalled $20.6 millionand $407.6 million, respectively, as at September 30, 2025. The Company expects to advance the project into the commissioning phase with an approximate cumulative investment of $500 million, in line with the inflation-adjusted estimated total capital expenditure of $470.7 milliondetailed in the project study highlights released in January 2023; and Through its ongoing discussions with prospective customers, including in the Middle Eastand North Africa, the Company expects to secure commercial agreements for its anticipated production of DR quality iron ore, which is expected to attract pricing premiums over the Company's existing high-purity iron ore concentrate.
Kami Project Update
On September 29, 2025, the Company completed the initial closing (the "Initial Closing") of the transactions contemplated by the previously announced framework agreement with Nippon Steel and Sojitz for the joint ownership and potential development of the Kami Project (the "Framework Agreement"). Concurrently with the Initial Closing, the Partners made their initial cash contributions in an aggregate amount of $68.6 million, out of a total planned cash contribution of $245 million, and paid their pro-rata share of the feasibility study costs already incurred by the Company. Following the Initial Closing, the Company holds a 51% interest in the Kami Partnership; and Submitted the Environmental Impact Statement required by the Government of Newfoundlandand Labradorin July 2025and continued work on the Kami Project's DFS, which is expected to be completed by the end of the 2026 calendar year.
2. Bloom Lake Mine Operating Activities
The Company performs the scheduled maintenance of both of its plants in the second and fourth financial quarters, which may create significant quarter-over-quarter variances in production output and mining and processing costs.
| | | Q2 FY26 | Q1 FY26 | Q/Q Change | | Q2 FY25 | Y/Y Change | | | | | | | | | | | Operating Data | | | | | | | | | Waste mined and hauled (wmt) | | 12,888,300 | 10,963,600 | 18 % | | 9,323,600 | 38 % | | Ore mined and hauled (wmt) | | 10,016,000 | 10,070,700 | (1) % | | 9,287,100 | 8 % | | Material mined and hauled (wmt) | | 22,904,300 | 21,034,300 | 9 % | | 18,610,700 | 23 % | | Stripping ratio | | 1.29 | 1.09 | 18 % | | 1.00 | 29 % | | Ore milled (wmt) | | 9,967,600 | 10,500,700 | (5) % | | 9,125,000 | 9 % | | Head grade Fe (%) | | 29.6 | 28.2 | 5 % | | 29.1 | 2 % | | Fe recovery (%) | | 79.6 | 78.2 | 2 % | | 78.7 | 1 % | | Product Fe (%) | | 66.5 | 66.3 | — % | | 66.3 | — % | | Iron ore concentrate produced (wmt) | | 3,551,600 | 3,520,600 | 1 % | | 3,170,100 | 12 % | | Iron ore concentrate sold (dmt) | | 3,850,900 | 3,831,800 | — % | | 3,265,700 | 18 % |
Bloom Lake produced 3.6 million wmt of high-grade iron ore concentrate during the three-month period ended September 30, 2025, an increase of 12% compared to 3.2 million wmt produced during the same period in 2024, during which production was interrupted for approximately one week due to nearby forest fires in July 2024.
The Company recently encountered higher ore hardness, partly attributable to a specific extension of a pit being mined to enable shorter haul access to waste dumps. Despite the impact of this ore hardness, quarterly production was positively impacted by increased recoveries resulting from the improved performance of the gravimetric systems following work programs and optimization of operations. As a result, during the three-month period ended September 30, 2025, the Fe recovery was 79.6%, compared to 78.7% for the same period in 2024. While the recovery rates are expected to fluctuate in accordance with the mine plan and its variations in ore grade, the Company will remain focused on improving and stabilizing recovery rates over time. The ore hardness challenge is expected to moderate in upcoming periods as the Company continues to deliver strong mining performance, which should allow it to optimize the blending of material from different pits.
During the three-month period ended September 30, 2025, despite a shutdown of third-party rail operations for infrastructure maintenance lasting several days, sales volumes exceeded production for the third consecutive quarter, thereby reducing the level of iron ore concentrate stockpiled at Bloom Lake by 477,000 wmt to reach 1.7 million wmt as at September 30, 2025. 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 September 30, 2025, the Company set a new record by mining and hauling 22.9 million tonnes of waste and ore, surpassing the 18.6 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 1.29 for the three-month period ended September 30, 2025, higher than the 1.00 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
| | | Q2 FY26 | Q1 FY26 | Q/Q Change | | Q2 FY25 | Y/Y Change | | | | | | | | | | | Financial Data (in thousands of dollars) | | | | | | | | | Revenues | | 492,890 | 390,027 | 26 % | | 350,980 | 40 % | | Cost of sales | | 293,398 | 313,928 | (7) % | | 252,960 | 16 % | | Other expenses | | 21,648 | 18,712 | 16 % | | 23,153 | (7) % | | Net finance costs (income) | | 25,643 | (13,256) | (293) % | | 7,486 | 243 % | | Net income | | 56,794 | 23,784 | 139 % | | 19,807 | 187 % | | EBITDA1 | | 174,823 | 57,753 | 203 % | | 74,536 | 135 % | | | | | | | | | | | Statistics (in dollars per dmt sold) | | | | | | | | | Gross average realized selling price1 | | 157.5 | 146.0 | 8 % | | 161.8 | (3) % | | Net average realized selling price1 | | 128.0 | 101.8 | 26 % | | 107.5 | 19 % | | C1 cash cost1 | | 76.2 | 81.9 | (7) % | | 77.5 | (2) % | | AISC1 | | 96.9 | 96.2 | 1 % | | 101.4 | (4) % | | Cash operating margin1 | | 31.1 | 5.6 | 455 % | | 6.1 | 410 % |
A. Revenues
Revenues totalled $492.9 million for the three-month period ended September 30, 2025, up $141.9 million from revenues of $351.0 million in the same period in 2024. Higher revenues were mainly attributable to an 18% increase in sales volume year-over-year, despite the scheduled semi-annual maintenance of third-party rail operations in September 2025, and positive provisional pricing adjustments on sales recorded during the quarter ended June 30, 2025. Freight and other costs declined by 16% year-over-year and also positively impacted revenues during the period.
Positive provisional pricing adjustments on prior-quarter sales of $40.9 million (US$30.0 million) were recorded during the three-month period ended September 30, 2025, representing a positive impact of US$7.8/dmt for the 3.9 million dmt sold during the quarter. A final average price of US$112.4/dmt was established for the 2.5 million dmt of iron ore subject to pricing adjustments as at June 30, 2025, which were provisionally priced at US$100.2/dmt.
For the three-month period ended September 30, 2025, the gross average realized selling price of US$114.2/dmt1was lower than the P65 index average price of US$117.4/dmt. The 2.5 million dmt of iron ore subject to pricing adjustments as at September 30, 2025, were evaluated using an average forward price of US$113.8/dmt. Sales contracts using backward-looking iron ore index pricing also contributed to lower selling prices as index prices on these contracts were lower than the P65 index average price during the period. 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.
Freight and other costs of US$29.1/dmt, during the three-month period ended September 30, 2025, decreased by 16%, compared to US$34.7/dmt in the same prior-year period due to a 12% decrease in the average C3 index. Sales contracts using backward-looking pricing also contributed to the reduction of freight costs as the C3 index used was lower than the average index for the period.
After taking into account sea freight and other costs of US$29.1/dmt and the positive provisional pricing adjustments of US$7.8/dmt, the Company obtained a net average realized selling price of US$92.9/dmt (C$128.0/dmt1) 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 September 30, 2025, the cost of sales totalled $293.4 million with a C1 cash cost of $76.2/dmt1, compared to $253.0 million with a C1 cash cost of $77.5/dmt1for the same period in 2024.
Mining and processing costs totalled $52.9/dmt1for the 3.4 million dmt produced in the three-month period ended September 30, 2025, representing an 8% decrease compared to $57.7/dmt produced1in the same period last year. This decrease was mainly driven by higher production volumes over which to amortize fixed costs. The plants' utilization was negatively affected in the comparative period by nearby forest fires in July 2024, whereas it was not in the current period. Despite a portion of the ore feed from a harder ore mining sequence, which is expected to decline in the near future, the increase in production volumes was also associated with higher head grade, and improved recovery rates which positively impacted mining and processing costs during the period as the Company produced higher quantities of iron ore concentrate without increasing mining costs proportionally. This gain reflects the Company's ongoing processing optimization and adjustments to its ore blending strategies.
Land transportation and port handling costs for the three-month period ended September 30, 2025, were $24.4/dmt sold1, a decrease from the $26.7/dmt sold1for the same prior-year period. This decrease was mainly attributable to higher sales volumes during the period, which contributed to the amortization of fixed costs for the Sept-Îles port yard facilities.
The C1 cash cost can also be impacted by changes in iron ore concentrate inventory valuation, which incorporate mining and processing costs from the previous quarters, along with variations in production and sales volumes. Considering the scheduled semi-annual maintenance completed during the quarter, cash cost per tonne for the period was not significantly impacted by the destocking of iron ore inventories, as the tonnes destocked carried approximately the same value as the cost of those produced in the period. The Company expects to continue incurring costs to manage and reclaim stockpiles as it destocks iron ore inventories in future periods.
C. Net Income & EBITDA
For the three-month period ended September 30, 2025, the Company generated EBITDA of $174.8 million1, representing an EBITDA margin of 35%1, compared to $74.5 million1, representing an EBITDA margin of 21%1, for the same period in 2024. Higher EBITDA and EBITDA margins were mainly driven by higher sales volumes, a higher net average realized selling price and a lower cash cost.
For the three-month period ended September 30, 2025, the Company generated net income of $56.8 million (EPS of $0.11), compared to $19.8 million (EPS of $0.04) for the same prior-year period. This increase in net income was attributable to a higher gross profit, partially offset by an unrealized foreign exchange loss resulting from the revaluation of net monetary liabilities denominated in U.S. dollars and higher income and mining taxes.
D. All-in Sustaining Cost & Cash Operating Margin
During the three-month period ended September 30, 2025, the Company realized an AISC of $96.9/dmt1, compared to $101.4/dmt1for the same period in 2024. With sustaining capital expenditures and general and administrative expenses mostly in line with the comparative period, higher iron ore concentrate sales led to lower unit costs, favourably impacting AISC for the period.
The Company generated a cash operating margin of $31.1/dmt1for each tonne of high-grade iron ore concentrate sold during the three-month period ended September 30, 2025, compared to $6.1/dmt1for the same prior-year period. The variation was due to a higher net average realized selling price and a lower AISC for the period.
4. Exploration Activities
During the three and six-month periods ended September 30, 2025, the Company maintained all its properties in good standing and did not enter into any farm-in arrangements.
During the three and six-month periods ended September 30, 2025, the Company transferred its Kami properties to the Kami Partnership and an aggregate 49% interest in the Kami Partnership was acquired by Nippon Steel and Sojitz in exchange for cash contributions. The Kami Partnership was created to jointly conduct and fund certain components of the DFS on a pro-rata basis, in accordance with the Partners' respective ownership interests.
During the three and six-month periods ended September 30, 2025, $6.4 million and $15.2 million in exploration and evaluation expenditures were incurred, respectively, compared to $4.8 million and $7.4 million, respectively, for the same prior-year periods. Exploration and evaluation expenditures were related to activities carried out in Québec and Newfoundlandand Labrador. Details on exploration projects, along with maps, are available on the Company's website at www.championiron.comunder the Operations & Projectssection.
5. Cash Flows — Purchase of Property, Plant and Equipment
| | | Three Months Ended | | Six Months Ended | | | | | | | | September 30, | | September 30, | | | | | | (in thousands of dollars) | | 2025 | | 2024 | | 2025 | | 2024 | | | | | | | | | | | | Tailings lifts | | 23,481 | | 27,997 | | 38,247 | | 44,101 | | Stripping and mining activities | | 18,739 | | 17,582 | | 31,714 | | 27,907 | | Other sustaining capital expenditures | | 27,690 | | 20,340 | | 42,190 | | 31,919 | | Sustaining Capital Expenditures | | 69,910 | | 65,919 | | 112,151 | | 103,927 | | | | | | | | | | | | DRPF project | | 20,614 | | 64,677 | | 68,074 | | 123,142 | | Other capital development expenditures at Bloom Lake | | 22,675 | | 48,586 | | 38,349 | | 67,574 | | Purchase of Property, Plant and Equipment as per Cash Flows | | 113,199 | | 179,182 | | 218,574 | | 294,643 |