Champion Iron Limited (ASX: CIA), is involved the production of good grade iron ore concentrate and the development and exploration of its iron ore properties in Québec, Newfoundland and Labrador. Through its wholly owned subsidiary Québec Iron Ore Inc. (QIO), they operate the Bloom Lake Mining Complex located in Québec, on the south end of the Labrador Trough.

The Bloom Lake Mining Complex is an open-pit operation with two concentration plants, boasting a combined nameplate capacity of 15 million (M) wet metric tonnes (wmt) per year. The complex produces low contaminant high-grade 66.2% Fe iron ore concentrate.

In addition to Bloom Lake, Champion Iron owns the Kamistiatusset mining properties (Kami), a project expected to be jointly developed and constructed with two other partners. The Kami Project is expected to produce 9M wmt per year of direct reduction (DR) quality iron grading above 67.5% Fe. Champion Iron acquired the Kami Project in 2021 and has since entered into a binding agreement with Nippon Steel Corporation and Sojitz Corporation for the joint ownership and development of Kami.

Financial Performance

Revenues for the year ended March 31, 2025, totalled $1.61 billion (Bn), up 5% from the previous year. Gross Profit decreased by 22.25% to $401.73M, between Gross Profit and Revenue, Cost of Sales increased significantly by 19.48% to $1.06Bn.

From Gross Profit, Operating Income, which decreased 25.32% to $320.51M, was diluted the most by G&A Expenses which were down from FY24 by 4.17% to $48.73M, and Sustainability and other community expenses which increased 4.06% to $18.56M. Earnings Before Income and Mining Taxes were brought down from this by Net Finance Costs of $57.54M, (up 59.22%), declined 34.79% YoY to $265.15M. Net Income, which declined 39.35% to $142.05M, was brought down by Current Income & Mining Taxes of $79.14M, and Deferred Income & Mining Taxes of $43.96M.

The company achieved a C1 Cash Cost of $78.3 per dry metric tonne (dmt) sold and Basic Earnings Per Share (EPS) of $0.27. Champion Iron declared two dividend payments totalling $0.20 per ordinary share for the financial year.

Total Assets increased by 13% to $3.03Bn, with the most notable asset changes in Cash & Cash Equivalents which decreased by 71% to $117.45M; Receivables which increased 69% to $202.47M; and Property, Plant & Equipment which increased 32% to $2.05Bn. Total Liabilities rose 23% to $1.6Bn with the largest movements in liability items in Income & Mining Taxes Payable which was down 43.6% to $25.9M; Provisions which increased 67% to $141.63M; and Net Deferred Tax Liabilities which rose 16% to $325.11M.

Operational Performance

Champion Iron produced 13.8M wmt of high-grade iron ore concentrate for the year ended March 31, 2025, compared to 14.2M wmt the previous year. Production was impacted by approximately one week of losses following the preventive evacuation of Bloom Lake’s facilities in July 2024 due to nearby forest fires.

The company mined and hauled 76.5M tonnes of material during the year, up 16% from the previous year, resulting in a stripping ratio of 0.92. Bloom Lake processed 39.7M tonnes of ore, slightly lower than the previous year, with an iron ore head grade of 29.2% and an Fe recovery rate of 78.9%.

During the year, the company acquired 400 railcars to improve their rail shipment flexibility, the acquisition was entirely financed through a long-term loan. 240 railcars with a net book value of $40,865 were leased under an operating lease contract.

Sustainability Efforts

Champion Iron is committed to sustainable practices and aims to support the global transition to a low-carbon economy. The company maintained a 99% water reuse rate and achieved an 8.7% year-over-year reduction in water consumption per tonne of iron ore concentrate produced.

Greenhouse gas (GHG) emissions per tonne of material mined and hauled were reduced by 15% year-over-year. The company launched the Kapatakan initiative, an immersive cultural program fostering connections between the Innu community and the company’s workforce, with the participation of 89 employees.

The company qualified for a government grant up to $21,817, payable in multiple advances, in relation to energy consumption reduction initiatives under certain conditions. The company met the construction timeline milestone and must reach gas emission reduction targets over a period of 10 years.

Growth & Development Initiatives

Champion Iron is investing $470.7M to upgrade half of Bloom Lake’s mine capacity to a direct reduction quality pellet feed (DRPF) product grading up to 69% Fe, one of the highest purity iron ores in the world.

The project, designed to be carbon neutral, will further enable the company to align with the green steel transition and meet the rising demand for direct reduced iron (DRI) globally. The company received additional allocation of renewable hydroelectric power from Hydro-Québec to support its growth initiatives and contribute to efforts to reduce carbon emissions over time.

Financing

Champion Iron signed a US$400M general purpose Revolving Facility with various lenders, which originally matured on March 31st, 2025, but has been extended to November 2027. They also completed a new US$230M 5-year Term Loan with the same group of lenders. They used the proceeds from the Term Loan to repay the US$180M Revolving Facility outstanding balance at the transaction date. During the period, the company drew US$50M on the Revolving Facility.

On April 1, 2021, the Company signed an agreement with Caterpillar Financial Services Ltd to finance mining equipment required for the Bloom Lake expansion for a facility of up to US$75M and available until March 31, 2023. Over the years, the facility was increased by US$73M and the availability period extended to July 2025.

Champion Iron continues to demonstrate resilience and operational excellence in the high-purity iron ore industry. With significant investments in growth projects, a commitment to sustainability, and a strong management team, the company is well-positioned to support the global transition to green steelmaking and deliver positive outcomes for local communities, shareholders, and all stakeholders.