Champion Iron (ASX: CIA) – Q2 FY2027 Investor Presentation Materials

Champion Iron completed its Direct Reduction Pellet Feed (DRPF) project on budget at $500 million and shipped its inaugural commercial cargo during the September quarter, marking a crucial transition for the Bloom Lake operation. The company now operates two production plants at the facility, with the original high-purity hematite plant running alongside the newly commissioned DRPF line, which is designed to produce 69% iron content concentrate and pellet feed product. This structural upgrade positions Champion to participate in an industry shift toward higher-purity materials as steelmakers increasingly move to direct reduction and electric arc furnace production methods.

The quarter’s results present a mixed picture typical of a major project transition. Consolidated sales jumped 35% quarter-over-quarter to a record 4.5 million tonnes, driven by strong volumes at both Bloom Lake and the Rana Gruber operation acquired in April. However, production dipped 2% to 3.9 million tonnes of wet metric tonnes as DRPF commissioning and planned maintenance consumed operational focus. The DRPF plant produced 0.6 million tonnes during the quarter while product quality moved progressively closer to target specifications, with Bloom Lake’s weighted average iron grade increasing to 66.7% from 66.5% year-on-year. These production challenges contributed to total cash costs of $82.90 per tonne sold and all-in sustaining costs of $97.90 per tonne sold.

The current operating environment remains pressured by softer iron ore prices and elevated freight costs, which company management notes have reached historically abnormal levels relative to commodity pricing. Quarterly revenues of $403.9 million translated to adjusted EBITDA of just $23.3 million and an adjusted loss per share of $0.06, as iron ore prices averaged US$105.50 per tonne compared to the P65 index average of US$112.80 during the quarter. Freight costs spiked to US$40.40 per tonne, reflecting disruptions including the Middle East conflict and increased tonne-mile demand. The company’s balance sheet shows total debt of $1,303.1 million against cash of $214.4 million, requiring careful capital allocation as it navigates DRPF ramp-up.

The strategic value lies in what comes next. Management secured additional test cargoes and commercial agreements for third-quarter shipments, signaling early customer acceptance. The DR pellet premium, which reflects scarcity of supply-appropriate material, has increased in recent months despite the softer iron ore backdrop. As DRPF ramps toward full capacity toward the end of the 2027 financial year, the product mix shift should improve net realized prices and earnings power, though timing remains dependent on market conditions and successful capacity utilization.

Investors should watch the progression of test cargoes converting into sustained commercial orders, the trajectory of DRPF ramp rates and product quality consistency, and whether freight and iron ore price normalization materialize. The company’s cumulative investment at Bloom Lake has reached approximately $6.7 billion, and near-term cash generation remains constrained, making execution critical. This announcement is price sensitive and has been flagged as material by the ASX.

View the full ASX announcement (PDF)

About Champion Iron Limited (ASX: CIA)

Champion Iron Ltd is an iron ore mining company with operations in Canada and Norway. The company owns and operates the Bloom Lake Mine in Quebec, Canada, which produces high-grade iron ore concentrate using renewable hydroelectric power, and Rana Gruber in Norway. It sells iron ore concentrate globally to customers across China, Japan, Europe, India, South Korea, and other markets.

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