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Champion Iron Limited (TSX: CIA, ASX: CIA, OTCQX: CIAFF): Operates Very Profitable Iron Ore Mine in the North of Quebec, Canada Produces 8 Million Tons of High-Grade Iron Ore Per Year, Planning on Doubling Production by Mid-2022; David Cataford, CEO

on 5/21/2021
Champion Iron Limited (TSX: CIA, ASX: CIA, OTCQX: CIAFF) is exclusively an iron ore exploration and development company, with major projects in the southern Labrador Trough, Canada’s largest iron ore producing region. We learned from David Cataford, who is CEO of Champion Iron, that they operate an iron ore mine in the North of Québec, Canada, and produce around 8 million tons of high-grade iron ore per year, while working to double their production to keep up with the rising demand for high-purity iron ore by steelmakers. The Company expects to complete the expansion by mid-2022 by starting up their second plant, expected to double production to 15 million ton per year. Other near-term plans include delivering a feasibility study on the recently purchased Kamistiatusset (“Kami”) project just a few kilometers away from the Company's operating Bloom Lake Mine.

Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-Chief of Metals News, talking with David Cataford, who is CEO of Champion Iron. Also, we might hear from Michael Marcotte, who is V.P. of Investor Relations. David, could you tell our readers and investors about your vision for your company, an overview of your company and what differentiates your company from others.

David Cataford: We operate an iron ore mine in the north of Québec, Canada. We produce around 8 million tons of high-grade iron ore per year and we're currently working to double our production to 15 million tons of high-grade iron ore per year. What differentiates us is that we're a company that produces exclusively high-grade iron ore. This is one of the materials that is mostly in demand in the steelmaking world as it allows steel makers to reduce their CO2 emissions per ton of steel produced and also helped to increase their productivity. We not only have the opportunity to increase our production to 15 million tons of high-grade iron ore, but we also have decades of resources to be able to produce at this level or to expand in the future.

Dr. Allen Alper: That sounds excellent. I know you've had a great year. I wonder if you could kind of highlight your operating results.

David Cataford: Even during this more difficult COVID year, we've managed to produce in an uninterrupted way during the whole year. We've managed also to hit a record production of 8 million tons run rate during the year. Also, when we look at the iron ore market, we not only benefit from the higher iron ore prices, but because we produce a very high-grade material, we benefit from a premium on top of that iron ore price.

If we look at our results going all the way to December of 2020, we operated less in fiscal year 2020 and an operating cost of roughly about $40 US per ton. If you look at the iron ore price today, we're getting a net of shipping price of roughly $200 US per ton. Accordingly, considering our operating costs, we're making about $160 US per ton of margin in the current market.

Dr. Allen Alper: That sounds excellent. That's really great news for your stakeholders and shareholders. Could you tell our readers and investors what are your plans for 2021?

David Cataford: We're currently working on our expansion, expected to be completed by mid-2022, which will increase our production to 15 million tons of high-grade iron ore concentrate per year. The next step will be to deliver a feasibility study on the recently acquired Kami project that we purchased, which is just a few kilometers away from our operating Bloom Lake mine. We have got a pretty big year ahead of us finishing our expansion, operating through COVID and delivering that feasibility study as we continuously consider growth alternatives within our portfolio. In addition to production volume growth, we are also advancing product development to further enhance its quality, which could also improve our product pricing in the future.

Dr. Allen Alper: Well, it looks like 2021 will be an outstanding year for Champion Iron. Could you tell our readers and investors a little bit about the market you serve?

David Cataford: We sell exclusively high-grade iron ore, we sell to customers around the world, there's significant demand from Asia, so we sell about 50% of our tons into China and about 25% of our tons into Japan. We also sell just over 10% of our material into the Middle East and the rest of our tons are spread around Europe, India, Korea. Producing high-grade material cold open additional markets for us in the future. When considering our ongoing expansion and its sales, we are also working to develop the US market which could potentially allow us to save on freight costs compared to our existing customers.

What our customers like about our material is that not only it is very high purity, but also there's very little contaminants. They typically buy our material to be able to dilute down lower grade iron ores from other mines around the world. We have a niche product that fetches a very high premium in the market and with a rising focus globally to reduce emissions, our product is set to continue receiving robust demand.

Dr. Allen Alper: That sounds excellent. Could you tell our readers and investors about the iron ore market?

David Cataford: The iron ore market is very healthy right now when we look around the world, there's quite a lot of infrastructure projects that have been sanctioned by different governments globally to be able to stimulate their economies. Typically, infrastructure projects require a significant amount of steel. While iron ore prices has been doing very well recently, we see all those sanctioned infrastructure projects supporting demand for steel and iron ore in the near future. Because we produce a very high-grade material, it also allows our clients to lower their CO2 emissions per ton of steel produced.

We're looking at a lot of infrastructure projects, but we're also seeing a lot of governments trying to implement some greener infrastructure projects or stimulate the economy in a greener way. The advantage of the Bloom Lake material being one of the highest-grade materials in the world allows the steel producers to go towards that greener transition. That's why the demand for our type of material is very high. Every tonne of iron ore coming from our operations allows us to significantly contribute to the fight against climate change by helping our customers reduce emissions in the steel making process.

The second interesting thing about the market today, is that not only the demand is very healthy, but there are also no significant new projects that have been sanctioned and that are being worked on around the world apart from a smaller project in Australia. As a conclusion, the demand is very high and there's no new supply that's been sanctioned. One interesting fact is that for a new project to go from being sanctioned to actually being delivered in the iron ore space typically takes between 5 to 14 years to get into production. Since no significant new projects have been sanctioned to date, we're going to see a few years without extra supply in the iron ore space.

Dr. Allen Alper: That sounds excellent. Sounds like Champion Iron and an excellent position to serve the marketplace, which is growing and it seems like the gap between supply and demand is increasing. So that's excellent position to be in.

David Cataford: Correct.

Dr. Allen Alper: Could you tell readers and investors a little bit about your background, your Team and your Board?

David Cataford: I'm a Mining Engineer by trade. I joined Champion in 2014, essentially joined Michael O'Keeffe, our Chairman who had founded the company in 2013. What we set out to do was to secure a significant amount of resources of high-grade iron ore in the Labrador Trough, Canada, which is the second largest hub of high-grade iron ore exporter in the world. With this focus, we managed to secure about 5 billion tons of high-grade resources. Now in production at Bloom Lake, this resource package representing decades and decades of potential production for us.

After securing such a significant resource package, we then grew the team with some mining experts and construction experts as we purchased the Bloom Lake Mine that was idled at the time. We wanted to build a team that could deliver a project on time on budget, which we managed to achieve in 2018. We've been growing ever since. The team that delivered the startup of the Bloom Lake Phase I project is still on board and we're working to deliver the Phase II expansion project that we're working on right now.

We have a very robust team here in Canada delivering our projects. The core of our board of directors has been with us since 2014/2015 and includes strong expertise across many different fields. Recently, we've also announced the addition of Louise Grondin to our board of directors, who used to be with Agnico-Eagle, where she has a very strong ESG and HR background to be able to complement our team. Michael O'Keeffe is our Executive Chairman, he founded the company in 2013 and he's been actively working with us ever since. At the time, he had even moved to Canada with his family to be able to start the company and implement its vision.

Dr. Allen Alper: That sounds like you have a very strong, experienced and accomplished team and board.

David Cataford: Maybe just a little highlight as well, when we talked about being aligned with investors, management and directors own over 11% of the company. So every time we spend one dollar, we spend it as if it's our own, because it kind of is.

Dr. Allen Alper: That sounds excellent. It's good to see that management has such a strong position in the company. Could you tell us a little bit more about your share and capital structure?

David Cataford: We have been aligned with the government of Québec. When we acquired the Bloom Lake Project, the government of Québec became a partner and today owns about 9% of the company. Our major shareholder out of Chicago is Wynnchurch Capital. They've been with us also since the acquisition of Bloom Lake. There are a few family officers that also own roughly about 25% of the shares and the balance is shared with the retail and institutions. We have a very strong shareholder base that continue to support our vision for high-grade iron ore.

Dr. Allen Alper: Well, that sounds excellent. Could you tell our readers and investors what are the primary reasons they should consider investing in Champion Iron?

David Cataford: The story for high grade iron ore is growing every year and has been accelerating in recent years. When we look at the trend in the steel sector, there is a rising focus for going greener. There are limited projects around the world that is able to service that market and make a significant impact on reducing emissions. Not only are we in a very stable jurisdictions in Canada, but we're also one of the only vehicles around the world where someone can actually invest in a pure play high-grade iron ore producer. As such, we are very unique! We are also aligned with investors given our strong ownership in the business and manage the company in a very diligent way.

At the same time, we have a very good growth profile, not only short term, but also medium term. To sum, all of this up, we have a very stable operation offering a unique product that can operate for decades. We've got growth potential in a commodity that is in rising demand fueled by the economic recovery and rising focus to reduce emissions globally.

Dr. Allen Alper: Those are very compelling reasons for our readers and investors to consider investing in Champion Iron. David, is there anything else you'd like to add?

David Cataford: I think we've covered the main areas on what we're doing. We're very excited about the about the coming years and keep growing the company in creative ways for our shareholders. Thanks a lot for giving me the time to discuss with you about Champion and its vision.

Dr. Allen Alper: Well, you have an outstanding company and a great position, great projects, and you're doing a great service to the world, providing high-grade iron.

David Cataford: Thank you very much, sir.

For further information please contact:
Michael Marcotte, CFA
Vice-President, Investor Relations
514-316-4858, Ext. 128

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