Champion Iron Reports CAD 102.9M Net Income, Advances Kami Project with Nippon Steel

Financial Performance Highlights

Champion Iron Limited released its condensed interim consolidated financial statements for the three and nine-month periods ended December 31, 2024, reporting revenues of CAD 1.18 billion for the nine months, a slight decrease compared to CAD 1.19 billion in the prior year. Net income for the period was CAD 102.9 million, down from CAD 208.4 million in the same period last year, reflecting increased costs and investments associated with the company’s expansion initiatives.

The company’s iron ore concentrate segment remains the core revenue driver, benefiting from the high-grade quality of its Bloom Lake Mining Complex products, which command a premium over benchmark iron ore prices. Despite a challenging pricing environment, Champion maintained strong operational performance with gross profit of CAD 297.5 million for the nine months.

Strategic Partnership and Project Development

In a significant development, Champion Iron entered into a binding agreement in December 2024 with Nippon Steel Corporation and Sojitz Corporation to form a partnership aimed at advancing the Kami Project. This partnership includes a $245 million contribution from the partners for a 49% stake, with all project costs to be shared pro-rata. The agreement marks a pivotal step towards the completion of a definitive feasibility study and potential commercial production, positioning Champion to expand its footprint in the direct reduction quality iron ore market.

The Kami Project, located near Bloom Lake, is expected to produce approximately 9 million wet metric tonnes annually of premium iron ore concentrate grading above 67.5% Fe. This aligns with global demand trends favoring low-contaminant, high-grade iron ore suitable for environmentally friendly steelmaking processes.

Capital Structure and Investments

Champion’s balance sheet reflects increased capital expenditures, notably the acquisition of 400 railcars financed through a new Railcars Loan facility, and ongoing investments in the DRPF Project to upgrade mine capacity. Long-term debt rose to CAD 712.6 million net of transaction costs, supported by senior credit facilities and equipment financing. The company continues to meet all operational and financial covenants.

Environmental commitments also impacted the financials, with Champion recording the full compensation plans’ obligation related to its tailings and waste rock storage expansion. This provision, estimated at CAD 46.6 million, underscores the company’s adherence to regulatory requirements and sustainable mining practices.

Outlook and Market Position

Champion Iron’s strategic moves and financial discipline position it well to capitalize on the evolving iron ore market, particularly the growing demand for direct reduction pellet feed. The partnership with Nippon Steel and Sojitz not only brings financial backing but also technical expertise, enhancing the prospects for the Kami Project’s successful development.

While near-term earnings reflect increased costs and cautious pricing adjustments, the company’s investments in infrastructure and product quality upgrades are expected to drive long-term value creation. Investors will be watching closely for updates on the feasibility study and project milestones.