Champion Iron Limited reported robust Q3 FY2026 results with record sales and ongoing progress on its DRPF project, while launching a significant acquisition offer for Rana Gruber.
- Quarterly production steady at 3.7 million wmt high-grade iron ore concentrate
- Record quarterly sales of 3.9 million dmt, generating $472 million revenue
- DRPF project commissioning underway, targeting first shipments by mid-2026
- Cash tender offer announced to acquire Rana Gruber with financial backing
- Strong mining performance and reduced inventory levels at Bloom Lake
Operational Highlights and Market Performance
Champion Iron Limited has delivered a solid operational and financial performance in its third quarter of fiscal 2026, maintaining steady production of 3.7 million wet metric tonnes (wmt) of high-grade iron ore concentrate. The company achieved record sales volumes of 3.9 million dry metric tonnes (dmt), an 18% increase year-over-year, which translated into revenues of $472 million and a net income of $65 million. Despite a slight 6% quarter-over-quarter dip in net average realised selling price, the company’s pricing remains robust, supported by a premium for its high-purity product.
Mining operations at the Bloom Lake mine in Québec showed marked improvement, with material mined and hauled increasing by 13% compared to the prior year. This was driven by enhanced equipment utilisation and availability, alongside strategic operational adjustments to mitigate ore hardness challenges. Inventory management also improved, with iron ore concentrate stockpiles at Bloom Lake reduced by 1.1 million wmt to 0.6 million wmt, despite disruptions from a third-party train derailment and port equipment breakdowns.
Progress on the DRPF Project and Growth Initiatives
The company’s flagship Direct Reduction Pellet Feed (DRPF) project is advancing as planned, with mechanical commissioning underway and initial commercial shipments expected by the end of the first half of 2026. This project aims to upgrade half of Bloom Lake’s capacity to produce iron ore concentrate with up to 69% iron content, targeting the growing demand for direct reduction iron ore in steelmaking. Cumulative investments in the DRPF project have reached $440.5 million, aligning with the inflation-adjusted budget of approximately $471 million.
Champion is also progressing the definitive feasibility study (DFS) for the Kami Project, in partnership with Nippon Steel and Sojitz, with completion anticipated by the end of 2026. This initiative is expected to further diversify and strengthen the company’s portfolio of high-purity iron ore assets.
Strategic Acquisition and Financial Position
In a significant strategic move, Champion announced a conditional cash tender offer to acquire Rana Gruber ASA, a Norwegian high-grade iron ore producer, at an implied equity value of approximately US$289 million. The acquisition is supported financially by La Caisse through an equity private placement and a new term loan commitment from Scotiabank. This deal, if completed, would broaden Champion’s geographic footprint and product offering, reinforcing its position in the premium iron ore market.
Financially, Champion maintains a strong liquidity position with available liquidity of $751 million as of December 31, 2025, despite capital expenditures and dividend payments. The company’s cost management remains disciplined, with a C1 cash cost of $73.9 per dmt, down 3% quarter-over-quarter, and an all-in sustaining cost (AISC) of $89.7 per dmt, reflecting operational efficiencies and higher sales volumes.
Outlook and Market Positioning
Champion’s CEO, David Cataford, emphasised the company’s focus on unlocking value through strategic initiatives, including the ramp-up of DRPF production and the potential Rana Gruber acquisition. The company is actively engaging with prospective customers in new markets such as the Middle East and North Africa, anticipating pricing premiums for its DR quality iron ore. As the multi-year capital investment cycle at Bloom Lake nears completion, Champion is evaluating further growth opportunities and capital allocation strategies to optimise shareholder returns.
Bottom Line?
With DRPF commissioning on track and a transformative acquisition offer underway, Champion Iron is poised for a pivotal growth phase in the high-purity iron ore sector.
Questions in the middle?
- Will the Rana Gruber acquisition close as planned, and how will integration impact operations?
- How will the DRPF project ramp-up affect production volumes and pricing premiums in FY2027?
- What inventory management strategies will Champion deploy to optimise port and mine stockpiles amid shifting product mixes?