• Quarterly Revenue: Approximately $350 million.

• EBITDA: Just shy of $75 million.

• Earnings Per Share (EPS): $0.04 per share.

• Production: Produced about 3.17 million tonnes; sold just over 3.25 million tonnes.

• Realized Selling Price: CAD107 per tonne delivered in the vessel.

• Operating Costs: Slightly higher due to lower production and back-to-back plant shutdowns.

• Cash Balance: Reduced slightly due to semiannual dividend payment and $65 million investment in the flotation plant.

• Semiannual Dividend: $0.10 per share.

• Provisional Price Adjustment: Negative impact of $5 per tonne due to a $17 million adjustment.

• Warning! GuruFocus has detected 5 Warning Signs with CIAFF.

Release Date: October 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Champion Iron Ltd (CIAFF) successfully managed forest fires near Bloom Lake, minimizing production impact.

• The company reported no significant workplace incidents or environmental issues during the quarter.

• Champion Iron Ltd (CIAFF) initiated a new program to strengthen partnerships with local First Nations communities.

• The company is on track to deliver its flotation plant project on time and on budget, with most high-risk items completed.

• Champion Iron Ltd (CIAFF) declared its seventh consecutive semiannual dividend, maintaining a robust balance sheet.

Negative Points

• Production was significantly impacted by forest fires and back-to-back major shutdowns of plant one and plant two.

• The P65 index decreased by over 9% due to weakened global steel demand, affecting realized selling prices.

• Operating costs increased due to lower production volumes and the complexity of back-to-back shutdowns.

• The company faced logistical challenges, with rail capacity not yet robust enough to handle full production volumes.

• Champion Iron Ltd (CIAFF) experienced a negative provisional price adjustment, impacting realized selling prices by about $5 per tonne.

Q & A Highlights

Q: Can you provide more visibility on the railroad's current logistics capabilities and its impact on production volume? A: David Cataford, CEO, explained that while there have been improvements, the rail line lacks robustness to consistently handle operational issues. The addition of new locomotives by year-end should enhance capacity and reliability, allowing for better handling of production volumes and stockpile reduction.

Q: Regarding the DRPF project, when can we expect clarity on pricing mechanisms and customer commitments? A: David Cataford, CEO, stated that by the end of next summer, they expect to have a clear view on customer commitments and pricing formulas. The goal is to decouple from the P65 index and benefit from DR-grade premiums, which are expected to recover with increased DRI capacity.