Champion Iron Ltd Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Orest Wowkodaw - Scotiabank - Analyst : Just can you please give us a bit more visibility on the capabilities of the railroad right now in terms of logistics? You mentioned that the rail line is not going to get more locos until end of year commissioning in Q1. Railcars are being added, I guess, over the coming weeks. What does that actually mean for current capacity? I mean, if I think about your annual production volume, we're talking about 3.7 million to 3.8 million tonnes a quarter to be shipped. Can the rail line currently move that kind of volume? Or is that going to still take a couple of quarters to get to your full production run rate from a volume shipping perspective?

Question: Orest Wowkodaw - Scotiabank - Analyst : Okay. Maybe I could ask in a different way. Assuming Bloom Lake recovers from an operational perspective here in the calendar fourth quarter, do you think you can actually destock any incremental tonnes beyond production levels?

Question: Orest Wowkodaw - Scotiabank - Analyst : Okay. So if you're producing at full capacity, don't expect much destocking, call it, near term. It might take a bit longer? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / 1:00PM, CIA.AX - Q2 2025 Champion Iron Ltd Earnings Call

Question: Craig Hutchison - TD Cowen - Analyst : I just wanted to ask on the DRPF project. You guys noticed -- you mentioned you're having active discussions with prospective customers in Europe. But when can we get a sense in terms of what that pricing mechanism is? And is your anticipation to have the material largely locked up before commissioning starts?

Question: Craig Hutchison - TD Cowen - Analyst : Okay. And how long do you think that the commissioning process will take in terms of getting up to full capacity?

Question: Craig Hutchison - TD Cowen - Analyst : Okay. Great. And maybe one last question from me. There's obviously a lot of money spent on other capital items at Bloom Lake this quarter. Some of that, I think, is related to your desire to kind of push capacity beyond the sort of 15 million tonnes. When, in your opinion, should we start factoring in higher production from Bloom Lake based on the investments you guys have made to date and kind of going forward? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / 1:00PM, CIA.AX - Q2 2025 Champion Iron Ltd Earnings Call

Question: Alexander Pearce - BMO - Analyst : (technical difficulty) you flagged that it has come down a little bit recently on -- and it looks like it's on ore hardness. So I was just wondering whether you can provide a bit more of an update on how you expect that to continue over the next kind of couple of quarters. Should we expect that to stay for the next couple of periods? Or could it be a little bit longer before we see recoveries back up into the kind of 80% range?

Question: Alexander Pearce - BMO - Analyst : And then the second question, just in terms of (technical difficulty) a little bit during the quarter. I was just wondering maybe you can just talk about what you're seeing in the market for that premium that you're getting above the benchmark. And given iron ore prices came back up again right at the end of the quarter, have you seen the premium expand back again?

Question: Lucas Pipes - B. Riley - Analyst : My first question is on the cost side. Could you provide a little bit of an outlook? You just touched on recoveries, but also from a stripping ratio perspective and over the next couple of quarters, where would you anticipate costs to come in on a cash cost basis?

Question: Lucas Pipes - B. Riley - Analyst : And could you remind us what is the cost associated with that stockpile movement roughly?

Question: Lucas Pipes - B. Riley - Analyst : So some of that you would incur no matter what, but there's a portion of that CAD8 that might be unique to this environment of higher stockpiles. Is that a reasonable intuition?

Question: Lucas Pipes - B. Riley - Analyst : Got it. So that CAD8 is entirely kind of unique to this moment. That's helpful.

Question: Lucas Pipes - B. Riley - Analyst : Very helpful. And I hope that the rail situation improves, as you outlined earlier. David, a higher-level question on the investment climate and appetite in iron ore. Simandou coming online late 2025, lots of headlines around China's transition. Rio Tinto is investing in lithium. Do we need more iron ore in your opinion? Or how would you frame that?

Question: Stefan Ioannou - Cormark Securities - Analyst : Just maybe just I wanted to delve a bit more into the minutia of Craig's question about the CapEx. You mentioned the waste dumps and the tailings. Just thinking about sustaining versus growth CapEx and the growth number -- and both went up sort of notably quarter-over-quarter. In the growth number, would some of the railcar purchases be embedded in that number, too? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / 1:00PM, CIA.AX - Q2 2025 Champion Iron Ltd Earnings Call

Question: Stefan Ioannou - Cormark Securities - Analyst : Okay. I guess, I'm focusing on the growth CapEx outside of the DRPF project.

Question: Stefan Ioannou - Cormark Securities - Analyst : Okay. But I guess -- sorry. Maybe to just put it another way, I'm thinking about the quarter past, though, like it went up notably from calendar Q2 to calendar Q3. So I'm just wondering what's in that growth number versus what's in the sustaining number from the quarter you just reported?

Question: Stefan Ioannou - Cormark Securities - Analyst : Okay. Maybe I'll circle around you guys after the call because I'm still confused here. There's -- you have another growth item beyond the DRPF in the statements. I'm just trying to reconcile that. That's all.