Operations

Record quarterly production of 2,189,700 wet metric tonnes ("wmt") of high-grade 66.3% Fe iron ore concentrate or 10.1% higher than previous quarterly record;

Record quarterly recovery rate of 83.9%; and

Total cash cost1 of $48.3/dry metric tonne ("dmt") (US$36.6/dmt), 11% lower than previous quarter results.

Financial

Revenues of $160.4M for the second quarter, net of a provisional sales adjustment of $34.7M;

Record quarterly cash flow from operations of $104.9M, representing cash flow per share of $0.24;

EBITDA1 totalling $62.6M or 39% EBITDA1 margin;

Net loss of $1.7M for the second quarter and $0.00 of earnings per share;

Adjusted net income1 of $50M for the second quarter and $0.11 of adjusted earning per share1; and

Generated $75M in cash during the quarter, resulting in cash on hand2 of $211.0M as at September 30, 2019.

Growth

Successfully completed the previously announced transaction with CDP Investissements Inc., a subsidiary of Caisse de dépôt et placement du Québec for a preferred share offering of $185M in addition to a US$200M credit facility with The Bank of Nova Scotia and Société Générale as lead arrangers;

Now the 100% owner of the Bloom Lake mine further to the completion of the previously announced transaction with the government of Québec, through its agent Ressources Québec Inc. ("RQ"), to acquire RQ's 36.8% equity interest in Québec Iron Ore ("QIO") for a total cash consideration of $211M;

Previously approved work program of $68M on Phase II to secure the timetable detailed by the feasibility study filed on SEDAR on August 2, 2019, progressing on schedule and on budget; and

The Company conducted a drilling campaign at its Bloom Lake property to improve ore characterization and a geophysical survey on the Roach Hill property.

"This quarter represents an important milestone for our Company. We now have 100% ownership of our flagship asset and have repositioned our capital structure, which significantly reduces our debt carrying costs", commented David Cataford, Champion's CEO. "While our team continues to demonstrate their operational excellence, our high-quality product remains in strong demand globally. With access to decades of resources, we are well positioned to leverage the support of our financial and regional partners as our Company implements its growth initiatives."

Operational Performance

During the three-month period ended September 30, 2019, 9.0 million tonnes of material was mined, representing an increase of 10% compared to the same quarter of the prior year. This increase was enabled by higher mining equipment availability and a higher utilization rate, attributable to the Company's progress with its mining equipment rebuilding program. The mining operations continuous improvement plan reduced the trucking cycle time which contributed positively to volume mined.

The plant processed 5,450,800 tonnes of ore during the second quarter compared to 4,964,200 tonnes in the comparable prior year period. The 10% increase relates to the higher average hourly mill throughput and the higher iron recovery, further to the implementation of operational innovations in the previous quarter, designed to increase plant capacity, reliability and performance.

The Company achieved an average recovery rate of 83.9% during the second quarter, compared to 79.5% in the same period of the prior year. The improvement relates to the continuous optimization of the recovery circuit, in addition to preventive works completed earlier this year, which produced a more stable recovery rate, fluctuating from 83.5% to 84.4% during the quarter. The quarterly recovery rate achieved during the period set a new historical record for Bloom Lake which was first commissioned in 2010.

Based on the foregoing, Bloom Lake produced 2,189,700 wmt of 66.3% Fe high-grade iron ore concentrate during the three-month period ended September 30, 2019, compared to 1,858,300 wmt in the same period of the prior year, representing an 18% increase. 

In addition to the new hourly mill throughput and recovery rate records achieved during the quarter, the Bloom Lake product quality specifications continue to meet or exceed benchmarks and significantly, to date, the Company has not been assessed any penalties in connection with product quality.

The Company mined 17,652,100 tonnes of material during the six months ended September 30, 2019, compared to 16,204,100 tonnes in the same period in the prior year. The increase is attributable to the improvement in mining equipment reliability and increased productivity resulting from the rebuilding program.

The plant processed 10,230,800 tonnes of ore during the six months ended September 30, 2019. During the first half of the current fiscal year, the recovery circuit continues to be optimized, whereby the Company achieved a 79.4% recovery rate at the beginning of the year compared to a recovery rate of 83.9% for the quarter ended September 30, 2019. Overall, year to date, the Company has achieved an average recovery rate of 83.1%. The Bloom Lake plant has demonstrated that the current recovery rate is a sustainable rate that can be maintained or possibly increased over the long-term.

Based on the foregoing, Bloom Lake produced a total of 4,179,100 wmt of Fe 66.3% as at September 30, 2019. These results established a new bi-annual production record for the Bloom Lake Mine.

 T1: Financial and Operating Highlights

Related Link: Official Document