Operations
-
Operations at Bloom Lake resumed
full operational capacity in the recently completed
quarter, following the Government's announcement to
categorize mining activities as a “priority service”
and the lifting of specific COVID-19 containment
directives issued in the first quarter of the
Company's fiscal year ending March 31, 2021;
-
Production of 2,268,800 wet
metric tonnes (“wmt”) of high-grade 66.1% Iron ore
(“Fe”) concentrate for the three-month period ended
September 30, 2020, compared to 2,189,700 wmt of
high-grade 66.3% Fe concentrate for the same period
in 2019. Production of 4,067,600 wmt of high-grade
66.3% Fe concentrate for the six-month period ended
September 30, 2020, compared to 4,179,100 wmt for
the same period in 2019;
-
Recovery rate of 85.2% and 83.8%
for the three and six-month periods ended September
30, 2020, respectively, compared to a recovery rate
of 83.9% and 83.1%, respectively, for the same
periods in 2019; and
-
Free On Board (“FOB”) total cash
cost1 of $48.5/dry metric tonne (“dmt”)
(US$36.4/dmt) (“Total Cash Cost” or “Cash Cost”) and
$53.1/dmt (US$39.1/dmt) for the three and six-month
periods ended September 30, 2020, respectively,
compared to $48.3/dmt (US$36.6/dmt) and $51.4/dmt
(US$38.7/dmt), respectively, for the same periods in
2019.
Other
Developments
-
In connection with Bloom Lake's
Phase II expansion project, which proposes to double
Bloom Lake's nameplate capacity to 15 Mtpa, the
Company increased the Phase II cumulative budget by
an additional $22M, for a total budget of $120M, in
order to prudently advance the project and preserve
key timelines ahead of the deferred final Board of
Directors (the “Board”) decision on the Phase II
expansion. The Company will communicate its
development plans with regards to the Phase II
expansion project by the end of the current calendar
year;
-
Appointment of Alexandre Belleau
as Chief Operating Officer on July 22, 2020;
-
Appointment of Louise Grondin to
the Board at the Annual General Meeting of the
Company's shareholders on August 27, 2020; and
-
Completed a virtual platform
presenting a 360 degree view of the Company’s mining
operations and related infrastructure, currently
available on the Company’s website at
www.championiron.com.
“Our team’s
agility in adapting operations is unlocking the full
potential of our flagship Bloom Lake Mine, resulting in
record quarterly production and financial results for
our Company. I am proud to be leading such a highly
motivated workforce, dedicated to the success of our
Company, despite the challenging environment created by
the COVID-19 pandemic. As our focus remains the safety
and well-being of our employees, partners and
communities, we continue to enforce strict COVID-19
related measures and look forward to deploying our
recently delivered rapid testing solution in our
continuous effort to mitigate the pandemic related
risks. With our cash on hand rapidly growing, our
Company continues to diligently advance the Phase II
expansion project, increasing the cumulative budget to
$120M, which is expected to further de-risk the
project”, commented David Cataford, Champion's CEO.
BLOOM LAKE
MINE OPERATING ACTIVITIES
|
3Q2020 |
3Q2019 |
Variance % |
9M2020 |
9M2019 |
Variance % |
Operating Data |
|
|
|
|
|
|
Waste mined (wmt) |
4,114,400 |
3,572,200 |
15 |
6,727,200 |
7,153,100 |
-6 |
Ore mined (wmt) |
6,070,000 |
5,393,900 |
13 |
10,752,600 |
10,499,000 |
2 |
Material mined (wmt) |
10,184,400 |
8,966,100 |
14 |
17,479,800 |
17,652,100 |
-1 |
Strip ratio |
0.7 |
0.7 |
— |
0.6 |
0.7 |
-14 |
Ore milled (wmt) |
5,562,600 |
5,450,800 |
2 |
10,167,200 |
10,230,800 |
-1 |
Head grade Fe (%) |
30.9 |
32.3 |
-4 |
31.1 |
32.4 |
-4 |
Recovery (%) |
85.2 |
83.9 |
2 |
83.8 |
83.1 |
1 |
Product Fe (%) |
66.1 |
66.3 |
— |
66.3 |
66.3 |
— |
Iron ore concentrate produced (wmt) |
2,268,800 |
2,189,700 |
4 |
4,067,600 |
4,179,100 |
-3 |
Iron ore concentrate sold (dmt) |
2,063,400 |
1,860,400 |
11 |
3,822,200 |
3,767,100 |
1 |
Financial Data
(in thousands of dollars) |
|
|
|
|
|
|
Revenues |
310,994 |
160,370 |
94 |
555,568 |
438,284 |
27 |
Cost of sales |
100,068 |
89,921 |
11 |
202,844 |
193,528 |
5 |
Cost of sales - incremental costs related to
COVID-19 |
2,671 |
— |
— |
7,233 |
— |
— |
Other expenses |
10,426 |
7,874 |
32 |
19,967 |
15,245 |
31 |
Net finance costs |
3,387 |
46,433 |
-93 |
2,065 |
75,485 |
-97 |
Net income (loss) |
112,164 |
-1,726 |
-6,598 |
187,720 |
72,515 |
159 |
EBITDA |
197,829 |
62,575 |
216 |
325,524 |
229,511 |
42 |
Statistics
(in dollars per dmt sold) |
|
|
|
|
|
|
Gross average realized selling price |
162.8 |
140.3 |
16 |
156.6 |
149.7 |
5 |
Net average realized selling price |
150.7 |
86.2 |
75 |
145.4 |
116.3 |
25 |
Total cash cost (C1 cash cost) |
48.5 |
48.3 |
— |
53.1 |
51.4 |
3 |
All-in sustaining cost |
57.4 |
66.2 |
-13 |
60.8 |
64.5 |
-6 |
Cash operating margin |
93.3 |
20 |
367 |
84.6 |
51.8 |
63 |
Operational
Performance
On March 24,
2020, the Company announced the ramp down of its
operations following directives from the Government in
response to the COVID- 19 pandemic, which required
mining activities to be reduced to a minimum within the
province of Québec. As announced by the Company on April
23, 2020, operations gradually ramped up, following the
Government's announcement that mining activities were to
be considered a “priority service” in Québec. Although
the Company was operating at a minimal capacity for a
period of time and its activities at the mine were
disrupted, early actions implemented by Management in
response to the COVID-19 pandemic minimized its impacts
on operations. Despite disruptions to operations, the
Company produced nearly 4.1 million wmt of high-grade
iron ore concentrate during the six-month period ended
September 30, 2020, which is approximately 8% above
Bloom Lake's current nameplate capacity.
i. Second
Quarter of Fiscal Year 2021 vs Second Quarter of Fiscal
Year 2020
During the
three-month period ended September 30, 2020, 10,184,400
tonnes of material were mined, compared to 8,966,100
tonnes for the same period in 2019, representing an
increase of 14%. This increase in material mined is the
result of higher equipment availability and utilization
rate, additional equipment and better ore accessibility.
The Company benefited from its previous and continuous
investments in the mining equipment rebuild program,
enabling it to maximize productivity when operational
flexibility is required due to ongoing pandemic-related
conditions.
The plant
processed 5,562,600 tonnes of ore during the three-month
period ended September 30, 2020, compared to 5,450,800
tonnes for the same period in 2019, representing an
increase of 2%. The higher throughput resulted from
higher mined ore availability and higher mill
utilization rate. During the quarter, the Company fully
used its two production lines, compared to only one
production line for the previous quarter, further to the
Government's COVID-19 imposed ramp-down. The
improvements and operational innovations implemented
during the fiscal year ended March 31, 2020 allowed the
Company to increase throughput stability and reach a
higher level of mill productivity, despite the
inefficiencies created by COVID-19, which allowed the
Company to take advantage of the elevated iron ore
price.
The iron ore
head grade in the three-month period ended September 30,
2020 reached 30.9%, compared to 32.3% for the same
period in 2019. The decrease in head grade is
attributable to the presence of some lower grade ore
being sourced and blended from different pits, when
compared to the prior year. This is in line with the
mining plan and the life of mine head grade average.
The Company
achieved an average recovery rate of 85.2% during the
three-month period ended September 30, 2020, compared to
a recovery rate of 83.9% for the same period in 2019,
which is attributable to higher recovery circuit
stability.
Based on the
foregoing, Bloom Lake achieved a new quarterly
production record with 2,268,800 wmt of 66.1% Fe
high-grade iron ore concentrate produced during the
three-month period ended September 30, 2020, an increase
of 4%, compared to the previous quarterly production
record of 2,189,700 wmt for the same period in 2019. The
higher production, surpassing nameplate capacity, is
mainly a result of higher ore mined and higher
throughput, combined with a higher average recovery
rate, despite being partially offset by a lower head
grade. The variation between iron ore concentrate
produced and sold during the quarter is due to the
timing of shipments.
ii. First
Six Months of Fiscal Year 2021 vs First Six Months of
Fiscal Year 2020
The Company
mined 17,479,800 tonnes of material during the six-month
period ended September 30, 2020, compared to 17,652,100
tonnes for the same period in 2019. The plant processed
10,167,200 tonnes of ore during the six-month period
ended September 30, 2020, a decrease of 1% over the same
period in 2019, while the recovery rate improved from
83.1% to 83.8%, in line with the Company’s target. Based
on the foregoing, Bloom Lake produced a total of
4,067,600 wmt of Fe 66.3% high-grade iron ore
concentrate during the six-month period ended September
30, 2020, compared to 4,179,100 wmt for the same period
in 2019.
During the first
quarter of the 2021 fiscal year, the COVID-19 pandemic
had a negative impact on several of the Company's
activities, including: reduced mining activities due to
the compliance with the public health directives issued
by the Government; reduced equipment maintenance due to
COVID-19-related resource limitations, which had adverse
repercussions on equipment availability; the arrival of
the seasonal workforce, which required integration and
training; and the operation of only one of the Company's
two production lines for a period of time stemming from
the Government's COVID-19-related directives. Once the
governmental restrictions were lifted, the Company
accelerated its mining activities and surpassed its
plant nameplate capacity for the six-month period ended
September 30, 2020. The capital expenditures made in the
mining equipment rebuild program along with the
improvements and operational innovations accomplished at
the plant in the past have maximized current
productivity.
During the
six-month period ended September 30, 2020, the Company
received a confirmation that its initial commercial
production test last year qualified as Direct Reduction
(“DR”) from DR pellet producers and direct reduced iron
(“DRI”) plant operators. With this confirmed product
specification, the Company produced an additional
207,900 wmt of DR quality iron ore concentrate at 67.8%
Fe with a combined silica and alumina content of 2.68%,
at the request of a customer in the Middle East. This
second shipment confirms the ability of the Company to
sell its ore to producers of DR pellets, which can be
converted by DRI producers and utilized in electric arc
furnaces, which represent a growing subset of global
steelmaking capacity. This positions the Company to
potentially increase its customer base and confirms that
Bloom Lake is one of the few producing deposits globally
that can transition its product offering in response to
potential shifts in steelmaking methods in the coming
years.
More Info:
Champion Iron’s 3Q2020 Report |