Champion Iron Ltd. · ASX:CIA
Champion Iron — Investor Presentation (November 2022)
34 slides from Champion Iron's investor presentation, Nov 10, 2022
Slide 1: ASX Announcement: Investor Presentation
10 November 2022 (Sydney) ASX ANNOUNCEMENT ASX Markets Announcement Office For personal use only Exchange Centre 20 Bridge Street Sydney NSW 2000 BY ELECTRONIC LODGEMENT Investor Presentation Please find attached for release to the market, the Company’s Investor Presentation November 2022. -ENDS- St
Slide 2: Investors Presentation November 2022
INVESTORS PRESENTATION NOVEMBER 2022 For personal use only PREMIUM PRODUCT TIER 1 JURISDICTION HIGH QUALITY INFRASTRUCTURE
Slide 3: Disclaimer
DISCLAIMER TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF This presentation (the "Presentation") contains information about Champion Iron Limited ("Champion" or the "Company"), current as at the date hereof or as at such earlier date as may be specified herein. This Presentation does not constitute or form par
Slide 4: Corporate Overview
CORPORATE OVERVIEW TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF LARGEST PUBLICLY LISTED PURE-PLAY HIGH-GRADE IRON ORE PRODUCER GLOBALLY For personal use only → 2nd largest hub of high-grade exports globally → Access to infrastructure, including renewable hydroelectric power → 10.1% management ownership1 BLOO
Slide 5: Focus on Sustainability
FOCUS ON SUSTAINABILITY TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF For personal use only → No occurrence of major environmental issues since recommissioning the Bloom Lake mine in February 2018 → Learn more about our sustainable practices in our 2021 Sustainability Report available at www.championiron.com
Slide 6: A Global Solution for the Transitioning Steel Industry
For personal use only A GLOBAL SOLUTION FOR THE TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF TRANSITIONING STEEL INDUSTRY
Slide 7: Steel Is Critical for an Energy Transition
STEEL IS CRITICAL FOR AN ENERGY TRANSITION IRON ORE, USED IN STEELMAKING, IS ESSENTIAL FOR LOW CARBON TECHNOLOGIES For personal use only Raw Materials Critical for the Transition to a Low-carbon Economy Geothermal Hydro Nuclear Electricity Bioenergy Concentrated Hydrogen Wind Solar PV Electric Netwo
Slide 8: High-Grade Iron Ore: A Solution for Green Steel
HIGH-GRADE IRON ORE → A SOLUTION FOR GREEN STEEL THE STEEL INDUSTRY WILL NEED TO ADAPT TO LIMIT EMISSIONS For personal use only Mining Freight → The steel industry significantly increased 1% 2% its share of global emissions in the last 20 Agglomeration years and currently represents more than 12% Ag
Slide 9: High Grade Ore Reduces Emissions in Steel Making
HIGH GRADE ORE REDUCES EMISSIONS IN STEEL MAKING STEEL MAKING METHODS AND REQUIRED SUPPLY CHAIN → Champion commercially produces a 66.2% Fe iron ore concentrate and can produce a >67.5% Fe DR quality iron ore concentrate, enabling For personal use only the Company to reduce emissions in the Blast Fu
Slide 10: Significant Impact Towards Reducing Emissions
SIGNIFICANT IMPACT TOWARDS REDUCING EMISSIONS Champion’s concentrate reduces emissions in BF/BOF steel making For personal use only Proven ability to produce DR grade pellet feed enables Champion to engage with DRI/EAF steel makers Compared to Low Grade Iron Ore Compared to BF/BOF Process 15Mtpa 1 6
Slide 11: Embedded Value of High-Purity Iron Ore
EMBEDDED VALUE OF HIGH-PURITY IRON ORE For personal use only 66.2% 69% Fe Fe BF/BOF Process DRI/EAF Process 1.9M tonnes CO2 eq/year = US$226M in value/year1 9.7M tonnes CO2 eq/year1 = US$1,152M in value/year1 EU EMISSION TRADING SYSTEM FORWARD CURVE (EUR/MT CO2) € 140 € 120 → Carbon emission forward
Slide 12: Green Steel Transition Underway
GREEN STEEL TRANSITION UNDERWAY NEW EAF CAPACITY TO INCREASE DEMAND FOR DRI For personal use only → The steel industry is transitioning from Blast Furnaces (BF) to Electric Arc Furnaces (EAF) to reduce emissions → Direct Reduced Iron (DRI) is a high Fe, low residual metallic material used as a sourc
Slide 13: DRI Growth Compares Favourably with Other Metals
DRI GROWTH COMPARES FAVOURABLY WITH OTHER METALS AN EXPECTED TRANSITION FOR THE STEEL INDUSTRY WILL INCREASE DEMAND FOR DRI For personal use only Metal Demand METAL DEMAND GROWTH BY 2050 Growth EXPECTEDbyBY2050 Expected by a Global Energy Transition A GLOBAL ENERGY TRANSITION (AET 2.0C SCENARIO)* (A
Slide 14: Bloom Lake's Market Leading Products
BLOOM LAKE’S MARKET LEADING PRODUCTS SINTER FEED SINTER FEED AVERAGE FE % AVERAGE GANGUE % For personal use only 63.9% 62.9% 1.9% 1.7% 1.7% 61.9% 5.2% 4.1% 4.1% 1998 2010 2019 1998 2010 2019 Silica Alumina SUMMARY OF IRON CONTENT AND GANGUE CONTENT Volumes primarily Volumes primarily from Brazil, fr
Slide 15: Providing a Global Scale Solution
PROVIDING A GLOBAL SCALE SOLUTION CHAMPION CONTROLS ONE OF THE LARGEST RESERVES AND RESOURCES CAPABLE OF PRODUCING HIGH- GRADE IRON ORE, INCLUDING POTENTIAL ACCESS TO RENEWABLE POWER AND AVAILABLE INFRASTRUCTURE For personal use only Active Project Pipeline Project Both Active/ 10 Pipeline 2 1 4 5 E
Slide 16: Producing with a Low Emission Footprint
PRODUCING WITH A LOW EMISSION FOOTPRINT For personal use only 150 CHAMPION HIGHLIGHTS 140 Canadian Iron Ore Production is Advantaged by Kg of CO2 emitted per tonne of iron ore produced (scope 32) 130 Kg of CO2 emitted per → Significant hydropower generation capacity 10.7 tonne of iron concentrate 12
Slide 17: Champion Iron Recent Results
TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF For personal use only CHAMPION IRON TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF RECENT RESULTS 16
Slide 18: Setting New Production Records at Bloom Lake
SETTING NEW PRODUCTION RECORDS AT BLOOM LAKE TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF For personal use only BLOOM LAKE PRODUCTION HISTORY → Post FY2022 results: Record iron ore concentrate (MILLION WMT/YEAR) production of 5.1M wmt in H1/FY2023, positively 15.0 14.0 impacted by the commissioning of the Ph
Slide 19: Proven Cost Structure
PROVEN COST STRUCTURE TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF TOTAL CASH COST2 VALUE-IN-USE ADJUSTED IRON ORE COST CURVE For personal use only 140 $100 (C$/DMT) (CFR, 62% FE FINES EQUIVALENT) 120 100 USD PER DMT $58.9 80 $50 60 40 20 $0 2014 2015 2016 2017 FY2019 1 FY2020 FY2021 FY2022 0 PREVIOUS OWNERS
Slide 20: Historical Financial Results
HISTORICAL FINANCIAL RESULTS TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF → Post FY2022 results: H1-2023 reported EBITDA1 and → Balance sheet positioned for growth as of Sept 30th, 2022 For personal use only adjusted EPS1 of $179.3M and $0.16, respectively $277.4M Cash & S-T investments EBITDA (C$M) 1 $1,000
Slide 21: Product Development and Growth Initiatives
TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF For personal use only PRODUCT DEVELOPMENT TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF AND GROWTH INITIATIVES 20
Slide 22: Growth Opportunities
GROWTH OPPORTUNITIES TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF PROJECT PIPELINE For personal use only OPERATING STUDY DEVELOPMENT 1. CONSOLIDATED FIRE LAKE NORTH 2. MOIRÉ LAKE BLOOM LAKE BLOOM LAKE KAMI PROJECT FIRE LAKE NORTH 3. QUINTO PHASE I PHASE II 7.8 MTPA1 9.3 MTPA1 4. LAC LAMÊLÉE SOUTH 7.4 MTPA 15
Slide 23: Phase II – Significant Milestone
PHASE II – SIGNIFICANT MILESTONE TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF For personal use only → >US$1.6B project initiated in 2011 by Bloom Lake’s previous owner and expected to double Bloom Lake’s nameplate capacity → Commissioning of the Phase II expansion project achieved ahead of the previously ant
Slide 24: Phase II – Ramping-Up as Scheduled
PHASE II – RAMPING-UP AS SCHEDULED TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF → Phase II project’s cumulative production as of Q2/FY23 compares favourably to the scheduled ramp-up production assumptions For personal use only → Last major on-site work program related to the Phase II equipment has been compl
Slide 25: Robust Growth Pipeline
ROBUST GROWTH PIPELINE TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF → In addition to significant regional reserves and resources and a partnership to develop a cold pelletizing For personal use only technology, Champion is currently studying three organic growth projects → Study evaluating the → Revising the
Slide 26: Rising DR Pellet Premiums
RISING DR PELLET PREMIUMS TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF → Recent economic cycles demonstrate lower volatility for DR pellet premiums compared to iron ore index prices (P62 & P65) For personal use only → Rising demand and limited supply for DR products resulted in rising DR pellet premiums curr
Slide 27: A Global Scale Opportunity
A GLOBAL SCALE OPPORTUNITY TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF REGIONAL ADVANTAGES & OPPORTUNITIES For personal use only → Champion controls 7 iron rich properties within 60 kilometres of the Bloom Lake Mine → Assets located in a proven iron ore operating region including: - Proximity to railways -
Slide 28: Growing Industry, Lack of Development Capital
GROWING INDUSTRY LACK OF DEVELOPMENT CAPITAL TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF → Globally steel output is rising faster than iron ore supply in major hubs For personal use only CHINA TOTAL CRUDE STEEL OUTPUT 5- YEAR AUSTRALIA + BRAZIL IRON ORE EXPORTS 10,000 (10,000 TONS) 150,000 (MONTHLY - 5 YEAR
Slide 29: Our People Are Our Most Valuable Asset
OUR PEOPLE ARE OUR MOST VALUABLE ASSET TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF CREATING A POSITIVE IMPACT FOR LOCAL COMMUNITIES WITH OUR EXPERTISE, ROBUST CULTURE AND VALUES For personal use only PRIDE INGENUITY RESPECT TRANSPARENCY Upholding our values for a sustainable future 28
Slide 30: Thank You!
For personal use only THANK YOU! TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF Contact us for more information Michael Marcotte, CFA Senior Vice-President – Corporate Development and Capital Markets info@championiron.com 514-316-4858
Slide 31: Additional Material
For personal use only ADDITIONAL MATERIAL TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF
Slide 32: Green Steel Value Chain Pricing
GREEN STEEL VALUE CHAIN PRICING TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF Material value captures in the steel value chain occurs between pellet and HBI as well as the HRC stage For personal use only ∆ +71% ∆ +96% ∆+30% Source: Bloomberg, Platts, Wood Mackenzie 31
Slide 33: Company Projects Mineral Resources & Reserves
COMPANY PROJECTS MINERAL RESOURCES & RESERVES TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF For personal use only Notes: * The historical mineral resources and reserves are historical estimates and should not be relied upon. A qualified person has not done sufficient work to upgrade or classify the historical
Slide 34: Appendix: Notes on Historical Estimates Used in the Presentation
APPENDIX TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF NOTES ON HISTORICAL ESTIMATES USED IN THE PRESENTATION For personal use only 1. The historical Kami Project resource estimates are based on the National Instrument 43-101 technical report entitled “Feasibility Study of the Rose Deposit and Resource Estima
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