Champion Iron Ltd. · ASX:CIA
Champion Iron — Investor Presentation (November 2022)
33 slides from Champion Iron's investor presentation, November 2022
Slide 1: Investors Presentation November 2022
INVESTORS PRESENTATION NOVEMBER 2022 PREMIUM PRODUCT TIER 1 JURISDICTION HIGH QUALITY INFRASTRUCTURE
Slide 2: 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 3: Corporate Overview
CORPORATE OVERVIEW TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF LARGEST PUBLICLY LISTED PURE-PLAY HIGH-GRADE IRON ORE PRODUCER GLOBALLY → 2nd largest hub of high-grade exports globally → Access to infrastructure, including renewable hydroelectric power → 10.1% management ownership1 BLOOM LAKE → Cumulative in
Slide 4: Focus on Sustainability
FOCUS ON SUSTAINABILITY TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF → 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 → Committed to greenho
Slide 5: A Global Solution for the Transitioning Steel Industry
A GLOBAL SOLUTION FOR THE TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF TRANSITIONING STEEL INDUSTRY
Slide 6: 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 Raw Materials Critical for the Transition to a Low-carbon Economy Geothermal Hydro Nuclear Electricity Bioenergy Concentrated Hydrogen Wind Solar PV Electric Networks Solar Power Vehicl
Slide 7: 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 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% Agriculture, forestry an
Slide 8: 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 the Company to reduce emissions in the Blast Furnace-Basic Oxygen Fur
Slide 9: Significant Impact Towards Reducing Emissions
SIGNIFICANT IMPACT TOWARDS REDUCING EMISSIONS Champion’s concentrate reduces emissions in BF/BOF steel making 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 66.2% 15Mtpa 1 DRI/EAF
Slide 10: Embedded Value of High-Purity Iron Ore
EMBEDDED VALUE OF HIGH-PURITY IRON ORE 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 prices are climbing E
Slide 11: Green Steel Transition Underway
GREEN STEEL TRANSITION UNDERWAY NEW EAF CAPACITY TO INCREASE DEMAND FOR DRI → 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 source of clean iron units
Slide 12: 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 Metal Demand METAL DEMAND GROWTH BY 2050 Growth EXPECTEDbyBY2050 Expected by a Global Energy Transition A GLOBAL ENERGY TRANSITION (AET 2.0C SCENARIO)* (AET 2.0c Scenario)1 Cop
Slide 13: Bloom Lake's Market Leading Products
BLOOM LAKE’S MARKET LEADING PRODUCTS SINTER FEED SINTER FEED AVERAGE FE % AVERAGE GANGUE % 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, from Australia Canada, U
Slide 14: 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 Active Project Pipeline Project Both Active/ 10 Pipeline 2 1 4 5 Est. Marketable Reserve
Slide 15: Producing with a Low Emission Footprint
PRODUCING WITH A LOW EMISSION FOOTPRINT 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 120 → Direct access to s
Slide 16: Champion Iron Recent Results
TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF CHAMPION IRON TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF RECENT RESULTS 16
Slide 17: Setting New Production Records at Bloom Lake
SETTING NEW PRODUCTION RECORDS AT BLOOM LAKE TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF 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 Phase II Expected Namepl
Slide 18: Proven Cost Structure
PROVEN COST STRUCTURE TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF TOTAL CASH COST2 VALUE-IN-USE ADJUSTED IRON ORE COST CURVE 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 CHAMPION IRON 250 500
Slide 19: 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 adjusted EPS1 of $179.3M and $0.16, respectively $277.4M Cash & S-T investments EBITDA (C$M) 1 $1,000 $926 $138.9M Working
Slide 20: Product Development and Growth Initiatives
TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF PRODUCT DEVELOPMENT TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF AND GROWTH INITIATIVES 20
Slide 21: Growth Opportunities
GROWTH OPPORTUNITIES TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF PROJECT PIPELINE 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 MTPA1 5. HARVEY TUTTL
Slide 22: Phase II – Significant Milestone
PHASE II – SIGNIFICANT MILESTONE TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF → >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 anticipated mid-2022 targ
Slide 23: 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 → Last major on-site work program related to the Phase II equipment has been completed in Q2/FY23 and co
Slide 24: 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 technology, Champion is currently studying three organic growth projects → Study evaluating the → Revising the Kami project’s → In p
Slide 25: 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) → Rising demand and limited supply for DR products resulted in rising DR pellet premiums currently at US$75.5/t1 ov
Slide 26: A Global Scale Opportunity
A GLOBAL SCALE OPPORTUNITY TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF REGIONAL ADVANTAGES & OPPORTUNITIES → 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 - Newly built deep-water
Slide 27: 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 CHINA TOTAL CRUDE STEEL OUTPUT 5- YEAR AUSTRALIA + BRAZIL IRON ORE EXPORTS 10,000 (10,000 TONS) 150,000 (MONTHLY - 5 YEARS) Exports - Thousand
Slide 28: 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 PRIDE INGENUITY RESPECT TRANSPARENCY Upholding our values for a sustainable future 28
Slide 29: Thank You!
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 30: Additional Material
ADDITIONAL MATERIAL TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF
Slide 31: 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 ∆ +71% ∆ +96% ∆+30% Source: Bloomberg, Platts, Wood Mackenzie 31
Slide 32: Company Projects Mineral Resources & Reserves
COMPANY PROJECTS MINERAL RESOURCES & RESERVES TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF 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 estimates as current
Slide 33: Appendix: Notes on Historical Estimates
APPENDIX TSX: CIA ⎪ ASX: CIA ⎪ OTCQX : CIAFF NOTES ON HISTORICAL ESTIMATES USED IN THE PRESENTATION 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 Estimate for the Mills Lake
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