Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

<ul>
<li>We analyze <a href="https://www.smartkarma.com/entities/champion-iron-ltd" target="_blank" rel="noopener">Champion Iron's (CIA AU)</a> Q2 2025 results. Forest fires, shutdowns, and logistical issues impacted the quarter, with revenues/profits down 9%/69% YoY.</li>
<li>The company reduced its stockpile of iron ore, but the cash pile still declined 100 mn CAD due to significant capex in the flotation plant and dividend payment. </li>
<li>The consensus (and we) will have to significantly reduce earnings as logistics continues to impact growth. </li>
</ul>


We analyze Champion Iron's (CIA AU) Q2 2025 results. Forest fires, shutdowns, and logistical issues impacted the quarter, with revenues/profits down 9%/69% YoY.
The company reduced its stockpile of iron ore, but the cash pile still declined 100 mn CAD due to significant capex in the flotation plant and dividend payment. 
The consensus (and we) will have to significantly reduce earnings as logistics continues to impact growth. 


Champion Iron (CIA AU) Q2 2025: Too Many Execution Glitches

External broker reports(aggregated public sources), Bell Potter Securities

Bell Potter

External broker reports(aggregated public sources)

Bell Potter Securities

Bell Potter Securities is a leading Australian stockbroking, investment and financial advisory firm that provides a comprehensive offering of financial services to individuals, institutions and corporations. Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>High grade iron concentrates to enable greener steelCIA’s 100%-owned Bloom Lake mine in northern Quebec Canada produces around 15Mtpa of high grade (+66% Fe) iron concentrate.</li><li>This high grade concentrate reduces steel making carbon emissions by around 10% compared with typical hematite ore.</li><li>From 2026, processing plant upgrades will lift around half of CIA’s production to 69% Fe. At this “DR-grade” level, CIA’s concentrates can supply Direct Reduction Iron – Electric Arc Furnace steel producers, ...</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

High grade iron concentrates to enable greener steelCIA’s 100%-owned Bloom Lake mine in northern Quebec Canada produces around 15Mtpa of high grade (+66% Fe) iron concentrate.This high grade concentrate reduces steel making carbon emissions by around 10% compared with typical hematite ore.From 2026, processing plant upgrades will lift around half of CIA’s production to 69% Fe. At this “DR-grade” level, CIA’s concentrates can supply Direct Reduction Iron – Electric Arc Furnace steel producers, ...Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Champion Iron Ltd (CIA): Initiation – Evolving with steel’s transition

<ul><li>CIA’s 100%-owned Bloom Lake mine in northern Quebec Canada produces around 15Mtpa of high grade (+66% Fe) iron concentrate.</li><li>This high grade concentrate reduces steel making carbon emissions by around 10% compared with typical hematite ore.</li><li>From 2026, processing plant upgrades will lift around half of CIA’s production to 69% Fe.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

CIA’s 100%-owned Bloom Lake mine in northern Quebec Canada produces around 15Mtpa of high grade (+66% Fe) iron concentrate.This high grade concentrate reduces steel making carbon emissions by around 10% compared with typical hematite ore.From 2026, processing plant upgrades will lift around half of CIA’s production to 69% Fe.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Champion Iron Ltd (CIA) – Evolving with Steel’s Transition

Commodities

<ul>
<li>We like <a href="https://www.smartkarma.com/entities/vale-sa" target="_blank" data-smartkarma-citation="entities:23731:1" rel="noopener">Vale (VALE US)</a> for its exposure to high-grade iron ore (95% of EBITDA) and capital return discipline, with a current dividend yield of 8% and 3.5x EV-EBITDA. </li>
<li>The cash flows from the iron ore business could be used to invest in base metals, such as copper, nickel, etc., to enhance the portfolio. </li>
<li>The key risk remains the overhang from the Mariana Dam disaster being settled for  ~25.7 billion USD (vs. the current market cap of 50 billion USD). </li>
</ul>


We like Vale (VALE US) for its exposure to high-grade iron ore (95% of EBITDA) and capital return discipline, with a current dividend yield of 8% and 3.5x EV-EBITDA. 
The cash flows from the iron ore business could be used to invest in base metals, such as copper, nickel, etc., to enhance the portfolio. 
The key risk remains the overhang from the Mariana Dam disaster being settled for  ~25.7 billion USD (vs. the current market cap of 50 billion USD). 


VALE US: Exposure to High-Grade Iron Ore With >8% Dividend Yield

<ul>
<li>Iron ore continued to operate in its band from 95-130 USD/ton over the last few years, with a recent drop from 120 USD/ton to 105 USD/ton on tepid China data.</li>
<li>With incremental news on China's stimulus in the property and infrastructure sectors, we remain confident that iron ore will return to 120 USD/ton in the short term. </li>
<li>We also remain bullish on the 65-62 spread, which has expanded to the teens. <a href="https://www.smartkarma.com/entities/rio-tinto-ltd" target="_blank" data-smartkarma-citation="entities:13:1" rel="noopener">Rio Tinto Ltd (RIO AU)</a> and <a href="https://www.smartkarma.com/entities/vale-sa" target="_blank" data-smartkarma-citation="entities:23731:1" rel="noopener">Vale (VALE US)</a>  are good plays on the spread.</li>
</ul>


Iron ore continued to operate in its band from 95-130 USD/ton over the last few years, with a recent drop from 120 USD/ton to 105 USD/ton on tepid China data.
With incremental news on China's stimulus in the property and infrastructure sectors, we remain confident that iron ore will return to 120 USD/ton in the short term. 
We also remain bullish on the 65-62 spread, which has expanded to the teens. Rio Tinto Ltd (RIO AU) and Vale (VALE US)  are good plays on the spread.


Iron Ore: Disappointing Data Pushed Price Down to 105, Bounce To 120 On Further Stimulus From China

Australia

champion Iron Limited is a exploration company. The Company acquires, explores and develops properties for iron ore deposits.

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Champion Iron (CIA AU)