Champion Iron’s production fell by 10pc in Q1 FY2021 (quarter ended June 30, 2020) compared with the same quarter last year because of a reduction in mining activities to safeguard against the COVID-19 pandemic.

 

The company had ramped down operations at its Bloom Lake mine in Canada in late March following government orders in response to the pandemic. In April, however, Champion gradually began ramping up operations following another government directive that designated mining as a “priority service.” Production during the quarter, therefore, fell to around 1.8mn wmt of concentrated iron ore from around 1.99mn wmt in Q1 FY2020 (ended June 30, 2019).

 

During the quarter, Champion’s total ore mined fell by 16pc to 7.29mn mt from 8.68mn mt during the same quarter last year. The mine processed around 4.6mn mt of iron ore in Q1 FY2021 down by 4pc from 4.78mn mt in the same period last fiscal as only one of the two production lines was operational through most of the first quarter because of COVID-19 related ramp downs and scheduled maintenance.

 

However, Champion achieved an ore recovery rate of 82.3pc in Q1 FY2021, slightly better than 82.1pc in the same period in Q1 FY2020, and mined 66.5pc Fe grades compared with 66.2pc Fe grades during the same period under comparison.

 

After a successful test production of direct reduced (DR) iron ore concentrate for pellet producers in the preceding quarter, Champion produced an additional 207,900wmt of DR iron ore concentrate in Q1 FY2021. The concentrate consisted of 67.8pc Fe that was shipped to a pellet customer in the Middle East.

 

The company’s iron ore sales also fell during the quarter due to COVID-19 related shutdowns. Champion sold 1.75mn mt of iron ore concentrate in Q1 FY2021 compared with 1.90mn mt sold during the same quarter last fiscal. The concentrate was sold at 15.5pc premium and deducting freight costs, the company achieved iron ore sales at $100.30/mt.

 

Champion’s revenue for the quarter fell to CA$244.57mn ($182.99mn) compared with CA$277.91mn during the same period last fiscal while its gross profit fell to CA$128.29mn from CA$170.69mn during the same period under comparison. The company’s net income, however, increased slightly to CA$75.56mn from CA$74.24mn during the same quarter last year.

 

($1=CA$1.33)

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