Mr. David Cataford reports

CHAMPION IRON REPORTS ITS FY2024 FOURTH QUARTER PRODUCTION

Champion Iron Ltd. has released production results and mining operation expenditures for its financial fourth quarter ended March 31, 2024. Detailed operational and audited financial results are to be released prior to the company's conference call and webcast scheduled for May 31, 2024.

• Quarterly production of 3.3M wmt (million wet metric tonnes), sales of 3.0M dmt (million dry metric tonnes) and cash cost of approximately $77/dmt.
• Solidifying operations at Bloom Lake following a strategy to identify bottlenecks and required investments to expand nameplate capacity beyond 15 Mtpa (million tonnes per annum).
• Ratified a new five-year collective bargaining agreement with Bloom Lake's unionized employees.

Champion's chief executive officer, David Cataford, said: "The new collective bargaining agreement signed during the quarter is mutually beneficial for all stakeholders. Its five-year term will also provide long-term stability for our employees, our organization and the community. From an operational standpoint, we followed our strategy to push Bloom Lake beyond its nameplate capacity in the previous quarter, resulting in short-term production volatility, but enabling us to identify and confirm bottlenecks within our facilities. Our technical team is now analyzing the investments required to structurally increase production at Bloom Lake beyond 15 Mtpa over time. As we solidify operations, we continue to seek improvements from the rail operator to ensure that haulage services keep pace with our production rate as we continue to exercise our leadership in the green steel supply chain."

Conference call details

Champion will host a conference call and webcast on May 31, 2024, at 9 a.m. (Montreal time)/11 p.m. (Sydney time) to discuss the results for the financial fourth quarter ended March 31, 2024. Call details are outlined at the end of this press release.

1. Quarterly highlights

Operations and sustainability

• No serious injuries or major environmental incidents reported in the quarter;
• Ratified a new five-year collective bargaining agreement with Bloom Lake's unionized employees, providing long-term stability for the employees, the company and the community;
• Appointed Ronnie Beevor to the board of directors in March, 2024, who brings decades of valuable experience, as a director and chairman of various successful mining companies;
• Quarterly production of 3.3-million wmt (3.2-million dmt) of high-grade 66.1 per cent Fe concentrate for the three-month period ended March 31, 2024, down 19 per cent from the previous quarter, and up 6 per cent over the same period last year;
• Quarterly iron ore concentrate sales of 3.0-million dmt for the three-month period ended March 31, 2024, down 8 per cent and 4 per cent, from the previous quarter and the prior-year period, respectively;
• The company continues to seek improvements from the rail operator to receive contracted haulage services to ensure that Bloom Lake's production, as well as iron ore concentrate currently stockpiled at Bloom Lake, is hauled over future periods. Iron ore concentrate stockpiled at Bloom Lake reached 2.7-million wmt as at March 31, 2024.

Financial results

• C1 cash cost of approximately $77/dmt ($57 (U.S.)/dmt), an increase of 5 per cent quarter on quarter, and a decrease of 3 per cent year over year;
• Strong cash position at quarter-end with $400.1-million in cash and cash equivalents as at March 31, 2024, an increase of $12.7-million since Dec. 31, 2023;
• Available liquidity to support growth initiatives, including amounts available from the company's credit facilities, totalled $942.1-million at quarter-end, compared with $937.6-million as at Dec. 31, 2023.

Growth and development

• Filed the previously reported Kami project study, completed pursuant to National Instrument 43-101 -- Standards of Disclosure for Mineral Projects (NI 43-101) and Chapter 5 of the ASX Listing Rules entitled "Pre-Feasibility Study for the Kamistiatusset (Kami) Iron Ore Property," which evaluated the construction of mining and processing facilities to produce direct reduction (DR) grade pellet feed iron ore from the properties of the proposed Kami mine. The company continues to evaluate opportunities to improve the project economics and engage in strategic partnership discussions prior to considering a final investment decision.
• DR pellet feed project, upgrading half of Bloom Lake's capacity to DR quality pellet feed iron ore up to 69 per cent Fe, remains on schedule and on budget with detailed engineering works and procurement progressing as planned. The project commissioning is scheduled for the second half of calendar year 2025, a timeline which is subject to completing key construction milestones by mid-2024.
• Continued to evaluate DR pelletizing projects to further participate in the green steel supply chain and align with the accelerating industry transition to direct reduced iron and electric arc furnaces steelmaking.
• Following the company's strategy to push Bloom Lake beyond its nameplate capacity in the previous quarter, in order to identify and confirm bottlenecks, the team is now analyzing the investments required to structurally increase Bloom Lake's nameplate capacity beyond 15 Mtpa over time.

2. Bloom Lake mine operating activities

Bloom Lake's phase II reached commercial production in December, 2022, and produced at nameplate capacity for thirty consecutive days for the first time during the first quarter of the 2024 financial year. During the third quarter, further to various operating improvements, the company deployed a strategy to identify operational bottlenecks at Bloom Lake by pushing facilities beyond its nameplate capacity. This initiative confirmed Bloom Lake's capacity to produce above its expanded 15 Mtpa nameplate capacity, but it reduced the availability of the company's equipment in the fourth quarter due mainly to unplanned maintenance activities caused by premature wear and tear on the equipment and earlier than expected major maintenance of the plants. As the company solidifies operations, a team was mobilized to identify and analyze work programs and investments required to structurally increase Bloom Lake's nameplate capacity beyond 15 Mtpa over time.

Shipments were negatively impacted during the three-month period ended March 31, 2024, as a result of continued lagging railway services as well as planned and unplanned maintenance activities at the port facilities and on the railroad. Due to the continuing disconnect in railway services and Bloom Lake's increasing production capacity, the iron ore concentrate stockpiled at Bloom Lake increased significantly since June, 2023. As at March 31, 2024, the iron ore concentrate stockpiled at the site totalled 2.7 million wmt, an increase of 200,000 wmt since December, 2023.

The company continues to seek improvements from the rail operator to receive contracted haulage services to ensure that Bloom Lake's production, as well as iron ore concentrate currently stockpiled at Bloom Lake, is hauled over future periods.

During the three-month period ended March 31, 2024, 16.0 million tonnes of material were mined and hauled, compared with 14.2 million tonnes during the same period in 2023, an increase of 12 per cent. This increase is attributable to the contribution of additional equipment, a higher utilization and availability of mining equipment, and reduced trucking cycle time associated with the construction of additional ramp accesses. Material mined and hauled during the previous quarter was 18.2 million tonnes, representing a quarter-on-quarter decrease of 12 per cent, mainly attributable to the lower availability of loading equipment and winter conditions.

The stripping ratio of 0.69 for the three-month period ended March 31, 2024, was expected and higher than the same prior-year period, compared with 0.62 in the previous quarter. As the company deployed its strategy to push Bloom Lake beyond its nameplate capacity in the previous quarter to identify bottlenecks, this caused production volatility during the current quarter, and additional resources were allocated to waste removal. The company plans to maintain higher stripping activities in accordance with the LoM plan over the next quarters.

During the three-month period ended March 31, 2024, the two plants at Bloom Lake processed 9.3 million tonnes of ore, compared with 9.1 million tonnes for the same prior-year period and 11.1 million tonnes in the previous quarter, an increase of 3 per cent and a decrease of 16 per cent, respectively. Ore processed during the three-month period ended March 31, 2024, was negatively impacted by longer-than-planned maintenance activities, unplanned outages as well as by advancing the schedule of an expected major maintenance of the second plant driven by additional production in the previous quarter. During the third quarter, the company operated its plants above their expanded nominal capacity to confirm their full potential and also to identity and confirm bottlenecks, resulting in higher unscheduled maintenance activities during the three-month period ended March 31, 2024.

The iron ore head grade for the three-month period ended March 31, 2024, was 28.7 per cent, compared with 28.4 per cent for the same period in 2023, and 29.4 per cent during the previous quarter. The variation in head grade was within expected normal variations in the mine plan.

The company's average Fe recovery rate was 80.2 per cent for the three-month period ended March 31, 2024, compared with 78.6 per cent for the same period in 2023, and 81.4 per cent during the previous quarter. The year-over-year increase in Fe recovery is attributable to work programs that aimed to increase throughput and ore recoveries. With continuous efforts made to optimize its recovery circuits, the company expects to reach the LoM (life of mine) Fe recovery rate target of 82.0 per cent in the near term.

With higher Fe recovery and comparable head grade, Bloom Lake produced 3.3 million wmt (3.2 million dmt) of high-grade iron ore concentrate during the three-month period ended March 31, 2024, an increase of 6 per cent compared with 3.1 million wmt (3.0 million dmt) during the same period in 2023, and a decrease of 19 per cent compared with the previous quarter.

3. Mining and processing operating expenditures

For the three-month period ended March 31, 2024, the cost of sales totalled approximately $227-million with a C1 cash cost of $77/dmt, compared with $244.4-million with a C1 cash cost of $79.0/dmt for the same period in 2023, and $235.5-million with a C1 cash cost of $73.0/dmt in the previous quarter.

The year-over-year improvement in cash cost was mostly driven by lower fuel and explosives prices, and higher production, partially offset by higher than planned utilization of contractors to fill vacant positions as well as higher levels of planned and unplanned maintenance activities. Cash cost for the three-month period ended March 31, 2024, continued to be negatively impacted by lower-than-expected run rate shipment levels to amortize mostly fixed handling costs at the port facilities in Sept-Iles.

4. Exploration activities

During the three-month period ended March 31, 2024,

• The company maintained all of its properties in good standing and did not enter into any farm-in/farm-out arrangements.
• Approximately $2-million in exploration and evaluation expenditures were incurred, compared with $2.5-million for the same prior-year period.
• Exploration and evaluation expenditures mainly consisted of costs associated with updating the Kami project study, and exploration drilling of 1,100 m on the Bloom East properties located in the Labrador trough.

Details on exploration projects and maps are available on the company's website under the operations and projects section.

5. Conference call and webcast information

A webcast and conference call to discuss the foregoing results will be held on May 31, 2024, at 9 a.m. (Montreal time)/11 p.m. (Sydney time). Listeners may access a live webcast of the conference call from the investors section of the company's website or by dialling toll-free 1-888-390-0546 within North America or 1-800-076-068 from Australia.

An on-line archive of the webcast will be available by accessing the company's website. A telephone replay will be available for one week after the call by dialling 1-888-390-0541 within North America or 1-416-764-8677 overseas, and entering passcode 003567 followed by the pound key.

About Champion Iron Ltd.

Champion Iron, through its wholly owned subsidiary Quebec Iron Ore Inc., owns and operates the Bloom Lake mining complex, located on the south end of the Labrador Trough, approximately 13 kilometres north of Fermont, Que. Bloom Lake is an open-pit operation with two concentrators that primarily source energy from renewable hydroelectric power. The two concentrators have a combined nameplate capacity of 15 million tonnes per year and produce low-contaminant high-grade 66.2-per-cent-iron iron ore concentrate with a proven ability to produce a 67.5-per-cent Fe direct reduction quality iron ore concentrate. Benefiting from one of the highest-purity resources globally, the company is investing to upgrade half of the Bloom Lake mine capacity to a direct reduction quality pellet feed iron ore with up to 69 per cent Fe. Bloom Lake's high-grade and low-contaminant iron ore products have attracted a premium to the Platts IODEX 62-per-cent-iron iron ore benchmark. The company ships iron ore concentrate from Bloom Lake by rail to a shiploading port in Sept-Iles, Que., and has sold its iron ore concentrate to customers globally, including in China, Japan, the Middle East, Europe, South Korea, India and Canada. In addition to Bloom Lake, Champion Iron owns a portfolio of exploration and development projects in the Labrador Trough, including the Kamistiatusset project, located a few kilometres southeast of Bloom Lake, and the Cluster II portfolio of properties, located within 60 kilometres south of Bloom Lake.

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