Mr. David Cataford reports

CHAMPION IRON ENTERS INTO A DEFINITIVE AGREEMENT WITH NIPPON STEEL AND SOJITZ TO FORM A PARTNERSHIP FOR THE KAMI PROJECT

Champion Iron Ltd. has entered into a definitive framework agreement with Nippon Steel Corp. and Sojitz Corp. (Sojitz, and collectively with Nippon Steel, the partners) pursuant to which the partners have agreed, subject to the terms and conditions set forth therein, to initially contribute $245-million for an aggregate 49-per-cent interest in Kami Iron Mine Partnership, a new entity formed for the ownership and potential development of the Kamistiatusset iron ore project. The framework agreement is entered into to implement the binding agreement between Champion and the partners previously announced by the company in December, 2024.

Champion's chief executive officer, David Cataford, said: "The framework agreement marks a significant milestone for the Kami project, establishing a clear structure to advance its evaluation alongside trusted partners who share our long-term vision for the growing demand for high-purity iron ore and our commitment to positively impact the communities where we operate. Supported by anticipated proceeds and the partners' pro rata contributions of future expenditures, the partnership will enable us to advance the project without impacting our financial liquidity in the foreseeable future. As we move forward, our focus will shift to identifying opportunities to enhance the project's economics while remaining committed to our disciplined capital allocation strategy."

The framework agreement provides that the closing of the transactions set forth therein will occur in two steps.

The completion of the initial closing of the transactions is subject to the clearance from the State Administration for Market Regulation of the People's Republic of China, as well as other customary closing conditions. The initial closing is expected to occur during the second half of calendar 2025. Upon the initial closing, Nippon Steel and Sojitz will make their initial cash contributions to the partnership in an aggregate amount of $68.6-million to secure their interests in the partnership and are expected to make further contributions on a pro rata basis for expenses necessary to advance the Kami project toward a potential interim investment decision and, ultimately, a potential final investment decision. Such expenses will relate to activities including the advancement of permitting, community engagement and the completion of a definitive feasibility study for the Kami project. The DFS is expected to be completed by the end of calendar 2026. Following the initial closing, Champion will hold a 51-per-cent equity interest in the partnership, and Nippon Steel and Sojitz will hold minority positions of 30 per cent and 19 per cent, respectively.

The completion of the second closing of the transactions is subject to the initial closing having occurred, the completion of the DFS, and the making by Champion and the partners of a positive IID election to pursue work toward a final investment decision, as well as other customary closing conditions. The second closing is expected to occur within several months of the completion of the DFS. Upon the second closing, Nippon Steel and Sojitz will make subsequent contributions to the partnership in the aggregate amount of $176.4-million, to finalize securing their interests in the partnership, and are expected to make further contributions on a pro rata basis for expenses necessary to advance the Kami project toward a potential FID. The Kami project potential construction period is estimated at 48 months following a positive FID.

At the initial closing, Champion and the partners will, through their wholly owned subsidiaries, enter into a partnership agreement with respect to the partnership. Pursuant to the partnership agreement, all costs associated with the Kami project will be shared by Champion and the partners on a pro rata basis. Nippon Steel and Sojitz will be entitled to an allocation of the iron ore volumes produced from Kami in accordance with their proportional ownership in the Kami project. Additionally, the partnership agreement will provide for potential future payments to Champion based on the Kami project's financial performance if and when it operates. Champion will retain operatorship of the Kami project, and will oversee its potential development and future operations. In addition to dilution, exit rights, veto rights, and other rights and obligations customary for a transaction of such nature, the partnership agreement will also include put options and call options exercisable under certain conditions by the partners and by Champion, as applicable, in the event any of those parties makes a negative IID or FID election. In the event those put options or call options are exercised, Champion will have the obligation to acquire the partnership interest of the relevant partner in accordance with the terms of the partnership agreement, which will take into account several elements, including the expenditures contributed by the partners.

The partnership will be governed by a management committee composed of six members, with Champion and each of the partners nominating two members.

In recent months, Champion advanced the recently initiated environmental impact statement, as required by the government of Newfoundland and Labrador. In the near term, the company will also continue to engage with local stakeholders, including indigenous groups, to foster collaborative development and to ensure the Kami project has a positive impact for the region. Additionally, the company will pursue discussions with governments at various levels, including seeking potential support stemming from the recent addition of high-purity iron ore to the critical mineral lists of the government of Canada, as well as those of Newfoundland and Labrador and Quebec, and evaluate opportunities to improve the Kami project's economics. Concurrently, the partnership will work toward completing the DFS.

About the Kami project

On April 1, 2021, the company acquired the Kami project mining properties located in the Labrador Trough geological belt in southwestern Newfoundland, near Quebec's eastern border. The Kami project is a direct-reduction-grade-quality iron ore project situated near available infrastructure, only a few kilometres southeast of the company's operating Bloom Lake mine. On March 14, 2024, the company voluntarily filed a technical report with respect to the Kami project prepared pursuant to National Instrument 43-101 (Standards of Disclosure for Mineral Projects) and Chapter 5 of the Australian Securities Exchange listing rules and entitled "Pre-Feasibility Study for the Kamistiatusset Iron Ore Property," which evaluated the construction of mining and processing facilities to produce DR grade pellet feed iron ore from the Kami project. The Kami project study details a 25-year life of mine with average annual DR quality iron ore concentrate production of approximately 9.0 million wet metric tonnes per annum grading above 67.5 per cent iron. The Kami project benefits from the permitting work completed by its previous owner and has an estimated construction period of approximately 48 months following an FID. As detailed in the Kami project study, the capital expenditures were estimated at $3,864-million, resulting in a net present value of $541-million and an internal rate of return of 9.8 per cent after tax, based on conservative pricing dynamics compared with prevailing iron ore prices, or a net present value of $2,195-million and an internal rate of return of 14.8 per cent after tax, based on the three calendar years average of the P65 index price, which preceded the Kami project study. The Kami project study is available under the company's profile on SEDAR+, the Australian Securities Exchange website and on the company's website.

About Nippon Steel Corp.

Nippon Steel is one of the world's leading steel steelmakers and Japan's largest steelmaker. Nippon Steel has a global crude steel production capacity of approximately 86 million tonnes and employs approximately 136,000 people in the world. Nippon Steel's manufacturing base encompasses more than 15 countries including: Japan, United States, India, Thailand, Indonesia, Vietnam, Brazil, Mexico, Sweden and others. As the best steelmaker with world-leading capabilities, Nippon Steel pursues world-leading technologies and manufacturing capabilities, and contributes to society by providing excellent products and services. Nippon Steel has been an active customer of Champion since the recommissioning of the Bloom Lake mine in 2018.

About Sojitz Corp.

Sojitz was formed out of the union of Nichimen Corp. and Nissho Iwai Corp., both companies that boast incredibly long histories. For more than 160 years, the business has helped support the development of countless countries. Today, the Sojitz group consists of approximately 400 subsidiaries and affiliates located in Japan and throughout the world, developing wide-ranging general trading company operations globally. Sojitz has acted as a marketing partner for Champion since the recommissioning of the Bloom Lake mine in 2018.

About Champion Iron Ltd.

Champion, 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 concentration plants that primarily source energy from renewable hydroelectric power, having a combined nameplate capacity of 15 million wmt per year that produce lower-contaminant high-grade 66.2-per-cent-iron iron ore concentrate with a proven ability to produce a 67.5-per-cent-iron direct reduction quality iron ore concentrate. Benefiting from one of the highest-purity resources globally, Champion is investing to upgrade half of Bloom Lake's mine capacity to a direct-reduction-quality pellet feed iron ore with up to 69 per cent Fe. Bloom Lake's high-grade and lower-contaminant iron ore products have attracted a premium to the Platts Iodex 62-per-cent-iron iron ore benchmark. Champion ships iron ore concentrate from Bloom Lake by rail to a shiploading port in Sept-Iles, Que., and has delivered its iron ore concentrate globally, including in China, Japan, the Middle East, Europe, South Korea, India and Canada. In addition to Bloom Lake, Champion owns a portfolio of exploration and development projects in the Labrador Trough, including the Kami project, located a few kilometres southeast of Bloom Lake, and the Cluster II portfolio of properties, located within 60 kilometres south of Bloom Lake.

Qualified person

Vincent Blanchet, PEng, engineer at Quebec Iron Ore Inc., the company's subsidiary, is a qualified person as defined by National Instrument 43-101 (Standards of Disclosure for Mineral Projects), has reviewed and approved, or has prepared, as applicable, the disclosure of the scientific and technical information contained in this press release, and has confirmed that the relevant information is an accurate representation of the available data and studies for the relevant projects. Mr. Blanchet is a member of the Ordre des ingenieurs du Quebec.

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