Mr. David Cataford reports

CHAMPION IRON REPORTS ITS FY2021 FOURTH QUARTER PRODUCTION

Champion Iron Ltd. has released its production results and mining operation expenditures for the fourth quarter ended March 31, 2021. Detailed operational and financial results are scheduled to be released prior to the company hosting a conference call and webcast at the end of May, 2021.

Conference call details

Champion will host a conference call and webcast on May 27, 2021, at 8:30 a.m. EDT, Montreal time/10:30 p.m. AEST, Sydney time, to discuss the fourth quarter and annual results for the fiscal year ended March 31, 2021. Call details are outlined at the end of this release.

1. Highlights

Health and safety:

• Expansion of Bloom Lake's COVID-19 laboratory testing capacity, allowing continuing and uninterrupted operational activities;
• An employee recordable injury frequency rate of 2.45, which is in line with Quebec's open-pit industry standards.

Financial:

• Cash on hand (1) and restricted cash totalled $680.5-million as at March 31, 2021, compared with $551.8-million as at Dec. 31, 2020, and $298.7-million as at March 31, 2020;
• Available liquidity for the coming income and mining taxes payments, totalling approximately $195-million, due in May, 2021;
• Full repayment of the $20.0-million (U.S.) revolving credit facility on March 30, 2021, bringing the total undrawn and available credit facilities to $220.0-million (U.S.) as at March 31, 2021.

Operations:

• Production of 2,011,400 wet metric tonnes of high-grade 66.5-per-cent-iron-ore concentrate for the three-month period ended March 31, 2021, compared with 1,891,800 wmt for the same period in 2020, contributing to record annual production of 8,001,200 wmt of high-grade 66.4-per-cent-iron-ore concentrate for the year ended March 31, 2021, compared with 7,903,700 wmt for the same period in 2020;
• Stable recovery rate of 82.6 per cent for the three-month period ended March 31, 2021, compared with 82.3 per cent for the same period in 2020;
• Free-on-board (FOB) total cash cost (2) of $54.40 per dry metric tonne ($43 (U.S.) per dmt) for the three-month period ended March 31, 2021, compared with $53.90 per dmt ($40.10 (U.S.) per dmt) for the same period in 2020.

Growth and development:

• Production of an additional 374,400 wmt of direct reduction (DR) quality iron ore concentrate, grading 67.6 per cent Fe with a combined silica and alumina content of 2.8 per cent;
• Inclusion in the S&P/ASX 200 Index, Australia's pre-eminent benchmark index, which measures the performance of the 200 largest index-eligible stocks listed on the Australian Securities Exchange;
• Acquisition of the Kamistiatusset iron ore project and its related mining properties on April 1, 2021, and initiation of work related to revising the Kami project's feasibility study, as the company evaluates growth alternatives within its portfolio.

Phase 2 milestones:

• Construction work is progressing as planned with more than 200 individuals actively working on the phase 2 project, which is expected to be completed by mid-2022;
• Agreement to expand the existing long-term rail contract with Quebec North Shore and Labrador Railway (QNS&L) to support the expected phase 2 production volumes;
• Receipt and installation of most spirals in the phase 2 plant;
• Ordering of long-lead-time items, including the stacker reclaimer by Societe Ferroviaire et Portuaire de Pointe-Noire (SFPPN).

Champion's chief executive officer, David Cataford, said: "Our company reports another strong year of operating results. The commitment and agility of our work force, partners and communities enabled us to mitigate the impacts of the pandemic, allowing our company to capitalize on rising global demand for high-grade iron ore. While our focus remains on providing a safe operating environment, with our prudent liquidity management, we pursued our growth strategy, notably through the recent acquisition of the Kami project and the ongoing advancement of the Bloom Lake phase 2 expansion project, expected to be completed by mid-2022. With our high-grade iron ore concentrate already contributing in reducing emissions in the steel industry, we produced and sold additional DR quality iron ore concentrate during the period, further improving our ability to positively impact emissions for our customers."

2. Response to the COVID-19 pandemic

The COVID-19 pandemic continues to impact the global economy, creating significant economic uncertainty.

Health and safety of the company's employees, partners and local communities

Since the beginning of the pandemic, the company has consistently and pro-actively deployed several measures in its efforts to mitigate risks related to COVID-19, in line with or exceeding the government of Quebec's guidelines. Despite the acceleration of COVID-19 vaccination efforts in the province of Quebec, the company continues to enforce all of its measures.

During the three-month period ended March 31, 2021, the company expanded its rapid-testing COVID-19 laboratory at the mine site, using technology approved and certified by Health Canada, allowing the company to screen all employees and contractors to prevent outbreaks. In addition, the company is participating with the establishment of the Cote-Nord Industry Vaccination Center, in collaboration with Rio Tinto IOC, ArcelorMittal Mines and Infrastructure Canada, and Aluminerie Alouette. Located in Sept-Iles, the vaccination centre's operations are expected to begin in May, 2021, when vaccination will be available to the general population. The collective effort to establish the vaccination centre supports the government's initiative to increase the immunization capacity in the region by providing greater vaccination access for the local communities.

The company's full COVID-19 plan is available on its website.

Financial and operational impacts

Despite the economic impact of the COVID-19 pandemic, iron ore prices and demand remained robust throughout the quarter and fiscal year ended March 31, 2021. To date, the company's risk-mitigating actions have proved successful in minimizing the pandemic's impact, with Bloom Lake operating at full capacity. During the quarter ended March 31, 2021, there were no significant operational disruptions caused by COVID-19.

3. Bloom Lake phase 2 update

As at March 31, 2021, the company reports total cash on hand (1) and restricted cash of $680.5-million and, consequently, did not draw on its available $200.0-million (U.S.) credit facility, and it also repaid the $20.0-million (U.S.) revolving facility. The company currently has a total undrawn credit facility of $220.0-million (U.S.), which is available to finance the phase 2 expansion project, expected to double Bloom Lake's nameplate capacity to 15 million tonnes per annum, upon its scheduled completion by mid-2022.

Milestones

There are currently more than 200 employees, consultants and subcontractors actively working on site to meet the Bloom Lake phase 2 completion objectives, and consequently, construction work is progressing as planned. The following work was undertaken, and the following milestones were achieved during the three-month period ended March 31, 2021:

• Agreement to expand the existing long-term rail contract with QNS&L to support the expected phase 2 production volumes;
• Stacker reclaimer ordered by SFPPN;
• Receipt and installation of most spirals;
• Purchase of major mining equipment;
• Modifications were made to the loading tower to accommodate phase 2 operations;
• Award of contracts for summer works in the tailing facility.

4. Acquisition of the Kami project

On April 1, 2021, the company completed the acquisition of the Kami project and certain related contracts pursuant to an asset purchase agreement among certain affiliates of the company and Deloitte Restructuring Inc. as receiver for Alderon Iron Ore Corp. and certain of its affiliates. The Kami project and the related mining properties are located in the Labrador Trough geological belt in southwestern Newfoundland near the Quebec border.

The consideration for the acquisition consisted of $15.0-million in cash, the extinguishment of approximately $19.4-million of Alderon's secured debt and an undertaking in favour of the receiver to make a finite production payment on a fixed amount of future iron ore concentrate production from the Kami project. In connection with the acquisition, Champion purchased the secured debt from Sprott Private Resource Lending (Collector) LP. The secured debt was extinguished for an aggregate consideration of 4.2 million Champion's ordinary shares issued to Sprott and Altius Resources Inc., which held a participation in the secured debt.

The Kami project is a high-grade iron ore project near available infrastructure, situated only a few kilometres southeast of the company's operating Bloom Lake mine. Alderon previously disclosed historical resources estimated at 1,274.5 million tonnes of measured and indicated resources (536.9 Mt measured and 737.6 Mt indicated) and proven and probable reserves of 517.2 Mt (392.7 Mt proven and 124.5 Mt probable). The historical mineral resources and reserves mentioned are strictly historical in nature, are non-compliant with National Instrument 43-101 (Standards of Disclosure for Mineral Projects) and the Joint Ore Reserves Committee (JORC) code (2012 edition), and should therefore not be relied upon. A qualified person has not done sufficient work to upgrade or classify the historical estimates as current mineral resources or mineral reserves, and Champion is not treating the historical estimates as current mineral resources or mineral reserves. Alderon completed an updated feasibility study on the Kami project in September, 2018. The company has initiated work to revise the Kami project's scope and update the feasibility study, as it evaluates its growth alternatives within its property portfolio. As part of the acquisition, Champion secured an additional eight Mtpa of port capacity, including a prepayment of port-related fees, at the multiuser berth at the port of Sept-Iles, currently being used by the company to export Bloom Lake's iron ore concentrate.

Notes

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 Deposit of the Kamistiatusset (Kami) Iron Ore Property, Labrador," prepared for Alderon Iron Ore by BBA Inc., Stantec, and Watts, Griffis and McOuat Ltd. dated Jan. 9, 2013, and having an effective date of Dec. 17, 2012. The historical Kami project reserve estimates are based on the NI 43-101 technical report entitled "Updated Feasibility Study of the Kamistiatusset (Kami) Iron Ore Property, Labrador," prepared for Alderon Iron Ore by BBA, Gemtec Ltd., Watts, Griffis and McOuat Ltd., and Golder Associates Ltd. dated Oct. 31, 2018, and having an effective date of Sept. 26, 2018. Kami project mineral resources include Kami project mineral reserves. The historical mineral resources and reserves mentioned are strictly historical in nature, are non-compliant with NI 43-101 and the JORC code (2012 edition), and should therefore not be relied upon. A qualified person has not done sufficient work to upgrade or classify the historical estimates as current mineral resources or mineral reserves, and Champion is not treating the historical estimates as current mineral resources or mineral reserves. These reserves and resources are not material mining projects, and are for properties adjacent to or near the company's existing mining tenements, and therefore the reports on these mineralizations have not been prepared in accordance with the JORC code (2012 edition) and the ASX listing rules. As stated above, the company has initiated work to revise the Kami project's scope and update the feasibility study.

2. The historical Moire Lake resource estimates are based on the NI 43-101 technical report entitled "Technical Report and Mineral Resource Estimate on the Moire Lake Property" by P&E Mining Consultants Inc. dated May 11, 2012, and having an effective date of March 28, 2012. The historical mineral resources mentioned are strictly historical in nature, are non-compliant with NI 43-101 and the JORC code (2012 edition), and should therefore not be relied upon. A qualified person has not done sufficient work to upgrade or classify the historical estimates as current mineral resources or mineral reserves, and Champion is not treating the historical estimates as current mineral resources or mineral reserves. These reserves and resources are not material mining projects, and are for properties adjacent to or near the company's existing mining tenements, and therefore, the reports on these mineralizations have not been prepared in accordance with the JORC code (2012 edition) and the ASX listing rules.

3. Bloom Lake phase 2 reserves are based on the technical report entitled "Bloom Lake Mine -- Feasibility Study Phase 2," prepared pursuant to NI 43-101 and JORC code (2012 edition) by BBA, Soutex and WSP Canada Inc., having an effective date of June 20, 2019, and filed on Aug. 2, 2019. Bloom Lake phase 2 mineral reserves include Bloom Lake phase 1 mineral reserves as of the effective date of the mineral reserve estimate reported in the feasibility study. The company is not aware of any new information or data that materially affect the information included in the feasibility study, and confirms that all material and technical assumptions underpinning the estimates in the feasibility study continue to apply and have not materially changed. The feasibility study is available under the company's filings at SEDAR, on the ASX website or on the company's website.

4. Certain resources mentioned are foreign estimates from an Australian perspective.

5. Bloom Lake mine operating activities

                                    OPERATING DATA

                                                 Three months ended               Year ended     
                                                     March 31,                     March 31,     
                                                2021           2020           2021           2020

Waste mined and hauled (wmt)               3,796,300      3,180,100     15,481,100     13,742,400
Ore mined and hauled (wmt)                 5,636,100      5,413,100     21,571,700     20,817,400
                                          ----------     ----------     ----------     ----------   
Material mined and hauled (wmt)            9,432,400      8,593,200     37,052,800     34,559,800
Strip ratio                                     0.67           0.59           0.72           0.66
Ore milled (wmt)                           5,237,800      4,880,000     20,598,700     19,749,800
Head grade Fe (%)                               30.7           31.7           30.7           32.1
Recovery (%)                                    82.6           82.3           83.5           82.6
Product Fe (%)                                  66.5           66.5           66.4           66.4
Iron ore concentrate produced (wmt)        2,011,400      1,891,800      8,001,200      7,903,700
Iron ore concentrate sold (dmt)            1,971,100      1,888,200      7,684,500      7,577,400
Statistics (in dollars per dmt sold)
Total cash cost (C1 cash cost) (2)             $54.4          $53.9          $54.2          $52.7
                                          ----------     ----------     ----------     ----------

Operational performance

Early actions implemented by the company in response to the COVID-19 pandemic minimized impacts on the company and its operations. Despite disruptions to operations in the first quarter of the fiscal year ended March 31, 2021, the company was able to set a new annual record production of 8,001,200 wmt of high-grade iron ore concentrate during the fiscal year ended March 31, 2021.

During the three-month period ended March 31, 2021, 9,432,400 tonnes of material was mined and hauled, compared with 8,593,200 tonnes for the same period in 2020, an increase of 10 per cent. This increase in material mined and hauled is attributable to the company's continuing mining equipment rebuild program, which provided a higher equipment utilization rate and additional equipment availability. The higher volume mined is also attributable to the commissioning of an additional haul truck during the year ended March 31, 2021.

The strip ratio increased to 0.67 for the three-month period ended March 31, 2021, compared with 0.59 for the same period in 2020. Although the strip ratio is in line with the annual mine plan, it was negatively impacted by the company's efforts to recover the waste backlog accumulated during the first quarter of the 2021 fiscal year, when Champion's operations were disrupted by the government's imposed COVID-19 directives.

The Bloom Lake plant processed 5,237,800 tonnes of ore during the three-month period ended March 31, 2021, compared with 4.88 million tonnes for the same period in 2020, representing an increase of 7 per cent. The higher throughput resulted from higher mined ore availability and a higher mill utilization rate. The continuous improvements and operational innovations allowed the company to increase throughput stability and reach a higher level of mill productivity, despite the inefficiencies created by COVID-19, enabling the company to capitalize on elevated iron ore prices.

The iron ore head grade in the three-month period ended March 31, 2021, was 30.7 per cent, compared with 31.7 per cent for the same period in 2020. The decrease in head grade is attributable to the presence of some lower-grade ore being sourced and blended from different pits when compared with the prior year, which is in line with the mining plan and the LoM head grade average.

During the three-month period ended March 31, 2021, the company produced an additional 374,400 wmt of DR quality iron ore concentrate at 67.6 per cent Fe, with a combined silica and alumina content of 2.8 per cent. This additional production has been sold during the three-month period ended March 31, 2021, demonstrating the company's ability to adapt to meet demand for higher-quality iron ore products.

The company's average recovery rate of 82.6 per cent remained stable during the three-month period ended March 31, 2021, despite being adversely impacted by the production of low silica concentrate, compared with a recovery rate of 82.3 per cent for the same period in 2020.

Based on the foregoing, Bloom Lake produced 2,011,400 wmt of 66.5-per-cent-iron high-grade iron ore concentrate during the three-month period ended March 31, 2021, an increase of 6 per cent, compared with 1,891,800 wmt for the same period in 2020. The higher production is mainly a result of higher throughput, despite being partially offset by a lower head grade.

6. Mining operations expenditures

During the three-month period ended March 31, 2021, the total cash cost (2) or C1 cash cost (2) per tonne, excluding specific incremental and non-recurring COVID-19-related costs, totalled $54.40 per dmt, compared with $53.90 per dmt for the same period in 2020. The total cash cost (2) for the period was higher mainly due to a lower head grade and the negative impact of inefficiencies related to COVID-19 preventive measures involving social distancing protocols.

For the year ended March 31, 2021, the company produced high-grade iron ore at a total cash cost (2) of $54.20 per dmt, compared with $52.70 per dmt for the same period in 2020. The C1 cash cost (2) for the year includes the negative impact of inefficiencies related to COVID-19. In the first quarter of the 2021 fiscal year, in line with the company's founding values to maintain a mutually beneficial partnership with its work force, the company opted to keep its full work force on its payroll, despite the reduced operating activities imposed in compliance with the government's public health directives. The increase in total cash cost (2) was partially offset by higher iron ore concentrate sold, stemming from its operational productivity.

7. Exploration activities

There were no significant changes in exploration activities in the three-month period ended March 31, 2021.

8. Qualified person and data verification

Vincent Blanchet (PEng), engineer, for Quebec Iron Ore Inc., the company's subsidiary and operator of Bloom Lake, is a qualified person as defined by National Instrument 43-101, and has reviewed and approved the disclosure of the scientific and technical information related to Bloom Lake contained in this document. Mr. Blanchet's review and approval do not include statements as to the company's knowledge or awareness of new information or data or any material changes to the material and technical assumptions underpinning the feasibility study. Mr. Blanchet is a member of the Ordre des Ingenieurs du Quebec. Mr. Blanchet consents to the inclusion in this document of the Bloom Lake information in the form and context in which it appears. Certain other information contained in this document has been obtained from published sources prepared by third parties and has not been independently verified, and no representation or warranty, expressed or implied, is made with respect to, and no undue reliance shall be placed on, the information or opinions contained herein or in any verbal or written communication made in connection with this document.

9. Conference call and webcast information

A webcast and conference call to discuss the foregoing results will be held on May 27, 2021, at 8:30 a.m. EDT, Montreal time/10:30 p.m. AEST, 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 796831 followed by the number sign.

About Champion Iron Ltd.

The company, through its subsidiary Quebec Iron Ore, owns and operates the Bloom Lake mining complex, located on the south end of the Labrador Trough, approximately 13 kilometres north of Fermont, Que., adjacent to established iron ore producers. Bloom Lake is an open-pit truck-and-shovel operation with a concentrator, and it ships iron ore concentrate from the site by rail, initially on the Bloom Lake railway, to a shiploading port in Sept-Iles, Que. The Bloom Lake phase 1 plant has a nameplate capacity of 7.4 Mtpa and produces a high-grade 66.2-per-cent-iron iron ore concentrate with low contaminant levels, which has proved to attract a premium to the Platts Iodex 62 per cent Fe iron ore benchmark.

In addition to the partially completed Bloom Lake phase 2 expansion project, Champion also controls a portfolio of exploration and development projects in the Labrador Trough, including the Kamistiatusset iron ore project, located a few kilometres southeast of Bloom Lake, and the Fire Lake North iron ore project, located approximately 40 km south of Bloom Lake. The company also owns 100 per cent of the Gullbridge-Powderhorn property located in north-central Newfoundland. The company sells its iron ore concentrate globally, including to customers in China, Japan, the Middle East, Europe, South Korea, India and Canada.

Copies of the company's consolidated financial statements and associated management's discussion and analysis for the year ended March 31, 2021, will be available under the company's filings on SEDAR, on the ASX or on the company's website on May 27, 2021.

(1) Cash on hand includes cash and cash equivalents and short-term investments (excluding equity investments) and excludes restricted cash.

(2) This is a non-international financial reporting standard performance measure with no standard definition under IFRS. Total cash cost includes production costs such as mining, processing and site administration, and excludes depreciation to arrive at total cash cost per dmt sold. Other companies may calculate this measure differently.

We seek Safe Harbor.