Champion Iron Q4 production drops 7% due to lower head grade, throughput

Champion Iron (TSX: CIA; OTC: CIAFF) has provided operational results for its fiscal fourth quarter and full year ended Mar. 31. The company owns and operates the Bloom Lake mining complex, located on the south end of the Labrador Trough, approximately 13 km north of Fermont, Que., and 10 km north of the Mont Wright iron ore mining complex held by ArcelorMittal Mines Canada.

The Bloom Lake Phase I project currently has a nameplate capacity of 7.4 million tonnes per year over an initial mine life of 21 years. The Phase II expansion project, which is nearing completion, proposes a nameplate capacity of 15 million tonnes annually with an estimated 20-year mine life.

During its fourth quarter, the Bloom Lake operation produced 1.9 tonnes of high-grade 66.2% iron concentrate, a 7% decrease compared to the 2 million tonnes of high-grade 66.5% iron concentrate produced in the same period last year.

The drop in production was attributed to a lower head grade and lower throughput. The plant processed 4.9 million tonnes of ore during the three-month period, compared to 5.2 million tonnes for last year.

A total of 10.5 million tonnes of material were mined and hauled during the quarter, compared to 9.4 million tonnes in the fourth quarter 2021, representing an increase of 11%. The current strip ratio is in line with the company’s revised mine plan, which includes preparation for Phase II operations. The increase in material movement was enabled through additional operational equipment.

The iron ore head grade for the three-month period was 30.3%, compared to 30.7% for the same period in 2021. The variation in head grade is attributable to the presence of some lower-grade ore being sourced and blended from different pits, which was in line with the mining plan and the life-of-mine head grade average.

Additionally, the company’s average iron recovery rate remained stable quarter-over-quarter (82.7% versus 82.6%) as a result of a constant recovery circuit.

For the full year, production was 7.91 million tonnes of high-grade 66.2% iron concentrate, compared to 8 million tonnes of high-grade 66.4% iron for fiscal 2021. Its year-on-year recovery rate was also stable at 83.2%, compared with 83.5% in fiscal 2021. Head grade was 0.8% lower than last year’s at 29.9%.

Due to higher fuel prices, longer haul cycle times associated with the current mine plan, and the use of additional equipment, Champion Iron’s reported total cash cost for the quarter increased to $60 per tonne, compared to $54.4 per tonne for the same period in 2021. Its full-year cash cost amounted to $58.9 per tonne, compared to $54.2 per tonne last year.