Champion Iron Surges with Record Sales and On-Track DRPF Project
Champion Iron Limited reported a robust FY2026 second quarter with record sales, improved earnings, and steady progress on its DRPF project, while declaring its ninth consecutive dividend.
- Record quarterly sales of 3.9 million dry metric tonnes
- EBITDA more than doubled to $175 million
- DRPF project commissioning expected December 2025
- Ninth consecutive semi-annual dividend declared
- Strong liquidity position following $500 million senior notes issuance
Strong Operational Performance Amid Ore Hardness Challenges
Champion Iron Limited delivered an impressive second quarter for FY2026, with production rising 12% year-over-year to 3.6 million wet metric tonnes of high-grade iron ore concentrate. Despite encountering harder ore in certain pits, the company offset this with operational optimizations, achieving improved recovery rates and record mining volumes. The company also reduced its iron ore concentrate stockpile at Bloom Lake by nearly half a million tonnes, reflecting strong sales momentum.
Financial Results Highlight Robust Earnings and Cost Efficiency
Financially, Champion Iron posted revenues of $493 million, a 40% increase from the prior year’s quarter, driven by an 18% rise in sales volume and favourable pricing adjustments. EBITDA more than doubled to $175 million, with margins expanding to 35%. The company’s cost discipline was evident as the C1 cash cost per tonne declined 7% quarter-over-quarter to $76.2, while all-in sustaining costs also improved. Net income surged to $56.8 million, translating to earnings per share of 11 cents, up from 4 cents a year earlier.
DRPF Project Progresses on Schedule
The Direct Reduction Pellet Feed (DRPF) project, aimed at upgrading half of Bloom Lake’s capacity to produce premium 69% iron ore concentrate, remains on track for commissioning in December 2025. With cumulative investments surpassing $400 million, the project is poised to begin commercial shipments in the first half of 2026. Champion is actively engaging prospective customers in regions including the Middle East and North Africa, anticipating pricing premiums for the higher-grade product.
Strategic Partnership Advances Kami Project
Champion formalized its joint venture with Nippon Steel and Sojitz for the Kami Project, completing initial cash contributions totaling $68.6 million. The definitive feasibility study is underway, with completion expected by the end of 2026. This partnership strengthens Champion’s foothold in the Labrador Trough and complements its Bloom Lake operations, potentially expanding its portfolio of high-quality iron ore assets.
Strong Balance Sheet Supports Growth and Shareholder Returns
The company’s liquidity position remains robust, with available liquidity reaching $840 million, bolstered by a $500 million senior unsecured notes issuance earlier in the year. Champion declared its ninth consecutive semi-annual dividend of 10 cents per share, underscoring its commitment to returning value to shareholders while maintaining financial flexibility for growth initiatives.
Bottom Line?
As Champion Iron advances its high-grade product strategy and key projects, investors will watch closely for DRPF commissioning milestones and Kami Project developments.
Questions in the middle?
- How will the DRPF project impact Champion’s production mix and pricing power in 2026?
- What are the key risks and timelines for the Kami Project’s definitive feasibility study and development?
- How will ore hardness fluctuations affect operational efficiency and costs in upcoming quarters?
