Thank you, operator, and thank you, everyone, for joining us on this call today. Before I turn it over to our CEO, David Cataford, I would just like to remind people that throughout this call, we will be making forward-looking statements.

If you want to read more about these and our risks and assumptions, you can visit our MD&A on our website at championiron.com. We will also be using a presentation throughout this webcast, which is also available on our website under the Events and Presentations section.

In addition to our CEO, many other executives are attending here for this call, including our COO, Alexandre Belleau. With that, I will pass it over to David for the presentation.

Thanks, Michael. Thanks, everyone, for being on the call.

So if we run through the results for the first quarter of fiscal year 2027, we produced roughly about 4 million tonnes during the quarter, combining Bloom Lake and Rana Gruber, and sold roughly about 3.3 million tonnes. Revenues of about $357 million during the quarter and EBITDA of about $33 million during the quarter.

If you remove a little bit of noise and one-time elements on the EBITDA, we would have been closer to $60 million. If we remove also the volume effect, then we will be able to run through this.

In terms of the sales, we would have been closer to about $70 million, which would have been in line with the expectations. If we look in terms of the industry, and more specifically the iron ore industry, the P65 index averaged about $122 per tonne, so pretty much flat quarter on quarter.

Same with the premium of the P65 over the P61, close to $17 per tonne. Where there was a pretty significant increase was on the C3 freight index.

This rose by about 37% quarter over quarter and reached about $34 per tonne. So obviously, this has had some impacts for us.

And this is mainly due to the shipping disruptions that we have seen in the Middle East and also higher fuel costs, again resulting from the conflict in the Middle East. If we look at operational and sales highlights, so as we mentioned, produced about 3.9 million tonnes of high-grade iron ore during the quarter.

Sales of about 3.3 million tonnes, of which 3.1 million tonnes were from Bloom Lake and 0.2 million tonnes from Rana Gruber. And one of the, I think, most positive highlights during the quarter is working on the ramp-up of the DRPF project.

So we finalized the flotation plant, and we are now working to be able to produce 69% material to get a significant premium for our material. If we turn to community governance and sustainability, a few highlights during the quarter.

So one, this is the quarter that we closed the transaction with Rana Gruber. So we went down, met with all the employees to be able to start the integration process, and also met with quite a lot of politicians in Norway and also in the town of Mo i Rana to be able to start explaining our vision and the next steps of the combination of this company.

We also had a lot of traction here in Quebec, where we had federal Minister Joly and also Parliamentary Secretary Claude Guay at our offices alongside the Minister of Economy and the Minister of Natural Resources of Quebec to be able to announce the flotation plant finalization and the first contracts for our new product. So very happy with the support that we have been getting from the federal and provincial governments and the partnership that we have developed with these various groups.

In terms of results, so if we dive into each operation, if I look at Bloom Lake, as we mentioned, produced about 3.5 million tonnes at Bloom Lake but only sold about 3.1 million tonnes. This is mainly due to the fact that, one, there was some maintenance on the rail and port operations, and we produced roughly about 0.6 million tonnes out of our flotation plant.

Very positive results. And when we look at the impact of this in terms of sales, so obviously, we have been stockpiling some material of the higher grade, blending some other, but stockpiling material of 69% to be able to sell our first cargo that will start loading in the next few weeks.

So sales were a little bit under what you have seen in the past, but we do see that reversing quite quickly to be able to start selling our two products, the 69% material and also our typical concentrate. One of the highlights when you look at the commissioning of the plant is, if you look at our high iron recovery, we averaged about 79% during the quarter.

So very small impact with the commissioning of the flotation plant. I think it is very positive news and telling of the type of circuit that we have implemented and very reassuring for the future as well.

We were in a ramp-up period, and we are still at 79% iron recovery. In terms of our financial results, so if you look at the actual mining and processing costs at site, pretty much flat year over year.

So I think what we control, we have done a fantastic job in being able to navigate through the current situation. Where we were impacted, well, obviously, when you look at the sales that were 3.1 million tonnes, most of our port costs are fixed, so that has had an impact during the quarter, but that should reverse as we are able to sell more tonnes through the next quarters.

In terms of the sustaining CapEx, it also seems a little bit high. But this is also due to the fact that we only divided that by 3.1 million tonnes during the quarter, and also due to the fact that we have got seasonal tailings work that is being completed at Bloom Lake.

So when you combine both, obviously, our all-in sustaining cost looks a little bit higher, but that should reverse in the coming quarters. In terms of Rana Gruber, they had a little bit of a similar impact, but for different reasons.

Produced about 0.4 million tonnes during the quarter, only sold about 0.2 million tonnes. It is mainly due to the fact that they had vessels that were supposed to go to the Middle East, and due to the conflict, we were not able to ship them out.

So we reallocated those tonnes, but timing-wise, we were not able to sell them in this quarter. They will be sold in the next quarter.

So that is why you have seen such a small sales portion at the Rana Gruber site. It is also, if you look at Rana Gruber, it is a site that has one major shutdown per year instead of two major shutdowns like we have at Bloom Lake.

So they have one major and one minor shutdown. And the shutdown was also during this quarter.

So when you combine all of those elements, and also due to the fact that we only closed the transaction on April 10, so we lost 10 days of potential production and sales at the asset. When you combine all those different elements, that is why we have seen such small sales.

That also has a big impact in terms of the all-in sustaining cost because you are dividing all these costs by only 0.2 million tonnes. But again, that should be able to reverse in the coming quarters.

In terms of consolidated results, if we look at the average realized selling price, we realized around $115 per tonne, below the $121 average for the quarter. That is mainly due to the fact that we had about 2 million tonnes that were on the water and that had an expected price of about $110 per tonne.

So that lowered our gross realized price for the quarter. We will see what the price is when the material reaches the clients during this quarter.

We also had a pretty big impact in terms of freight, where the cost increased to about $36 per tonne in this quarter. In terms of the consolidated financial highlights, we had quarterly revenues of about $357 million and EBITDA just over $33 million, which was under the expectations, but mainly due to the one-time elements during the quarter and also the volume impact of selling only 3.1 million tonnes of Bloom Lake material and 0.2 million tonnes at Rana Gruber.

What is the impact on our cash? So that has reduced our cash during the quarter from approximately $300 million to $200 million, but we did finalize the DRPF CapEx and also closed the transaction for Rana Gruber.

So when you look at those two elements, they explain most of the cash position during the quarter. In terms of the financial health of the company and our balance sheet, we still have approximately $653 million of available liquidity.

So the company is still in very good shape to be able to go through this current conflict. And as we talk about our growth initiatives, see how we are able to get back into cash-positive territory.

If we look at our DRPF project, I think this is the main highlight during the quarter. So we managed to finalize the project on time and on budget, so within the $500 million envelope.

Very happy with the way that things are progressing. All major equipment was delivered as per plan, so we do not see any major hiccups on the commissioning part.

We still have some ramp-up elements, so some small, minor elements to fix, one of which being our screens. The screens work well, but it is the screen panels that were installed that we are currently in the process of changing.

We had that same issue when we started Bloom Phase I and Bloom Phase II. So that is one element that, until we dial in the right type of material that we need for the screens, we do have some bypass material in terms of the flotation plant.

That being said, we still managed to hit 69% material. So we know that the plant is able to deliver in terms of the specs.

We also have been able to push the plant to its full capacity, so we know that the plant can deliver on the volume side. Now it is just to remove all those small start-up and ramp-up elements to make sure that we can do that consistently.

In terms of sales, so we are happy to say that we have signed our first contracts. And the first vessel is going to be loaded in the next few weeks.

So a vessel of about 160,000 tonnes of DR-grade quality material that will leave our port in the next few weeks. So very happy with the way that this is progressing.

We still feel that we will be able to materialize significant premiums for this material. The first contracts that we have signed do have premiums over and above the P65 index.

But as we had mentioned in the past, these are test cargoes. So we are not getting the full benefit of our material.

But still, I think that is going to reposition our costs in the future as we ramp this up and we are able to deliver to markets that are closer to home. If we look at our potential clients, we are in the same territory as we mentioned before, with North Africa, Europe, and the Middle East as potential first targets.

We have included also the Americas, so we are in discussion with some clients also in the Americas. So that is another positive.

If you look at the Middle East situation, so obviously, there is a conflict that restricts a portion of our clients, but not all of our clients. We can still deliver to a portion of the Middle East, so that market has not been closed.

It is still open in various areas. So we will still be able to sell some tonnes into that region even with the current conflict.

So I think a very positive transition for us. I mean, obviously, a lot of noise during the quarter.

Not fantastic when you are closing a transaction, starting to integrate a project, delivering a major flotation project like we are doing, at the same time as a conflict started in the Middle East, impacting our freight costs, impacting fuel. But all that being said, I think we have positioned the company very well to be able to benefit from better premiums in the future and be able to generate significant returns for our shareholders.

I would like to thank all of our employees that have made this possible. I mean, obviously, in this challenging time, to be able to keep the focus, to continue working on our costs, to continue working on our projects, and making sure that we can deliver that safely and with no environmental issues, I think it is something that we can be very proud of our teams.

And we will continue to work in the right direction to be able to make sure that we deliver on what we have mentioned in the past in terms of our growth initiatives, including the flotation plant. So with that being said, I will turn it over to the Q&A portion of the call.

Thank you.

Thanks, Mel. So Dave, you flagged there was a big step-up in CapEx.

It was kind of high for CapEx this quarter. I think you said that you would expect this to trend lower going forward.

Does that mean that we should assume a normalization of sustaining CapEx in Q2? Or do you think it is likely to stay elevated over the next quarter or so going forward?

Well, in terms of dollar amounts, I would expect it to stay similar in the next quarter, maybe slightly lower, but in the same territory. Where I think it is going to have an impact is on our actual all-in sustaining cost because we only had to divide that by 3.1 million tonnes during the quarter.

If we look at next quarter, we should be back to a normal sales territory. So that should allow us to have an all-in sustaining cost that is lower.

And then when we go to Q3, Q4, well, in the past, we have always seen sustaining CapEx be significantly lower in those two quarters.

Okay. And then maybe I can ask a question on the DRPF project.

So just to confirm, you have spent essentially all of the CapEx now, correct?

Correct.

Okay. And then you mentioned the first vessel will be leaving the port in a few weeks.

Are you able to share which direction that is heading?

It is going to go east. Thank you.

Hi. Good morning.

And I wanted to congratulate Michael, actually, on his promotion to CFO. But in terms of my question, your inventory levels this quarter were very elevated.

There was a significant jump at both assets. Do you think this is peak inventory levels?

And can we anticipate now that, with vessels scheduled to go this quarter, we should see that inventory start to destock? And if you could give us any kind of idea by how much, because I am not clear whether there are more inventory impacts expected here with the DRPF ramping?

Yeah. When we look at a lot of the inventory, I mean, we now report the combined inventory at the port and at the mine, and we have got quite a lot of material that is actually at the Bloom Lake port.

But we had to stockpile some material mainly due to the flotation plant. So the first sale is going to start loading.

The first vessel of this material is going to start loading in the next few weeks. So that is why we have had to stockpile that portion.

But when I look at Bloom Lake going forward, I would not expect the stockpiles to increase. We are really in the territory of being able to bring down the stockpiles.

Okay. Okay.

And then from a balance-sheet perspective, your net debt obviously significantly increased this quarter, largely due to the acquisition, but also because of just the inventory. Do you see this as peak net debt?

Because I am getting a little bit concerned just in terms of the one direction your debt has been rising here.

Yeah. When we look at the next steps within our company, so obviously, most of the CapEx is behind us.

I mean, all the CapEx of the DRPF is behind us. There is a very small sustaining CapEx at the Rana Gruber site, and we are in a territory now when you look at this quarter, there are probably 600,000 to 700,000 tonnes less sales that should have happened, mainly due to the ramp-up of the flotation plant and this new product.

So when I look at the next steps, obviously, for us, it is going to be to work on deleveraging the company. So we just finished quite a big CapEx run, but I do not see areas where we want to increase the debt in the future.

And one more, if I could just squeeze it in. In terms of the premium on the DRPF, you mentioned that you have now priced some of the test cargoes.

When do you think, as you look ahead over the next couple of quarters, we could actually see that premium start to make an impact on your average realized price?

I think we are going to start to see it next quarter, but really Q3, Q4 is when we are going to see a bigger boost as we get more and more tonnes out of this flotation plant. Thank you.

Yeah. Thanks.

Good morning, guys. Just maybe a follow-up on Orest’s question on the DRPF premiums.

The fact that you are selling test material now, is there a mechanism, if it meets spec, where you get a higher price? And I guess my kind of follow-up question to that is sort of how long, how many cargoes would it take for them to establish a comfort level that you could realize a much higher price over and above the P65?

Yeah. We are going to get a premium even in the test cargo.

So just the fact even of the iron units and the fact that we are going to sell closer to home. So I mean, even in the test cargoes, we are going to see a premium, not to the level of what we had in our feasibility study, and that is where the negotiations come for the next cargoes.

Depending on the clients, most clients, once they have used up material from one cargo, it is enough to have a view on how well this functions in their plants. So I do not expect it to be multiple cargoes to be able to get that comfort.

And then it is more a question of making sure that we are able to sign the right contracts at the right level for this material. But I would expect the test cargoes to be more than about one per client.

Okay. And then just on Rana Gruber, I know you guys do not provide guidance, but can you give us any comfort in terms of where you kind of see the steady-state C1 cash cost going and all-in sustaining cost?

Obviously, all-in sustaining costs were very high this quarter. But just trying to get a sense of where you see these assets settling out at once you guys kind of get back to full throughput.

Yeah. So when we look at the Rana Gruber site, the fact that they only sold 0.2 million tonnes was really the biggest impact during this quarter.

So this should normalize even in this current quarter. So I do not think that there is going to be a significant impact like what you see now.

In terms of their costs, I mean, they have been hit a little bit in terms of the fuel price, like a lot of people have. But realistically, I do feel that we will be able to get into a more normal all-in sustaining cost, similar to what you have seen in the past with the Rana Gruber site there.

So the asset should be, would you say, free-cash-flow generative in the sort of second half of this year?

Well, I do not have a crystal ball. But realistically, when I look at selling prices, I guess, yeah, at spot prices, yes.

Okay. And then just maybe one last question for me.

Just an accounting question. Just when you guys report your adjusted EBITDA, I was curious why you kind of include some of these derivative adjustments or why you do not back them out in terms of what you report.

Thanks.

We have never done it in the past. So that is why just to do it now would have been a little bit odd.

Okay. Makes sense.

Thank you.

Thanks, operator. Good morning, guys.

I am just trying to get a little bit more granularity in terms of this inventory build and sort of the blending strategy. So if I understand correctly, you are just stockpiling the DRPF product until you can start shipping it with, yeah, like full vessels, basically, and the other stuff is going out as planned?

Or is there, like, a blending strategy? Is it vessel availability?

Just what is it? Thank you.

Yeah. So when we look at the strategy that we are taking, we have always been of the view that what is very good for us is to build high credibility in terms of the quality of the material that we produce.

So we did the same when we did Phase I, when we brought in Phase II as well. What we are doing right now, if the material is on spec, we are stockpiling it as DRPF material.

If it is a little bit below spec because we are doing tests, we blend that material with our concentrate. So it is not really a blending strategy per se.

It is more a ramp-up strategy to make sure that everything that we sell, especially the test cargoes, the last thing that we want is to send material that is not as per spec. But the plant has been functioning pretty well, so we have produced more of this on-spec material than we initially expected.

But when we look at the strategy, it is really everything that is 69% Fe, or that is high-grade, DR-grade quality material, is being stockpiled to be able to set apart so that we can sell it as a separate product.

Oh, that is much clearer. Thank you for that, David.

And then there is some language in your disclosure that suggests that there will continue to be disruptions over those, let’s call it, the next six months or so as the DRPF plant ramps up. Can you give us any sense at all in terms of sort of the cadence of those disruptions?

Are these material or just minor disruptions? I would say these are minor.

It is more, when I look at the fundamentals of the plant, I think it has delivered on all the major equipment. We still have some elements to work through in terms of the ramp-up, but they are smaller elements.

They do have impacts in terms of our production, but it is not a major failure where we have to change one of our main pieces of equipment and we have to wait on lead times and so on, installation. So it is more just ramping it up, making sure, as we mentioned, let’s say the screens, there is going to be some downtime to change them.

We are going to test them. Is this the right one, or is it going to be a small modification?

Modification on the one that we are testing now? So there are going to be some elements.

But it is really more on the stability side that there are going to be some impacts and not so much on major downtimes.

Okay. Thanks.

And then just maybe one last one on the premiums, to follow up on the previous questions there. If we assume that now you are shipping on-spec product under long-term contracts, what is the quantum of that premium that you think you will get?

It will be the best premium that we can get for our shareholders. I mean, obviously, we cannot disclose the number now because we are in negotiation with many clients.

But when I look at the market right now, I do feel that there is a lot of demand for this type of material, even if there is a lot of noise right now. And when you look at the premium for the high grade, I mean, you look at the Chinese steel mills, you look at the profitability, you look at the price for coal, you look in a lot of directions, it seems to be showing that high grade is maybe not as favored.

But realistically, when you look at the direct-reduction pellet premium, it is up. When you look at the quality of what is being produced by a lot of the majors, it is going down.

The fundamentals are there for us to be able to make this a significant premium for our material, and I think the timing is very good for us to be able to deliver this into the market now.

Thanks, David, and congrats to Michael. That is all for me.

Thank you.

Thank you very much, operator, and good morning, everyone. First of all, I just want to join my colleagues and congratulate Michael Marcotte on his appointment.

And my first question: Can you quantify how much of fiscal Q1 output was deferred into fiscal Q2 because of DRPF commissioning and shipment timing? And should we expect substantially all of those deferred volumes to be recognized in the September quarter, assuming a normal shipping schedule?

I am not going—we do not really give any guidance. But when you look at the last quarter, I mean, we produced 3.5 million tonnes, sold only 3.1 million tonnes.

When you look at the stockpiles, most of the material is at the port. So I do feel that we should be in a position to have higher sales in Q2.

Thank you. It is clear.

And my second one is about DRPF. If you can just frame what portion of Bloom Lake’s near-term production is covered under the commercial agreements and what percentage approximately of total DRPF output that represents versus the volumes still open for discussion with prospective customers?

When we look at Bloom Lake, about half of our tonnes are committed in terms of the concentrate production. So that is for the typical concentrate.

In terms of the flotation plant, obviously, we are still in the ramp-up phase, and we are signing contracts right now. We have two contracts in place, and we are working with other clients to be able to finalize that portion.

But essentially, when we, let’s say, look at this a year from now, we will probably have about 75% of the tonnes of the flotation plant allocated and most of the tonnes of the concentrate allocated as well.

Thank you very much. And my last one is about the macro environment.

With the conflict in the Middle East, do you see any opportunity in capturing an extra portion of the Middle East market? Right now, there is still a portion of the market open for business.

When we look at it, everybody is waiting, I would say, in the restricted areas. But as soon as vessels are able to go into that region, I do feel there is going to be appetite also for our material.

So it is still, I think, one of the major areas for us to be able to sell our tonnes. But that being said, we are not just waiting to see what is going to happen.

We are also in discussions with other clients in North Africa and Europe and also in the Americas to be able to allocate these tonnes.

Thank you very much. That is crystal clear.

And continued best of luck. Thanks.

Yes, great. Thanks very much.

Just curious, we have already sort of asked this question a few times, but maybe just another way of asking it. You mentioned that you produced 0.6 million tonnes of concentrate through the DRPF plant.

Obviously, not all of that is to spec, but you are looking to make your first shipment at spec at 160,000 tonnes this quarter. Can I read between the lines there and sort of assume that about a quarter of what you did in the quarter, or a quarter of the production last quarter, was on spec and the rest was not on spec?

Yeah. What is tough when you look at it is that obviously, if we are only producing for a few hours and then we had to stop, well, even if the material was on spec, it was blended with all the rest of the material.

So I mean, I would not see it exactly like that. I think the plant has been delivering very well in terms of quality.

But when we look at the various runs, why we say that there are roughly about 160,000 tonnes for the next vessel, it is just because that is actually material that we have stockpiled in specific areas to be able to sell this. But I would not say that our plant is performing at 25%.

I mean, obviously, the first days that we started, it was just to test the equipment. So even if material passed through the plant, we did not really—even if we did check the quality, the intent was not to stockpile that to be able to have a separate product.

So I would say the plant is performing much better than that 25% ratio. It is really just what we have stockpiled specifically to be able to sell as DR-grade quality material.

Okay. Okay.

Got it. Got it.

And then maybe just from a bigger point of view, obviously, still just the looming stockpiles at Bloom Lake in general. Should we still anticipate it is going to take several quarters from now to really draw that down to sort of, quote-unquote, normalized levels, just given port and rail as well?

But when I look at Bloom Lake in terms of the stockpiles, there is quite a lot of material that is already at the port. So it is just a question of getting it on the vessels.

When we look at the strategy to bring down the material, I do think that there is some spare capacity on the rail right now. So I would not expect the holdup to be on the logistics side, at least not in the short term.

So I do expect that we will be able to ramp down the tonnes of the stockpiles pretty quickly. In terms of Rana Gruber, the strategy is to pretty much have no stockpiles, so that is not the intent.

It was a bit of a timing issue now because some vessels were supposed to go to the Middle East and we had to redirect them. But apart from that, going forward, there should not be stockpiles or material stockpiles at Rana either.

Okay. Okay.

Okay. Thanks very much, guys, and congratulations again to Michael.

Thanks.

Good morning, and thank you for taking my questions. And I will pass along my congratulations to Michael as well.

I just want to go back to the question about the test cargoes. I think you said, obviously, you are not getting the premium of the feasibility study, but you are still getting a premium.

And then you said you get the benefit of the freight. I just want to make sure—the premium, obviously, freight has changed since that feasibility study too.

Are you still getting, you know, a premium high enough to cover the cost without the freight? Or are you sort of saying, with the freight, it all still works on the test cargoes?

I do not know how much color you can give me on that, but that is what I am trying to figure out.

Yeah. Thanks, Brian.

So even for the test cargoes, we will be able to make more money than the operating cost of the flotation plant without any benefit from freight, because that has changed too. Right?

So the premium is higher than the cost, and then the freight differential is the freight differential. Right?

Yeah. The only thing that is difficult to answer specifically on that is it is sort of a package in terms of the contract, right, the way that we sell it.

So if a client prefers to have a bigger discount on the actual freight, but then less on—I mean, for us, it is really a package deal. So it is tough to break it down.

Okay. Thanks very much.

That helps.

Thanks, everyone, for being on the call. I just want to take a few seconds to congratulate Michael on his new position and thank everyone for your support.

I know it has been a quarter that has had a bit of noise, but I just want everyone on the call to know that we are working extremely hard to be able to navigate through these challenging times with the conflict in the Middle East. But at the same time, we have got quite a lot of upside within our company, having delivered this flotation plant.

It would be tough to start that project today, but now that it has been built, I think we are going to be able to separate ourselves from a lot of the material out there, and we will be able to still get benefits even if the decarbonization agenda has slowed down. I think when I look at the quality of the material that is being produced worldwide, I do think that is where we have the best potential to be able to materialize premiums for our material.

And as you know, we have always got the potential strategy of blending all of our material together and being able to have 100% of Bloom Lake material that is still DR-grade to be able to sell to potential clients closer to home. I think we have got a lot of flexibility built into our company.

And we are going to continue working to make sure that we get back into cash-positive territory, obviously, and start working on deleveraging our company. So again, I would like to thank everyone for being on the call and look forward to being able to present the next quarter’s results.

Thank you so much.