Good morning, ladies and gentlemen, and welcome to the Champion Iron Limited Fourth Quarter Results of the Financial Year 2025 Conference Call. [Operator Instructions] This call is being recorded in Thursday, May 29, 2025. I would now like to turn the conference over to Mr. Michael Marcotte. Please go ahead.

Thank you, operator, and thank you, everybody, for joining our call today to discuss the fourth quarter results of our 2025 financial year. Before I get going, I'll just remind people that we'll be using a presentation which is available on our webcast at championiron.com under the tab Events and Presentation. I also like to remind people that throughout this call, we'll be making forward-looking statements. If you'd like to read more about these forward-looking statements, risks and assumptions, please go and visit our MD&A, which is also available on our website. Joining me here today to the presentation includes our CEO, David Cataford, who will be doing the formal presentation and Q&A. And also, we have our CEO, Alexandre Belleau, and our CFO, Donald Tremblay. With that, I'll pass it over to David to do the formal presentation.

Thanks, Michael. Thanks, everyone, for being here. Very happy to be able to present the fourth quarter highlights for fiscal year 2025. So during the quarter, we produced about 3.2 million tonnes and the big highlight for the quarter is we managed to set a record of 3.5 million tonnes of concentrates sold even in a more challenging winter environment, where logistics are typically a little bit more complex. Turning over to community, governance and sustainability. One important highlight is that we've continued to work closely with our First Nations partner, not only on operations and on mining side but also on the culture side where we participated in various events during the quarter to be able to continue strengthening our relationship with the First Nation community. In terms of our ESG disclosure and performance. So one big highlight is that during the fiscal year 2025, we successfully met or exceeded 13 out of the 14 sustainability targets for the 2025 year. Again, one of the elements to highlight is that we continue to be an industry leader by recycling about 99% of the water at Bloom Lake. In terms of operational and financial results, as we mentioned, produced about 3.2 million tonnes during the quarter. There were some issues during this quarter, one that was forecasted, so we did have our semiannual shutdowns for plant number 1 and plant number 2. But we did have some grinding difficulties with some harder ore in one of the East pits at the Bloom Lake site. In the past, what we have done is increase the blending ratio to be able to mitigate that. But now due to the fact that we've got a significant stockpile at site decided to be able to hit that material more head on and be able to continue destocking the stockpile at Bloom Lake. If we look at our stockpile, we managed to decrease it by about 300,000 tonnes. So we're down to about 2.6 million tonnes on the site at the end of the last quarter. In terms of our operations, if we dig a little bit deeper, we can see that all the new equipment and the mining fleet that we have in place allows us to move more material, and we managed to move quite a lot of waste during the quarter, increasing our strip ratio to about 1.15, allowing us to maintain the mine in a healthy position, open up new faces and make sure we've got some decent blending capacity for the future. If we look at the industry in terms of the P65 index was fairly flat during the quarter, about a 1% decrease where we did see some movement was on the C3 freight index were decreased by about 10% quarter-over-quarter. And that's even despite what's going on in the Middle East and the fact that certain routes had to be -- or have to be changed with the current conflict that we see in the Middle East. In terms of our provisional price adjustment so during the quarter -- at the end of last quarter, we had forecasted selling the tonnes that were on the water at about $110. We managed to sell them at about $112 so had a positive provisional price adjustment of about $3.7 million during the quarter. If we look at what's for the next quarter so we had about 2.7 million tonnes that were on the water and we expect to have a settlement price or we expect to have a settlement price of about $111 at the end of last quarter. Turning over to our average realized selling price. So obviously, having 2.7 million tonnes set at $111 at the end of the quarter has impacted our gross realized price during the quarter. So you can see that -- if you look at the average P65 during the quarter, our gross realized price was slightly lower. Two main reasons. One, well, as we mentioned, those tonnes on the water at the end of the quarter. But also when we look at the current situation in China, so high-grade material, like what we produce at Bloom Lake, we had told the market last quarter that we were having slight discounts in China to be able to sell our material. Again, we do not have long-term contracts for about half of our tonnes as we're transitioning towards DRPF material or higher grade type material so which meant that we had slight discounts during the quarter. But I just want to tell the market that we did not have any quality issues, we've got increased contaminants or decreased quality. We still manage to deliver every single vessel on spec, and we do not have any significant contaminants in our material. In terms of our operating costs, slightly higher at about CAD 80 per tonne. Two main reasons. Well, one, obviously, the 2 semiannual shutdowns during the quarter did impact our costs and at the same time, lower production of 3.2 million tonnes has also increased our cost. The best way for us to be able to reduce our cost is to increase productivity and to increase the amount of tonnes that we produce at Bloom Lake. So that's definitely going to be the priority for this year. In terms of our financial highlights, about $425 million of revenues, $130 million of EBITDA and earnings per share of about $0.08 per share. That allowed us to have a positive increase in terms of our cash position of about $24 million, even while we've invested about $50 million on our DRPF project, so to finalize the flotation plant and also reinvesting about $50 million in sustaining CapEx to maintain our assets in great condition. Look at our balance sheet, still very healthy balance sheet with about $1 billion of available liquidities. And when we look at the results allowed us to be able to declare our eighth semiannual dividend of $0.10 per share. What's interesting when we take a little step back and we look at what's happened over the past years, so since 2017, we've generated quite a lot of cash from our operations, over $2.6 billion generated from our operations in the past years, which allowed us, one, to return directly about $400 million to our shareholders but also invest about $2 billion in our growth CapEx and self-fund all of this without issuing any equity. This allows us to have a very strong foundation and come next year while we get out of a 7-year CapEx run to grow organically our business. So we're finally going to be able to start benefiting from all of those investments and being able to benefit from lower CapEx for the next few years as all we will have is sustaining CapEx in the next few years. So very well positioned to increase the cash flow generation in the coming years. Turning over to our projects. So we have 2 major projects that we're working on right now. One where we're investing and one where we will have minimal shareholder money that will be invested in the next years. The Kami Project which we're now doing the permitting and doing the feasibility study alongside with our partners of Japan Steel and Sojitz. So when we look at the Kami Project, we have about just shy of 2 years to be able to finalize the permitting and the feasibility study. At the end of those 2 years, we'll be in a position to see where is the market, what's the demand for DR type material and what's the right potential timing for this project. So we still have about 2 years where very minimal cash from Champion will be invested. Most of the cash will be invested by our partners. And as we go forward, we'll be able to update the market on the next steps for the Kami Project. But the most interesting project right now, shorter term for us is the investment that we're making to transition our material to DR grade. We've already invested about 72% of the CapEx to be able to deliver the flotation plant. We have about 28% remaining CapEx to invest in the coming months, and we still feel confident we'll be able to deliver the plant by the end of this calendar year. I don't think it's possible to do a call without addressing the tariffs. One interesting highlight for us is, as you know, we do not sell our tonnes into the U.S. market. So we don't have direct sales impact in terms of our sales due to tariffs. Short term, you've probably seen a global economy uncertainty and a potential slight reduction in steel output. But realistically, we haven't seen a significant impact right now in the world in terms of steel demand and steel production. Longer term, we do see some potential benefit for us as the U.S. potentially increases the amount of steel that they produce. Today, the U.S. is a net exporter of scrap. And as potentially more tonnes get produced in the U.S. while those scrap exports might be reduced in the future, which means the clients for that scrap will then search for other types of metallics, including DRI-type material. So again, when we look at our longer term strategy of producing a material, even if we see that today, the premiums for higher grade might be a little bit pressured, we do still think that the strategy longer term is to go towards higher grade, go towards DR grade and be able to produce this type of material. In terms of green steel transition, so we -- when we're in North America, it seems that decarbonization has been put on pause. But when we look at the rest of the world, that's not necessarily what's happening. Again, when we look to Japan, recently, what was announced to be able to have subsidies of about USD 350 per vehicle that uses lower emission steel, we do see that there are paths right now that are continuing to be able to reduce the CO2 emissions in the steel production. If we turn to China, we also see China included the steel industry in its emission trading scheme. So we do see that even if today, the higher grade type material is maybe not the most favorite material, I do still believe that, that will be back more in vogue and we'll be able to continue benefiting from a higher premiums in the future for higher grade type material. So all in all, I'd like to thank our team to having allowed us to reach those results. and being able to deliver yet another quarter and another year where we generated significant cash flows for our shareholders and be able to return another dividend of $0.10 per share. That being said, I'll turn it over to the Q&A part of the call.

[Operator Instructions] Your first question comes from the line of Orest Wowkodaw from Scotiabank.

Some color, please, on this ore hardness issue that you flagged. Is that I guess, first question, how long is that expected to continue? And is that impacting both throughput and recoveries or just recoveries?

So when we look at the impact, one, well, as you know, we have autogenous mills. So when we have harder type material, obviously, it impacts throughput at our plants and typically will produce a little bit more fines which are more complicated to recover in our recovery circuit. This is not new type material. So when we look at the Chief's Peak, which is on the eastern part of our site. Typically, material that we've blended in the past and hasn't necessarily impacted our operations. Now we got pretty much about 100% of the fee during the quarter from that area. So that's why we saw a bit of a larger impact. But realistically, there's ways for us to be able to work on the recovery as we get towards the flotation plant as well. Well, obviously, that's going to have less of an impact when we have potentially harder ore because the flotation plant, we are regrinding our material anyways and will be easier to recover finer iron particles. But for the ore hardness, the strategy that we've had in the past was more to be able to blend that type of material.

Sorry, but can you give us a sense of like, if you're taking on head on here, how long is that expected to be the majority of the feed?

Yes. When we look at even what we've seen more recently, I mean we've rarely had 100% of that material fed into the plants. But realistically, we can react when we see that type of material. That's why you see that we've invested constantly on the stripping side to make sure that we have a lot of faces that are open. But our strategy this year is really to try to bring down as much as we can in the stockpile and if we can potentially put a little bit more of that harder ore during the year during -- into our plants. Well, it's definitely a strategy that we're going to do this year. But it's not as if you look at our project and our mine life of about 18 years, well definitely, that's not something that is going to be consistent of having harder ore without us blending it.

Okay. So are you saying that you're actually purposely taking down production I suppose, to deal with the harder ore because you have the ability to destock the inventory?

Well, I mean, if you look realistically, there's no -- I mean, we're not purposely reducing the throughput. And if you look at our grinding, if we would put this material with material that is, let's say, easier to pass through our mills while we would have slightly improved productivity. But on the other hand, if we would put exclusively material that goes well through the plants, while we would far surpass our nameplate capacity so if you look at our ore body, it doesn't change. So if you look at the sort of ratio of this harder ore that we put, it's either we blend it in a more stable way or we put it a little bit more head on into our plant. So we're not purposely reducing the production. But if we didn't have the stockpile on site right now, definitely, we'd be lending but right now, the strategy we're taking is to be able to pass more of that material in the plant.

Okay. And just a final one quickly. Is -- are you still taking a discount on sales of Canadian iron core is that now passed in the market?

We still have a discount right now. I mean it's mainly due to the fact that a little bit less in terms of the Canadian ore a little bit more due to the fact that we've got about 8 million of our tonnes that are sold on spot. So the spot market right now gives discounts to the P65 for material like ours. When we get to the DRPF, we're going to sign longer-term contracts and then we're going to be more on a contracted basis. But on the spot market right now, we still have discounts for our material compared to the P65.

Your next question comes from the line of [Feather Chevlin] from B. Riley Financial.

My first question is about the cadence of destocking. So you outlined 340,000 metric tonnes iron ore concentrate stockpiles of Bloom Lake reduced, which is a strong start. How should we think about the pace of this destocking going forward? I mean is it reasonable to expect similar rate? Or could we see an acceleration to around, say, 400,000, 500,000 tonnes per quarter?

Well, the strategy for us is not to hold any tonnes on the stockpile. So we're not going to go slower than what the rail operator can be able to pass. We're working closely with them to be able to maximize every single opportunity we have to be able to destock those stockpiles. And it's really something that we're working day to day with the operations to make sure that we can bring them down as quickly as possible. Realistically, when we look at what's been invested on the rail in the past, so there are some new locos and quite a lot of new railcars that are now delivered and in the function. We have had some creative strategies with the rail operator to be able to improve efficiencies and we'll take all those opportunities. But at the same time, we are getting in the summer months where there is some maintenance on the rail, and there will be some slots of time that are put aside for repairs on the actual rail. So again, our strategy is to be able to maximize that as quickly as possible. Our understanding is that the rail operator is also aligned to be able to respect their contracts and make sure that we bring down all of the tonnes and we'll try to get those tonnes down as quickly as possible.

But could you provide more detail on the nature of this scheduled maintenance work at both the mine and on the rail network and specifically, what kind of activity is planned? And how should we think about the operational impact of these maintenance efforts on production and how it will over the coming quarters?

Well, we've had, I mean, in the past, probably 50 years, that's always been the way the rail operates so from June to September period, there is some scheduled maintenance on the rail as we do have on our plants and to make sure that we keep all the equipment in line so they need to replace certain rails. They need to do some reparation. So that's typical and that would be more something happening during the quarter. I mean it's not something that shuts down the rail for a month's time, but there are some days that are used to be able to repair the rail during the quarter.

And my last one is about the macro environment. What are you hearing about the current state of the Asian steel markets and given that your sales in the region? And how is demand for your product evolving in that region. Additionally, if you can provide some color into the appetite for DR-grade material specifically from this region?

When we look at the -- our main focus, obviously, for the DR material is to be able to sell closer to home. So yes, we're spending time understanding the demand in China and potentially in Japan. But realistically, our main focus for us is to be able to sell more into Europe, North Africa and the Middle East so that's where we're spending some of our time understanding the market and the demand for the DR material. And we do see some significant demand for this type of material. When we look at what's happening in China, yes, today, there is a little bit less appetite for the higher grade. But at some point, if you look at what China is doing to be able to add steel in their sort of emissions regulations, well, definitely, at some point, they're going to start shutting down some less efficient steel mills and be able to focus more on the newer, more productive ones, which is probably going to, in turn, bring back the demand for higher grade type material, like ours. And even we've been questioned quite a lot in the past on what happens when some new project comes on. Everybody is talking about the iron ore content, but I think it's important to take a look also on the contaminants potentially in Simandou and what we have been hearing is [ Alu ] is going to be quite high from material from that region. We're already seeing some strategies in China to have blending hubs to be able to blend material from Simandou with lower alumina type material. So the advantage when you look at Bloom Lake material, well, we've got a very, very stable quality. We've got potential to be able to increase the grade as we're doing right now and we've got basically no contaminants. So not only are we good as a high-grade DR material, but we're an amazing blending material as well. And if you look around the world, while Rio's announced that they've lowered their quality, we've seen Vale announce the same as well and yet we're still there making one of the highest quality materials in the world. So I do think that there's some upside for premiums in the future, not just in Asia but also around the world.

Your next question comes from the line of Craig Hutchison from TD Cowen.

Can you just provide some context in terms of what your strategy is for marketing the DR material? I guess you have 8 million tonnes available. Is the strategy kind of out of the gate to blend the 69%, what's your 66% and kind of produce an intermediary product? Or do you plan to sort of try to market the 69% out of the gate?

So our strategy is definitely to be able to sell a distinct product, so to sell 69%. That's our current strategy. Obviously, when we start up the plant and we ramp up the plant, our main focus is going to be to minimize the impact on our production. So the first few months definitely will be blending the material with our 66% and demonstrating the plant and all of the operations of the plant. But it's not our longer-term strategy, our longer-term strategy is to be able to sell a distinct 69% material. The way that we're negotiating all of our contracts right now is to have a distinct 69% type material.

And when do you expect to have contracts in place?

Yes, we'd like to have the first contract in place by the end of this calendar year. So I think that's a good time frame allows us a little bit more time to be able to negotiate with our clients to make sure that we have the best win-win solutions to be able to sell our material.

And just how about on costs? I know you guys are trying to drive down costs, and you've been impacted by some of these issues with rail, but what's your long-term goal, assuming a steady-state operation in terms of your all-in sustaining costs at Bloom Lake.

Yes. So it depends what longer term is. So when we look at the next sort of 2 years, there's still investments being made on our tailings facilities to make sure that we get them to the right expansion level also on the waste dumps, so as per our feasibility studies. So that's going to eventually ramp down. So that's going to bring down our all-in sustaining cost because apart from the tailings while there's pretty much the mining equipment that takes up a large portion of the sustaining CapEx, and there's pretty minimal CapEx being invested on other elements. So that definitely is going to drive down our costs. In terms of our operation, as you know, the best way for us to be able to reduce our cost is to maximize production. So that's definitely something that we're working on. And the final part, it's really a big focus for this year is to work on making sure we could get that recovery of iron ore back to the levels where we had in the past. So that's definitely going to drive down the cost as well. So I think the main ways that we will be able to drive down the cost short term is with these elements. And the final piece where I think we're going to be able to save quite a lot is going to be on the shipping as well. So when we look at selling our DR material. If we sell it to Europe, sell it to North Africa, that's definitely going to reduce our shipping cost as well.

[Operator Instructions] Your next question comes from the line of Scott Taylor from Pembroke Management.

The recent quarterly report mentions that you've now spent almost around $340 million on your DR project against an estimated total cost of $470 million, but there was a date given of that cost being January '23. So I just wondered how good an estimate is that at this stage for the final completion estimate?

So the estimate is still good. So we're still on track to be able to deliver the project on time and on budget there.

That's very commendable. And one last quick question. The 2.6 million tonnes of extra inventory that you had. If that was all liquefied today theoretically, what would that represent in terms of after-tax cash to the company?

That'd be about $250 million of EBITDA. So if you look at our effective tax rate, probably around 170-ish.

There are no further questions at this time. I would like to turn the call over to Mr. David Cataford for closing comments. Sir, please go ahead.

Yes. Thanks, everyone, for being on the call. Thanks for your support as well. I think the -- we've been on a journey to be able to produce one of the highest grade materials in the world. There's a bit of noise in the world right now, but I still think it's the right strategy to maximize revenues and to maximize our margins in the future. Still very happy about the way that the teams have been managing as well because I mean, to deliver 3 major projects on time and on budget in the mining space is quite rare and very proud of what we've been able to achieve, to be able to set the foundation of this company for the next decades. I think finally, we'll be able to be out of a large CapEx run at the end of this year and be able to fully benefit from all of the investments that we've made in the past. I'd like to thank all of our shareholders' support -- for the support that you've given us over the years to be able to achieve that position. I know there's a bit of questions on what will be the exact premium, how are we going to benefit from this project, but I do feel confident that we're going to sign the right contracts for this material, and we will generate significant premiums for our shareholders. So we're still very big believers in the high-grade material. And as we see other players around the world, lower their quality. It's again another testament and another great sort of differentiator that we have at Bloom Lake to have the type of ore that we have and also to have the significant resources that we have. I mean you saw recently deals being made $5 billion for ore in Australia. And when you look realistically at our company, people don't value any of the actual ores that we have apart from Bloom Lake, but we've got significant resources over and above that 5 billion tonnes that sit in one of the best jurisdictions in the world. So as the world starts needing more and more high grade, I do think we're going to be able to generate quite a lot of revenues and quite a lot of return for our loyal shareholders. So again, thanks a lot for your support and looking forward to speak to you in just 2 months for the fiscal year 2026 quarter one. Thanks, everyone.

This concludes today's conference call. Thank you very much for your participation. You may now disconnect.