Champion Iron Q3 2026 Champion Iron Ltd Earnings Call | AllMind AI Earnings | AllMind AI
Q3 2026 Champion Iron Ltd Earnings Call
Speaker #1: Good morning, ladies and
Speaker #1: gentlemen, and welcome to Champion's third-quarter results of the financial year 2026 conference call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session.
Speaker #1: If anyone has any difficulty hearing the conference, please press *0 for operator assistance at any time. I would now like to turn the conference call over to Michael Marcotte.
Speaker #1: Please go
Speaker #1: ahead.
Speaker #2: Thank you, Operator, and thank you,
Michael Marcotte: Thank you, operator, and thank you everyone for joining us here to discuss our third quarter results. Before we get going, I'd like to highlight we'll be using a presentation that's available on our website at championiron.com. Also, I'd like to highlight that throughout this call, we'll be making forward-looking statements. If you want to read more about forward-looking statements, risks, and assumptions, you can also visit our MD&A, which is also available on our website. Joining me here today includes many of our executives, including David Cataford, our CEO, who will be doing the formal portion of the presentation, and our COO, Alexandre Belleau. With that, I'll turn it over to David.
Michael Marcotte: Thank you, operator, and thank you everyone for joining us here to discuss our third quarter results. Before we get going, I'd like to highlight we'll be using a presentation that's available on our website at championiron.com. Also, I'd like to highlight that throughout this call, we'll be making forward-looking statements. If you want to read more about forward-looking statements, risks, and assumptions, you can also visit our MD&A, which is also available on our website. Joining me here today includes many of our executives, including David Cataford, our CEO, who will be doing the formal portion of the presentation, and our COO, Alexandre Belleau. With that, I'll turn it over to David.
Speaker #2: everyone, for joining us here to discuss our third-quarter results. Before we get going, I'd like to highlight we'll be using a presentation that's available on championiron.com.
Speaker #2: everyone, for joining us here to discuss our third-quarter results. Before we get going, I'd like to highlight we'll be using a presentation that's available on our website at I'd also like to highlight that throughout this call, we'll be making forward-looking statements.
Speaker #2: If you want to read more about forward-looking statements, risks, and assumptions, you can also visit our MD&A, which is also available on our website.
Speaker #2: Joining me here today includes many of our executives, including David Cataford, our CEO, who will be doing the formal portion of the presentation, and our COO, Alexandre Belleau.
Speaker #2: With that, I'll turn it over to David.
Speaker #3: Thanks, Michael. Thanks, everyone, for being on the call today. I'm very happy to be able to present the fiscal year 2026 third-quarter results. In terms of the highlights, we managed to produce roughly about $3.7 million during the quarter and sold just shy of $3.9 million also during the quarter.
David Cataford: Thanks, Michael. Thanks, everyone, for being on the call today. I'm very happy to be able to present the fiscal year 2026 Q3 results. In terms of the highlights, so we managed to produce roughly about 3.7 million tons during the quarter and sold just shy of 3.9 million tons also during the quarter. One of the big highlights as well is we've continued to improve on our Cash Costs. So our Cash Costs delivered in the vessel in Sept-Îles was just below $74 per ton, which translated in the quarter when you look at the realized price of an EBITDA of $150 million, a little bit less than the previous quarter, but the main difference was essentially the Provisional Price Adjustment.
David Cataford: Thanks, Michael. Thanks, everyone, for being on the call today. I'm very happy to be able to present the fiscal year 2026 Q3 results. In terms of the highlights, so we managed to produce roughly about 3.7 million tons during the quarter and sold just shy of 3.9 million tons also during the quarter. One of the big highlights as well is we've continued to improve on our Cash Costs. So our Cash Costs delivered in the vessel in Sept-Îles was just below $74 per ton, which translated in the quarter when you look at the realized price of an EBITDA of $150 million, a little bit less than the previous quarter, but the main difference was essentially the Provisional Price Adjustment.
Speaker #3: One of the big highlights as well is we've continued to improve on our cash costs. So our cash costs delivered in the vessel in Sutil was just below $74 per ton.
Speaker #3: Which translated in the quarter, when you look at the realized price of an EBITDA of $150 million, a little bit less than the previous quarter, but the main difference was essentially the provisional price adjustment.
Speaker #3: So we managed to have a pretty flat quarter on quarter. In terms of community governance and sustainability, continued working with local communities and also with the First Nations partners of Wasatch Montanum.
David Cataford: We managed to have a pretty flat quarter-over-quarter. In terms of community governance and sustainability, continued working with local communities and also with our First Nations partners of Uashat mak Mani-Utenam. One of the big highlights is we managed to send roughly about 160 people to the community to do a full immersion, to be able to work alongside with the community. Again, strengthening our partnership and allowing us to view potentials for growth in the future, alongside our partners in Uashat mak Mani-Utenam. In terms of operational results, one of the highlights for the quarter is definitely the amount of tons that we were able to bring down from the stockpiles at Bloom Lake.
We managed to have a pretty flat quarter-over-quarter. In terms of community governance and sustainability, continued working with local communities and also with our First Nations partners of Uashat mak Mani-Utenam. One of the big highlights is we managed to send roughly about 160 people to the community to do a full immersion, to be able to work alongside with the community. Again, strengthening our partnership and allowing us to view potentials for growth in the future, alongside our partners in Uashat mak Mani-Utenam. In terms of operational results, one of the highlights for the quarter is definitely the amount of tons that we were able to bring down from the stockpiles at Bloom Lake.
Speaker #3: One of the big highlights is we've managed to send roughly about $160 people to the community to do a full immersion to be able to work alongside with the community.
Speaker #3: Again, strengthening our partnership and allowing us to view potentials for growth in the future alongside our partners in Wasatch Montanum. In terms of operational results, one of the highlights for the quarter is definitely the amount of tons that we were able to bring down from the stockpiles at Bloom Lake.
Speaker #3: A lot of those tons are now sitting at the port, but we much prefer having them closer to the vessels at the port than on stockpiles at the Bloom Lake site.
David Cataford: A lot of those tons are now sitting at the port, but we much prefer having them closer to the vessels at the port than on stockpiles at the Bloom Lake site. So we managed to decrease our stockpile by about 1.1 million tons quarter-over-quarter, reducing the stockpile to about 600,000 tons at the mine. Our inventories increased at the port to roughly about 900,000 tons, and we'll be able to destock that over the next few quarters to be able to fill the vessels in this system. In terms of our operations, again, as we mentioned, quarterly concentrate production of about 3.7 million tons.
A lot of those tons are now sitting at the port, but we much prefer having them closer to the vessels at the port than on stockpiles at the Bloom Lake site. So we managed to decrease our stockpile by about 1.1 million tons quarter-over-quarter, reducing the stockpile to about 600,000 tons at the mine. Our inventories increased at the port to roughly about 900,000 tons, and we'll be able to destock that over the next few quarters to be able to fill the vessels in this system. In terms of our operations, again, as we mentioned, quarterly concentrate production of about 3.7 million tons.
Speaker #3: we managed to decrease our stockpile by about 1.1 million So tons. Quarter over quarter, reducing the stockpile to about 600,000 tons at the mine.
Speaker #3: Our inventories increased at the port to roughly about 900,000 tons, and we'll be able to destock that over the next few quarters. To be able to fill the vessels in the Sutil.
Speaker #3: In terms of our operations, again, as we mentioned, quarterly concentrate production of about 3.7 million tons. What's important to note as well is that we continue to operate in a way that keeps the mine very healthy.
David Cataford: What's important to note as well is that we continue to operate in a way that keeps the mine very healthy. So when you look at our strip ratio, the amount of tons of waste that we've moved during the quarter, again, making sure that ore is available, and that we can continue working on our blending strategy to make sure that we can dilute down a portion of the harder iron ore that we've had in one of the small zones that we discovered, that we disclosed to the market a few quarters ago.... In terms of the industry overview, so a pretty flat quarter when you look at the P65, the freight, and the premium for the P65 over the P62.
What's important to note as well is that we continue to operate in a way that keeps the mine very healthy. So when you look at our strip ratio, the amount of tons of waste that we've moved during the quarter, again, making sure that ore is available, and that we can continue working on our blending strategy to make sure that we can dilute down a portion of the harder iron ore that we've had in one of the small zones that we discovered, that we disclosed to the market a few quarters ago.... In terms of the industry overview, so a pretty flat quarter when you look at the P65, the freight, and the premium for the P65 over the P62.
Speaker #3: So when you look at our strip ratio, the amount of tons of waste that we've moved during the quarter, again, making sure that ore is available and that we can continue working on our blending strategy to make sure that we can dilute down a portion of the harder iron ore that we've had in one of the small zones that we discovered that we've disclosed to the market a few quarters ago.
Speaker #3: In terms of the industry overview, so pretty flat quarter when you look at the P65, the freight, and the premium. For the P65 over the P62, so during the quarter, P65 averaged about 118 dollars per ton, a slight increase of about 1%.
David Cataford: So during the quarter, P65 averaged about $118 per ton, a slight increase of about 1%. There was a very slight decrease in terms of the premium for the P65 over the P62, and a slight increase in C3 freight cost of about 2% during the quarter. But again, pretty flat in terms of quarter-over-quarter. What does that do on our provisional price adjustment? So when you look at this quarter, very uneventful provisional price adjustment, about $3.3 million over the quarter. When we account this over 3.9 million tons that were produced, it has an impact of about $0.80 per ton in terms of the tons sold.
So during the quarter, P65 averaged about $118 per ton, a slight increase of about 1%. There was a very slight decrease in terms of the premium for the P65 over the P62, and a slight increase in C3 freight cost of about 2% during the quarter. But again, pretty flat in terms of quarter-over-quarter. What does that do on our provisional price adjustment? So when you look at this quarter, very uneventful provisional price adjustment, about $3.3 million over the quarter. When we account this over 3.9 million tons that were produced, it has an impact of about $0.80 per ton in terms of the tons sold.
Speaker #3: There was a very slight decrease in terms of the premium for the P65 over the P62, and a slight increase in C3 freight costs of about 2% during the quarter.
Speaker #3: But again, pretty flat in terms of quarter on quarter. What does that do on our provisional price adjustment? So when you look at this quarter, very uneventful provisional price adjustment, about 3.3 million dollars US over the quarter.
Speaker #3: When we account this over 3.9 million tons that were produced, it has an impact of about 80 cents per ton in terms of the ton sold.
Speaker #3: When we look at the tons that are still on the water now at the end of the 31st of December, we had about 2.5 million tons in transit, and we've expected a price of around 117 US dollars per ton.
David Cataford: When we look at the tons that are still on the water now, at the end of 31 December, we had about 2.5 million tons in transit, and we've expected a price of around $117 per ton. If you look at our average realized selling price, pretty close to the P65 index. As you know, we have some tons that are still subject to slight discounts due to the fact that we're selling more on spot and not on long-term contracts. This is the year that we'll be able to start shifting that portion, because as we deliver our new plant and we're able to sell 69% iron ore, we'll now enter into longer term contracts.
When we look at the tons that are still on the water now, at the end of 31 December, we had about 2.5 million tons in transit, and we've expected a price of around $117 per ton. If you look at our average realized selling price, pretty close to the P65 index. As you know, we have some tons that are still subject to slight discounts due to the fact that we're selling more on spot and not on long-term contracts. This is the year that we'll be able to start shifting that portion, because as we deliver our new plant and we're able to sell 69% iron ore, we'll now enter into longer term contracts.
Speaker #3: If you look at our average realized selling price, pretty close to the P65 index, as you know, we have some tons that are still subject to slight discounts due to the fact that we're selling more on spot and not on long-term contracts.
Speaker #3: This is the year that we'll be able to start shifting that portion because as we deliver our new plant, and we're able to sell 69% iron ore, we'll now enter into longer-term contracts.
Speaker #3: But when you look at this quarter, when we account for the conversion of US to CAD and discount the freight cost, we had a net realized price of about 121 Canadian dollars per ton.
David Cataford: But when you look at this quarter, when we account for the conversion of US to CAD and discount the freight cost, we had a net realized price of about CAD 121 per ton. In terms of our cash costs, so we've continued working on our cost at site, reducing again our cash costs during the quarter to just below CAD 74 per ton delivered in the vessel. Pretty a big decrease, and we're continuing to work on our costs. So as you know, the main factors for us is definitely when we have a good iron ore recovery and we have good production, that definitely reduces the cost per ton at our site.
But when you look at this quarter, when we account for the conversion of US to CAD and discount the freight cost, we had a net realized price of about CAD 121 per ton. In terms of our cash costs, so we've continued working on our cost at site, reducing again our cash costs during the quarter to just below CAD 74 per ton delivered in the vessel. Pretty a big decrease, and we're continuing to work on our costs. So as you know, the main factors for us is definitely when we have a good iron ore recovery and we have good production, that definitely reduces the cost per ton at our site.
Speaker #3: In terms of our cash costs, so we've continued working on our cost at site, reducing, again, our cash costs during the quarter to just below 74 dollars per ton delivered in the vessel.
Speaker #3: Pretty big decrease, and we're continuing to work on our costs. So as you know, the main factors for us is definitely when we have a good iron ore recovery and we have good production, that definitely reduces the cost per ton at our site.
Speaker #3: Mind you, this quarter was a quarter that did not have a major shutdown, but still continuing our downward trend in terms of operating costs.
David Cataford: Mind you, this quarter was a quarter that did not have a major shutdown, but still, continuing our downward trend in terms of operating costs. What does that translate in terms of financial highlights? So, as we mentioned, revenues of about $470 million, EBITDA of $150 million, and a net income of $65 million for the quarter. In terms of our cash, so cash sits at roughly about $245 million on 31 December 2023. Main impacts were obviously the cash flows from operations, where we invested, we invested mostly on the sustaining CapEx and also the DRPF CapEx, and we also paid out our semiannual dividend during the quarter.
Mind you, this quarter was a quarter that did not have a major shutdown, but still, continuing our downward trend in terms of operating costs. What does that translate in terms of financial highlights? So, as we mentioned, revenues of about $470 million, EBITDA of $150 million, and a net income of $65 million for the quarter. In terms of our cash, so cash sits at roughly about $245 million on 31 December 2023. Main impacts were obviously the cash flows from operations, where we invested, we invested mostly on the sustaining CapEx and also the DRPF CapEx, and we also paid out our semiannual dividend during the quarter.
Speaker #3: What does that translate in terms of financial highlights? So as we mentioned, revenues of about 470 million dollars, EBITDA of 150, and a net income of 65 million dollars for the quarter.
Speaker #3: In terms of our cash, cash sits at roughly about $245 million as of December 31 this year. The main impacts were obviously the cash flows from operations.
Speaker #3: Where we invested, we invested mostly on the sustaining CapEx and also the DRPF CapEx. And we also paid out our semi-annual dividend during the quarter.
Speaker #3: There was also a change of working capital mainly due to receivables that have increased for that should unwind in the next quarter. In terms of our balance sheet, very well positioned to be able to continue our growth initiatives.
David Cataford: There was also a change of working capital, mainly due to receivables that have increased, so that should unwind in the next quarter. In terms of our balance sheet, very well positioned to be able to continue our growth initiatives. About $1.1 billion of cash, cash equivalents, and working capital, and also including the available liquidities that we have on our various facilities. So very well positioned to be able to finalize our growth initiatives. Talking about our growth initiatives, so if we look at our main project, the DRPF project, so we're coming close to completing the project now and being able to commission the first tons. Still on target to reach our $500 million investment for the full project.
There was also a change of working capital, mainly due to receivables that have increased, so that should unwind in the next quarter. In terms of our balance sheet, very well positioned to be able to continue our growth initiatives. About $1.1 billion of cash, cash equivalents, and working capital, and also including the available liquidities that we have on our various facilities. So very well positioned to be able to finalize our growth initiatives. Talking about our growth initiatives, so if we look at our main project, the DRPF project, so we're coming close to completing the project now and being able to commission the first tons. Still on target to reach our $500 million investment for the full project.
Speaker #3: About 1.1 billion dollars of cash, cash equivalents, and working capital and also including the available liquidities that we have. On our various facilities. So very well positioned to be able to finalize.
Speaker #3: Our growth initiatives. Talking about our growth initiatives, so if we look at our main project, the DRPF project, so we're coming close to completing the project now and being able to commission the first tons.
Speaker #3: Still on target to reach our $500 million investment for the full project. Right now, all the equipment's installed, so it's just finalizing some tie-ins with the equipment, and we're now also starting the commissioning of certain equipment as we speak.
David Cataford: Right now, all the equipment's installed, so it's just finalizing some tie-ins with the equipment, and we're now also starting the commissioning of certain equipments as we speak. So, pretty excited about the next steps for this project. We're still on target to be able to deliver our first tons of DRPF in our first vessel in the first half of this year. When we look at the impacts of starting the plant, we just need to remind everyone that there are some impacts that will come with the interactions with the phase two project. So there will be some interruptions in the plant as we commission the various equipment. We had forecasted in our feasibility study, roughly about 20 days for the phase two.
Right now, all the equipment's installed, so it's just finalizing some tie-ins with the equipment, and we're now also starting the commissioning of certain equipments as we speak. So, pretty excited about the next steps for this project. We're still on target to be able to deliver our first tons of DRPF in our first vessel in the first half of this year. When we look at the impacts of starting the plant, we just need to remind everyone that there are some impacts that will come with the interactions with the phase two project. So there will be some interruptions in the plant as we commission the various equipment. We had forecasted in our feasibility study, roughly about 20 days for the phase two.
Speaker #3: So pretty excited about the next steps for this project. We're still on target to be able to deliver our first tons of DRPF and our first vessel in the first half of this year.
Speaker #3: When we look at the impacts of starting the plant, we just need to remind everyone that there are some impacts that will come with the interactions with the phase two project.
Speaker #3: So there will be some interruptions in the plant as we commission the various equipment. We had forecasted in our feasibility study roughly about 20 days for the phase two.
Speaker #3: We'll try to make up a portion of that for in the phase one plants, but there will be some interactions in the coming quarter to be able to fully commission this plant.
David Cataford: We'll try to make up a portion of that for the Phase 1 plants, but there will be some interactions in the coming quarter to be able to fully commission this plant. But once that's done, we do expect a ramp-up of roughly about 12 months to be able to get the plant fully running and minimal impacts on the actual Phase 2 production, once the tie-ins are completed. So very exciting because we're now finalizing all of the potential contracts with various clients. We do expect to sell most of those tons in markets that we had announced, so either Europe, North Africa, or Middle East. So, working with our partners to be able to finalize those contracts, and we'll be ready for when these tons come into the market, in the first half of this year.
We'll try to make up a portion of that for the Phase 1 plants, but there will be some interactions in the coming quarter to be able to fully commission this plant. But once that's done, we do expect a ramp-up of roughly about 12 months to be able to get the plant fully running and minimal impacts on the actual Phase 2 production, once the tie-ins are completed. So very exciting because we're now finalizing all of the potential contracts with various clients. We do expect to sell most of those tons in markets that we had announced, so either Europe, North Africa, or Middle East. So, working with our partners to be able to finalize those contracts, and we'll be ready for when these tons come into the market, in the first half of this year.
Speaker #3: But once that's done, we do expect a ramp-up of roughly about 12 months to be able to get the plant fully running and minimal impacts on the actual phase two production one once the tie-ins are completed.
Speaker #3: So very exciting because we're now finalizing all of the potential contracts with various clients. We do expect to sell most of those tons in markets that we had announced, so either Europe, North Africa, or Middle East.
Speaker #3: So, working with our partners to be able to finalize those contracts, and we'll be ready for when these tons come into the market in the first half of this year.
Speaker #3: One of the other highlights that we discussed also just a few days before Christmas was the potential acquisition of Rana Gruber. So we entered into a transaction agreement with Rana Gruber to acquire the company.
David Cataford: One of the other highlights that we discussed also just a few days before Christmas was the potential acquisition of Rana Gruber. So, we entered into a transaction agreement with Rana Gruber to acquire the company. The transaction is fully financed, so a portion of cash, roughly about $39 million. We have La Caisse de dépôt, one of our long-standing partners, that is also supporting us for $100 million, and we also have fully underwritten term loan with Scotiabank of $150 million, that will start syndicating down to our bank syndicates. So, as my understanding, all of our partners are very very happy to support us with this transaction. Again, just to remind everyone why we're doing this, this transaction.
One of the other highlights that we discussed also just a few days before Christmas was the potential acquisition of Rana Gruber. So, we entered into a transaction agreement with Rana Gruber to acquire the company. The transaction is fully financed, so a portion of cash, roughly about $39 million. We have La Caisse de dépôt, one of our long-standing partners, that is also supporting us for $100 million, and we also have fully underwritten term loan with Scotiabank of $150 million, that will start syndicating down to our bank syndicates. So, as my understanding, all of our partners are very very happy to support us with this transaction. Again, just to remind everyone why we're doing this, this transaction.
Speaker #3: The transaction is fully financed, so a portion of cash, roughly about 39 million dollars US, we have La Caisse de Dépôt, one of our longstanding partners that is also supporting us for 100 million dollars US.
Speaker #3: And we also have a fully underwritten term loan with Scotiabank of $150 million US that we'll start syndicating down to our bank syndicates. So, as my understanding, all of our partners are very happy to support us with this transaction.
Speaker #3: Again, just to remind everyone why we're doing this transaction. Well, one, Rana Gruber is a robust operation that's operated for over 60 years uninterrupted.
David Cataford: Well, one, Rana Gruber is a robust operation that's operated for over 60 years, uninterrupted in all of the various cycles. They benefit from pretty interesting margins in terms of the material that they produce, and they're also on track to start producing higher grade material, which is fully aligning with what we do at Bloom Lake. They're also very well positioned versus European clients. This is a client base that we want to increase in the future, and they're just a few days of sailing time from their various clients, making it a producer of choice for a lot of steel mills in Europe.
Well, one, Rana Gruber is a robust operation that's operated for over 60 years, uninterrupted in all of the various cycles. They benefit from pretty interesting margins in terms of the material that they produce, and they're also on track to start producing higher grade material, which is fully aligning with what we do at Bloom Lake. They're also very well positioned versus European clients. This is a client base that we want to increase in the future, and they're just a few days of sailing time from their various clients, making it a producer of choice for a lot of steel mills in Europe.
Speaker #3: In all of the various cycles, they benefit from pretty interesting margins in terms of the material that they produce, and they're also on track to start producing higher-grade material which is fully aligning with what we do at Bloom Lake.
Speaker #3: They're also very well positioned versus European clients. This is a client base that we want to increase in the future. And they're just a few days of sailing time from their various clients making it a producer of choice for a lot of steel mills in Europe.
Speaker #3: We do think there are to be able to opportunities in the future with the asset potentially increase on the volume side, and we also benefit from an extraordinary team over there, fully aligned in terms of values and operation style.
David Cataford: We do think there are opportunities in the future with the asset to be able to potentially increase on the volume side, and we also benefit from an extraordinary team over there, fully aligned in terms of values and operation style. So we do think that this is very positive to be able to combine the two, the two assets. In terms of our other projects, so as you know, we're also working on the feasibility study and the permitting of the Kami project, so that's all going according to plan. We should be in a position by the end of this year to finalize the feasibility study and potentially obtain our construction permit for the project, and also fully aligned with our partners, Nippon Steel and Sojitz, to be able to continue on the next step.
We do think there are opportunities in the future with the asset to be able to potentially increase on the volume side, and we also benefit from an extraordinary team over there, fully aligned in terms of values and operation style. So we do think that this is very positive to be able to combine the two, the two assets. In terms of our other projects, so as you know, we're also working on the feasibility study and the permitting of the Kami project, so that's all going according to plan. We should be in a position by the end of this year to finalize the feasibility study and potentially obtain our construction permit for the project, and also fully aligned with our partners, Nippon Steel and Sojitz, to be able to continue on the next step.
Speaker #3: So we do think that this is very positive to be able to combine the two assets. In terms of our other projects, so as you know, we're also working on the feasibility study and the permitting of the CAMI project.
Speaker #3: So that's all going according to plan. We should be in a position by the end of this year to finalize the feasibility study and potentially obtain our construction permit for the project.
Speaker #3: And also fully aligned with our partners Nippon Steel and Sojitz to be able to continue on the next step. So, we'll see once we finalize the feasibility study and the permitting process, where the market for DR-grade type material is, and we'll then be able to look at the next steps for the project going forward.
David Cataford: So we'll see, once we finalize the feasibility study and the, and the permitting process, where's the market for DR grade type material, and, we'll then be, able to look at the next steps for the project going forward. We also, just to remind everyone, have over 5 billion tons of resources just south of Bloom Lake. So we are doing a little bit of drilling just to, make sure that we can refine our estimates in terms of the actual tons over there, but all very high-grade material, that is, I think will position us very well in the future. Short term, maybe, no impact, but in the medium long term could definitely be very beneficial for, our company. So with that being said, I'd like to thank, all of our staff and everyone for making these results possible.
So we'll see, once we finalize the feasibility study and the, and the permitting process, where's the market for DR grade type material, and, we'll then be, able to look at the next steps for the project going forward. We also, just to remind everyone, have over 5 billion tons of resources just south of Bloom Lake. So we are doing a little bit of drilling just to, make sure that we can refine our estimates in terms of the actual tons over there, but all very high-grade material, that is, I think will position us very well in the future. Short term, maybe, no impact, but in the medium long term could definitely be very beneficial for, our company. So with that being said, I'd like to thank, all of our staff and everyone for making these results possible.
Speaker #3: We also just a remind everyone have over 5 billion tons of resources just south of Bloom Lake. So we are doing a little bit of drilling just to make sure that we can refine our estimates in terms of the actual tons over there.
Speaker #3: very high-grade material But all that is. I think we'll position us very well in the future. Short term maybe no impact, but in the medium long term could definitely be very beneficial for our company.
Speaker #3: So, with that being said, I'd like to thank all of our staff and everyone for making these results possible. I think, again, a very good quarter.
David Cataford: I think, again, a very good quarter. We had a few hiccups last year, and definitely had some quarters that were impacted by either forest fires or a bit of breakage on certain equipment at our site. But I think that's behind us, and we're now back in a very good operational position. And I think when you look at the results and the Cash Costs that are continuing to come down, it's a proven element that we're back on track in terms of operations. So with that being said, I'll turn it over for the Q&A portion of the call.
I think, again, a very good quarter. We had a few hiccups last year, and definitely had some quarters that were impacted by either forest fires or a bit of breakage on certain equipment at our site. But I think that's behind us, and we're now back in a very good operational position. And I think when you look at the results and the Cash Costs that are continuing to come down, it's a proven element that we're back on track in terms of operations. So with that being said, I'll turn it over for the Q&A portion of the call.
Speaker #3: We had a few hiccups last year, and definitely had some quarters that were impacted by either forest fires or a bit of breakage on certain equipment at our site.
Speaker #3: But I think that's behind us, and we're now back in a very good operational position. And I think when you look at the results and the cash costs, it's a proven element that are continuing to come down. We're back on track in terms of operations.
Speaker #3: So with that being said, I'll turn it over for the Q&A portion of the
Speaker #3: call. Thank
Operator: Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press the star followed by the one on a touch-tone phone. Should you wish to cancel your request, please press the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. Once again, that is star one, should you wish to ask a question. Your first question is from Julio Mondragon from BMO Capital Markets. Your line is now open.
Operator: Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press the star followed by the one on a touch-tone phone. Should you wish to cancel your request, please press the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. Once again, that is star one, should you wish to ask a question. Your first question is from Julio Mondragon from BMO Capital Markets. Your line is now open.
Speaker #2: you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star, followed by the one on your touchstone phone.
Speaker #2: Should you wish to cancel your request, please press the star, followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys.
Speaker #2: Once again, that is star one. Should you wish to ask a question, your first question is from Jodiel Mondrigan from BMO Capital Markets, your line is now open.
Speaker #3: Hi, hello everyone. So I just got a couple of questions, but the first one I would like to ask is, while you have seen the cost reducing significantly quarter on quarter, what are the key drivers of this cost reduction?
Julio Mondragon: Hi. Hello, everyone. So I just got a couple of questions, but the first one, I would like to ask is, while you have seen the cost reducing significantly quarter-over-quarter, what are the key drivers of this cost reduction? And also, how sustainable this is in the near term, you know, like, what would be your unit cost target for the next few quarters? To understand a little bit more about your cost strategy here.
Julio Mondragon: Hi. Hello, everyone. So I just got a couple of questions, but the first one, I would like to ask is, while you have seen the cost reducing significantly quarter-over-quarter, what are the key drivers of this cost reduction? And also, how sustainable this is in the near term, you know, like, what would be your unit cost target for the next few quarters? To understand a little bit more about your cost strategy here.
Speaker #3: And also, how sustainable is this in the near term? What would be your unit cost target for the next few quarters to understand a little bit more about your cost strategy
Speaker #3: here? Well, the cost strategy is
David Cataford: Well, the cost strategy is always to produce at the lowest cost possible. When you look at the results, well, obviously, this was a quarter that didn't have a major shutdown. So quarter-over-quarter, that was one of the impacts in terms of the cost reduction. When you look at the amount of tons that were produced, definitely when we produce more tons, well, we'll always have a lower cost per ton. So that's definitely one of the elements that has improved. And as we've, we come out of this whole stockpile history portion, well, that's definitely going to reduce our costs as well, going, and going forward. So those are the main elements, but our strategy is definitely to continue working on various elements that we can improve our costs. How do we do that?
David Cataford: Well, the cost strategy is always to produce at the lowest cost possible. When you look at the results, well, obviously, this was a quarter that didn't have a major shutdown. So quarter-over-quarter, that was one of the impacts in terms of the cost reduction. When you look at the amount of tons that were produced, definitely when we produce more tons, well, we'll always have a lower cost per ton. So that's definitely one of the elements that has improved. And as we've, we come out of this whole stockpile history portion, well, that's definitely going to reduce our costs as well, going, and going forward. So those are the main elements, but our strategy is definitely to continue working on various elements that we can improve our costs. How do we do that?
Speaker #4: always to produce at the lowest cost possible. When you look at the results, well, obviously this was a quarter that didn't have a major shutdown.
Speaker #4: So quarter on quarter, that was one of the impacts in terms of the cost reduction. When you look at the amount of tons that were produced, definitely when we produce more tons, well, we'll always have a lower cost per ton.
Speaker #4: So that's definitely one of the elements that has improved. And as we come out of this whole stockpile history portion, well, that's definitely going to reduce our costs as well going forward.
Speaker #4: So those are the main elements, but our strategy is definitely to continue working on various elements that we can improve our costs. How do we do that?
Speaker #4: Well, we're improving the mining efficiency, also working on our shutdowns to be able to be more efficient. If we can get that plant up and running a little bit more often, well, that's going to allow us to produce more tons and it's going to dilute down a lot of our fixed costs.
David Cataford: Well, we're improving the mining efficiency, also working on our shutdowns to be able to be more efficient. If we can get that plant up and running a little bit more often, well, that's going to allow us to produce more tons, and it's going to dilute down a lot of our fixed costs. So those are definitely the strategies that we have shorter term to be able to continue on the trend to have good operating costs.
Well, we're improving the mining efficiency, also working on our shutdowns to be able to be more efficient. If we can get that plant up and running a little bit more often, well, that's going to allow us to produce more tons, and it's going to dilute down a lot of our fixed costs. So those are definitely the strategies that we have shorter term to be able to continue on the trend to have good operating costs.
Speaker #4: So those are definitely the strategies that we have, shorter term, to be able to continue on the trend to have good operating.
Speaker #4: costs. Thank you
Julio Mondragon: Thank you very much. If I could, I could ask one more question. So currently you are targeting commercial production in the first half of this year, from the DRPF plan. So does, does it mean you are going to achieve, Nameplate Capacity in this period? And also, because we're talking about premiums, can you provide a quick, a quick outlook of your, of the market and the premiums for this product?
Julio Mondragon: Thank you very much. If I could, I could ask one more question. So currently you are targeting commercial production in the first half of this year, from the DRPF plan. So does, does it mean you are going to achieve, Nameplate Capacity in this period? And also, because we're talking about premiums, can you provide a quick, a quick outlook of your, of the market and the premiums for this product? Thank you.
Speaker #3: very much. And if I could ask one more question, so currently you are targeting commercial production in the first half of this year. From the DRPF plan, so does it mean you are going to achieve the employee capacity in this period?
Speaker #3: And also because we're talking about premiums, can you provide a quick outlook of the market and the premiums for this
Speaker #3: product? Thank you.
Operator: ... Thank you.
Speaker #4: Yeah. Thanks for the
David Cataford: Yeah, thanks for the question. So once we get the plant up and running, we believe the ramp-up time is gonna be roughly about 12 months to get the full nameplate capacity. So that's the timeframe to be able to get the full nameplate capacity. If we can do it quicker, well, we'll definitely come back to the market, but that's what is in our plan right now. In terms of premiums, well, obviously, when you have a new product like ours, the 69%, we need to be able to prove to our various clients that we can hit that number and that it reacts well in their plants. So there's always some trial discounts to the DR Grade premiums when you look at the first cargoes.
David Cataford: Yeah, thanks for the question. So once we get the plant up and running, we believe the ramp-up time is gonna be roughly about 12 months to get the full nameplate capacity. So that's the timeframe to be able to get the full nameplate capacity. If we can do it quicker, well, we'll definitely come back to the market, but that's what is in our plan right now. In terms of premiums, well, obviously, when you have a new product like ours, the 69%, we need to be able to prove to our various clients that we can hit that number and that it reacts well in their plants. So there's always some trial discounts to the DR Grade premiums when you look at the first cargoes.
Speaker #4: question. So once we get the plant up and running, we believe the ramp-up time is going to be roughly about 12 months to get the full nameplate capacity.
Speaker #4: So that's the timeframe to be able to get the full nameplate capacity. If we can do it quicker, well, we'll definitely come back to the market, but that's what is in our plan right now.
Speaker #4: In terms of premiums, well, obviously when you have a new product, like ours, a 69%, we need to be able to prove to our various clients that we can hit that number and that it reacts well in their plants.
Speaker #4: So there's always some trial discounts to the DR-grade premiums when you look at the first cargoes. But I think once we are able to demonstrate to our clients that we're hitting consistently the quality, well, then we'll be able to get out of that territory and start benefiting fully from the DR premiums.
David Cataford: But I think, once we are able to demonstrate to our clients that we're hitting consistently the quality, well, then we'll be able to get out of that that territory and start benefiting fully from the CR premiums. In the market today, the DR premiums have increased slightly compared to last year, so I do think we're in the right the right trend. But for us, you have to remember that, one, there's the premium that is that is interesting, but there's also the freight advantages by selling closer to home. So when you combine those, I do think we're gonna have better margins for our material, hence better returns for our shareholders.
But I think, once we are able to demonstrate to our clients that we're hitting consistently the quality, well, then we'll be able to get out of that that territory and start benefiting fully from the CR premiums. In the market today, the DR premiums have increased slightly compared to last year, so I do think we're in the right the right trend. But for us, you have to remember that, one, there's the premium that is that is interesting, but there's also the freight advantages by selling closer to home. So when you combine those, I do think we're gonna have better margins for our material, hence better returns for our shareholders.
Speaker #4: In the market today, the DR premiums have increased slightly compared to last year. So, I do think we're in the right trend. But for us, you have to remember that, one, there's the premium that is interesting, but there's also the freight advantages by selling closer to home.
Speaker #4: So when you combine those, I do think we're going to have a better margins for our material, hence better returns for our
Speaker #4: shareholders. Thank you very much.
Operator: Thank you very much, and have a good day.
Julio Mondragon: Thank you very much, and have a good day.
Speaker #3: And have a good day.
Speaker #2: Thank you. Your next question is from Oris Alcudel from Scotiabank Airlines. Is that
Operator: Thank you. Your next question is from Orest Wowkodaw from Scotiabank. Your line is now open.
Operator: Thank you. Your next question is from Orest Wowkodaw from Scotiabank. Your line is now open.
Speaker #2: open? Hi, good morning.
Orest Wowkodaw: Hi, good morning. Two things from my end. First of all, on the ship loader issue at the Port of Sept-Îles, how is that rectified, or how long was that down? I'm just wondering when normal shipments would have resumed post your end.
Orest Wowkodaw: Hi, good morning. Two things from my end. First of all, on the ship loader issue at the Port of Sept-Îles, how is that rectified, or how long was that down? I'm just wondering when normal shipments would have resumed post your end.
Speaker #5: Two things from my end. First of all, on the shiploader issue at the port of Saint Hild, how is that rectified or how long was that down?
Speaker #5: I'm just wondering when normal shipments would have resumed post your end.
Speaker #4: Yeah. Thanks for the question. That was roughly about four or five days. So it wasn't a, well, I mean, we consider it major, but when you look in the yearly results, it's not necessarily major.
David Cataford: Yeah, thanks for the question. That was roughly about four or five days, so it wasn't a-- Well, I mean, we consider it major, but when you look in the yearly results, it's not necessarily major. Just annoying for us because we would have sold probably an extra vessel during the quarter, which would have been nice. But realistically, the operations restarted about five days after the breakage. I don't think it's something that is necessarily recurrent, just an issue that happened, but unfortunately, happened right at the end of the quarter.
David Cataford: Yeah, thanks for the question. That was roughly about four or five days, so it wasn't a-- Well, I mean, we consider it major, but when you look in the yearly results, it's not necessarily major. Just annoying for us because we would have sold probably an extra vessel during the quarter, which would have been nice. But realistically, the operations restarted about five days after the breakage. I don't think it's something that is necessarily recurrent, just an issue that happened, but unfortunately, happened right at the end of the quarter.
Speaker #4: Just annoying for us because we would have sold probably an extra vessel during the quarter, which would have been nice. But realistically, the operations restarted about five days after the breakage.
Speaker #4: I don't think it's something that is necessarily recurrent, just an issue that happened. But unfortunately, it happened right at the end of the quarter.
Speaker #5: Okay. So should we expect that the 900,000 tons of inventory at the port to basically be cleared out here in the
Orest Wowkodaw: Okay, so should we expect that the 900,000 tons of inventory at the port to basically be cleared out here in the current quarter?
Orest Wowkodaw: Okay, so should we expect that the 900,000 tons of inventory at the port to basically be cleared out here in the current quarter?
Speaker #5: current quarter?
Speaker #4: Well,
Speaker #4: There's always going to be inventory at the port because, as you know, vessels are roughly about 200,000 tons. So it's tough for us to clean out the inventory completely.
David Cataford: Well, there's always gonna be inventory at the port, because, as you know, vessels are roughly about 200,000 tons, so it's tough for us to clean out the inventory completely. So, I'd say probably closer to two quarters to be able to get down to a level that is more in the range of having one vessel on the ground. So that's realistically about the timeframe that we believe we can get those tons down.
David Cataford: Well, there's always gonna be inventory at the port, because, as you know, vessels are roughly about 200,000 tons, so it's tough for us to clean out the inventory completely. So, I'd say probably closer to two quarters to be able to get down to a level that is more in the range of having one vessel on the ground. So that's realistically about the timeframe that we believe we can get those tons down.
Speaker #4: So I'd say probably closer to two quarters to be able to get down to a level that is more in the range of having one vessel on the ground.
Speaker #4: So that's realistically about the timeframe that we believe to we can get those tons down.
Speaker #5: Okay. And then just changing gears back to the DPRF, I realize you're not expecting commercial sales, I guess, till sometime in the second calendar quarter, but should we as we're waiting for better visibility on what premiums may look like, should we start to anticipate that we're going to see some increase in your blended realized price starting as early as Q2 and that ramps over future periods?
Orest Wowkodaw: Okay. And then just changing gears back to the DRPF. Should I realize you're not expecting commercial sales, I guess, till sometime in the second calendar quarter. But should we? Like, as we're waiting for better visibility on what premiums may look like, should we start to anticipate that, like, we're gonna see some increase in your blended realized price starting as early as Q2, and that ramps over future periods? Or should we just not, or is that not realistic?
Orest Wowkodaw: Okay. And then just changing gears back to the DRPF. Should I realize you're not expecting commercial sales, I guess, till sometime in the second calendar quarter. But should we? Like, as we're waiting for better visibility on what premiums may look like, should we start to anticipate that, like, we're gonna see some increase in your blended realized price starting as early as Q2, and that ramps over future periods? Or should we just not, or is that not realistic?
Speaker #5: Or should we just notice or is that not
Speaker #5: Realistic? I think it's probably closer to Q3.
David Cataford: I think it's probably closer to Q3, well, where you're gonna start seeing some results. Q2, definitely we're gonna have our first tons that are produced, first tons that are sold. But that, depending on how the actual integration goes, and we're able to start up the plant, when we look at the interruptions that we'll have to be able to tie in the actual plants together, I think in Q2, that's not where, when we're gonna start seeing the results, it's more in Q3.
David Cataford: I think it's probably closer to Q3, well, where you're gonna start seeing some results. Q2, definitely we're gonna have our first tons that are produced, first tons that are sold. But that, depending on how the actual integration goes, and we're able to start up the plant, when we look at the interruptions that we'll have to be able to tie in the actual plants together, I think in Q2, that's not where, when we're gonna start seeing the results, it's more in Q3.
Speaker #4: Well, where you're going to start seeing some results, Q2 definitely we're going to have our first tons that are produced. First tons that are sold.
Speaker #4: But depending on how the actual integration goes, and we're able to start up the plant when we look at the interruptions that we'll have to be able to tie in the actual plants together, I think in Q2 that's not when we're going to start seeing the results.
Speaker #4: It's more in Q3.
Speaker #5: Okay. And when you mentioned earlier also the 20 days of tie-in, is that this current calendar quarter? Is that when that's expected?
Orest Wowkodaw: Okay. When you mentioned earlier also the 20 days of tie-in, is that this current calendar quarter? Is that when that's expected?
Orest Wowkodaw: Okay. When you mentioned earlier also the 20 days of tie-in, is that this current calendar quarter? Is that when that's expected?
Speaker #4: It's Q1 of fiscal year 2027. So sorry, I think I said on the call this quarter, but in my mind, we're already in
David Cataford: It's Q1 of fiscal year 2027.
David Cataford: It's Q1 of fiscal year 2027.
Orest Wowkodaw: Okay, thanks a lot.
Orest Wowkodaw: Okay, thanks a lot.
David Cataford: So sorry, I think I said on the call this quarter, but in my mind, we're already in April, so.
David Cataford: So sorry, I think I said on the call this quarter, but in my mind, we're already in April, so.
Speaker #4: April, so. Okay.
Orest Wowkodaw: Okay, so we're talking calendar Q2?
Orest Wowkodaw: Okay, so we're talking calendar Q2?
Speaker #5: So, okay. So we're talking calendar Q2. Okay, thank you.
Speaker #4: Correct.
David Cataford: Correct.
David Cataford: Correct.
Orest Wowkodaw: Okay, thank you.
Orest Wowkodaw: Okay, thank you.
Speaker #5: you.
Speaker #2: Thank you. Once again, please press star one. Should you wish to ask a question? And your next question is from Fedor Shabalin from B Riley Securities Airlines.
Operator: Thank you. Once again, please press star one should you wish to ask a question. Your next question is from Fedor Shabalin from B. Riley Securities. Your line is now open.
Operator: Thank you. Once again, please press star one should you wish to ask a question. Your next question is from Fedor Shabalin from B. Riley Securities. Your line is now open.
Speaker #2: Is
Speaker #2: that open? Thank you very
Fedor Shabalin: Thank you very much, operator, and good morning, everyone. David, so several quarters ago, you mentioned that, Bloom Lake output could reach, between 17 and 18 million tons annually once all bottlenecks are resolved. The progress of the, the bottleneck in the fourth is clearly visible, and my question is: where are we now on the path to achieving this 17, 18 million ton production target at Bloom Lake? And I would assume we're not far away. And what additional steps remain to get there? Thank you.
Fedor Shabalin: Thank you very much, operator, and good morning, everyone. David, so several quarters ago, you mentioned that, Bloom Lake output could reach, between 17 and 18 million tons annually once all bottlenecks are resolved. The progress of the, the bottleneck in the fourth is clearly visible, and my question is: where are we now on the path to achieving this 17, 18 million ton production target at Bloom Lake? And I would assume we're not far away. And what additional steps remain to get there? Thank you.
Speaker #3: much, Operator, and good morning, everyone. David, so several quarters ago, you mentioned that Bloom Lake output could reach between 17 and 18 million tons annually once all bottlenecks are resolved.
Speaker #3: The progress of the bottleneck in the force is clearly visible. And my question is, where are we now on the path to achieving these 17, 18 million ton production target at Bloom Lake?
Speaker #3: And I would assume we're not far away. And what additional steps remain to get there? Thank
Speaker #3: you.
Speaker #4: Yeah. Thanks for the question. When we go
David Cataford: Yeah, thanks for the question. When we go back, the main target for us was definitely to make sure that if we do some investments, well, we'll be able to get those tons down. So the main focus was really to be able to work on the rail portion to make sure we can get the tons. When we look at the last quarter, we brought down quite a lot of tons from site, so that definitely gave us some good visibility. Now, we're in a situation where we're back in the very, very cold winter months. It's actually a very cold winter up to now, so there are some elements that impact the rail portion.
David Cataford: Yeah, thanks for the question. When we go back, the main target for us was definitely to make sure that if we do some investments, well, we'll be able to get those tons down. So the main focus was really to be able to work on the rail portion to make sure we can get the tons. When we look at the last quarter, we brought down quite a lot of tons from site, so that definitely gave us some good visibility. Now, we're in a situation where we're back in the very, very cold winter months. It's actually a very cold winter up to now, so there are some elements that impact the rail portion.
Speaker #4: back, the main target for us was definitely to make sure that if we do some investments where we'll be able to get those tons down.
Speaker #4: So the main focus was really to be able to work on the rail portion to make sure we can get the tons. When we look at the last quarter, we brought down quite a lot of tons from site.
Speaker #4: So that definitely gave us some good visibility. Now we're in a situation where we're back in the very, very cold winter months. It's actually a very cold winter up to now.
Speaker #4: So there are some elements that impact the rail portion. But when we take all that into account, I do think we're in a territory where we feel more confident that the logistics side will be able to bring down the tons.
David Cataford: But when we take all that into, into account, I do think we're in a territory where we feel more confident that the logistics side will be able to bring down the tons. So now, most of the work to be able to define what needs to be done, to be able to increase the production is pretty well known. So, we're gonna start working on those projects to be able to look at the, the debottlenecking. But that, that was also one of the, the thought processes when we looked at acquiring a project like Rana Gruber. So initially, we thought those tons would come from Bloom Lake.
But when we take all that into, into account, I do think we're in a territory where we feel more confident that the logistics side will be able to bring down the tons. So now, most of the work to be able to define what needs to be done, to be able to increase the production is pretty well known. So, we're gonna start working on those projects to be able to look at the, the debottlenecking. But that, that was also one of the, the thought processes when we looked at acquiring a project like Rana Gruber. So initially, we thought those tons would come from Bloom Lake.
Speaker #4: So now most of the work to be able to define what needs to be done to be able to increase the production is pretty well known.
Speaker #4: So we're going to start working on those projects to be able to look at the debottlenecking. But that was also one of the thought processes when we looked at acquiring the project like Rana Gruber.
Speaker #4: So initially, we thought those tons would come from Bloom Lake. I still think that Bloom Lake will get to the 17, 18 million tons, but in the interim, we will now have an asset that produces just shy of 2 million tons out of Norway.
David Cataford: I still think that Bloom Lake will get to the 17-18 million tons, but in the interim, we will now have an asset that produces just shy of 2 million tons out of Norway, and that's definitely gonna help as well in terms of the production increase.
I still think that Bloom Lake will get to the 17-18 million tons, but in the interim, we will now have an asset that produces just shy of 2 million tons out of Norway, and that's definitely gonna help as well in terms of the production increase.
Speaker #4: And that's definitely going to help as well in terms of the production
Speaker #4: increase. Yeah.
Fedor Shabalin: ... Yeah, thank you very much. That's helpful. And my follow-up question is on DR grade market overall. What, what does the current landscape look like, and how large is demand now? And do you anticipate any changes to premium above 65% Fe, P65, that, that you outlined previously? And if I recall correctly, it was roughly in the zip code of $20 per metric ton. And are there plans to sell a portion of DR pellet feed output to third parties? Thank you.
Fedor Shabalin: Yeah, thank you very much. That's helpful. And my follow-up question is on DR grade market overall. What, what does the current landscape look like, and how large is demand now? And do you anticipate any changes to premium above 65% Fe, P65, that, that you outlined previously? And if I recall correctly, it was roughly in the zip code of $20 per metric ton. And are there plans to sell a portion of DR pellet feed output to third parties? Thank you.
Speaker #3: Thank you very much. That's helpful. And my follow-up question is on the DR-grade market overall. What does the current landscape look like? And how large is demand now?
Speaker #3: And do you anticipate any changes to premium above 65% fair P65 with your outlined previously? And if I recall correctly, it was roughly in the zip code of 20 dollars per metric ton.
Speaker #3: And are there plans to sell a portion of DR pellet feed output to third parties? Thank
Speaker #3: you. Yeah.
David Cataford: Yeah, thanks for the question. So the thought process is not to sell those tons to third parties, so we want to sell directly to the steel mills that require this type of material. Again, when we look for potential clients, we want to make sure that they have the right ports so that they can take capesize vessels, so that we can fully benefit from the closer to home tons. If there's some advantages by going with the smaller Panamax, but there's still some freight advantage for us, it's definitely something that we can look at. But when we combine the freight advantage and also the premiums for the DR, once we get out of the trial cargoes, I do think that the market is looking pretty good to be able to get a significant premium on our side.
David Cataford: Yeah, thanks for the question. So the thought process is not to sell those tons to third parties, so we want to sell directly to the steel mills that require this type of material. Again, when we look for potential clients, we want to make sure that they have the right ports so that they can take capesize vessels, so that we can fully benefit from the closer to home tons. If there's some advantages by going with the smaller Panamax, but there's still some freight advantage for us, it's definitely something that we can look at. But when we combine the freight advantage and also the premiums for the DR, once we get out of the trial cargoes, I do think that the market is looking pretty good to be able to get a significant premium on our side.
Speaker #4: Thanks for the question. So the thought process is not to sell those tons to third parties. So we want to sell directly to the steel mills that require this type of material.
Speaker #4: Again, when we look for potential clients, we want to make sure that they have the right ports so that they can take cape-sized vessels so that we can fully benefit from the closer-to-home tons.
Speaker #4: If there's some advantages by going with smaller Panamax, but there's still some advantage for us, it's definitely something that we can look at. But when we combine the freight advantage and also the premiums for the DR, once we get out of the trial cargoes, I do think that the market is looking pretty good to be able to get a significant premium on our side.
Speaker #4: When you look at this year, well, the DR-grade seems to be in a better position than it was last year. But again, there's quite a lot of noise with projects like Simandou coming on.
David Cataford: When you look at this year, well, the DR Grade seems to be in a better position than it was last year. But again, there's quite a lot of noise with projects like Simandou coming on, so it doesn't impact the DR Grade, but it did impact the view on the high-grade material. Not necessarily ramping up to the level that was initially expected, so I think that's keeping the health, the high-grade portion quite healthy. But we will see in the next quarters where that DR premium goes. But when we look at the fundamentals, there's quite a lot of plants getting delivered that need this type of material.
When you look at this year, well, the DR Grade seems to be in a better position than it was last year. But again, there's quite a lot of noise with projects like Simandou coming on, so it doesn't impact the DR Grade, but it did impact the view on the high-grade material. Not necessarily ramping up to the level that was initially expected, so I think that's keeping the health, the high-grade portion quite healthy. But we will see in the next quarters where that DR premium goes. But when we look at the fundamentals, there's quite a lot of plants getting delivered that need this type of material.
Speaker #4: So it doesn't impact the DR-grade, but it did impact the view on the high-grade material. Not necessarily ramping up to the level that was initially expected.
Speaker #4: So I think that's keeping the high-grade portion quite healthy. But we will see in the next quarters where that DR premium goes. But when we look at the fundamentals, there's quite a lot of plants getting delivered that need this type of material.
Speaker #4: There's some plants that have tried to also find ways to upgrade material that might not deliver the results that they thought. So that will definitely be some potential clients for us down the road.
David Cataford: There's some plants that have tried to also find ways to upgrade material that might not deliver the results that they thought, so that will definitely be some potential clients for us down the road. But when I look at the environment closer to the whole Sept-Îles port, I do think that we'll have the right clients to sell our material at the right premiums.
There's some plants that have tried to also find ways to upgrade material that might not deliver the results that they thought, so that will definitely be some potential clients for us down the road. But when I look at the environment closer to the whole Sept-Îles port, I do think that we'll have the right clients to sell our material at the right premiums.
Speaker #4: But when I look at the environment closer to the whole SETIL port, I do think that we'll have the right clients to sell our material at the right
Speaker #4: premiums. That's super helpful.
Fedor Shabalin: That's super helpful. Thank you very much, gentlemen, and continue. Best of luck.
Fedor Shabalin: That's super helpful. Thank you very much, gentlemen, and continue. Best of luck.
Speaker #3: Thank you very much, gentlemen, and continue best of luck.
Speaker #3: luck. Thank you.
Operator: Thank you. Your next question is from Dalton Baretto from Canaccord Genuity. Your line is now open.
Operator: Thank you. Your next question is from Dalton Baretto from Canaccord Genuity. Your line is now open.
Speaker #2: Your next question is from Dalton Barretto from Canaccord Genuity. Your line is now
Speaker #2: open. Thank you, Operator.
Dalton Baretto: Thank you, operator. Good morning, guys. David, I wanted to start by asking... Well, I've got two questions on Rana Gruber. I'll start with the first one. When you look at their client base, in particular, in Europe, do you see any synergies there with you trying to place the DRPF material? Does that help you in any way?
Dalton Baretto: Thank you, operator. Good morning, guys. David, I wanted to start by asking... Well, I've got two questions on Rana Gruber. I'll start with the first one. When you look at their client base, in particular, in Europe, do you see any synergies there with you trying to place the DRPF material? Does that help you in any way?
Speaker #5: Good morning, guys. David, I wanted to start by asking, well, I've got two questions on Rana Gruber. I'll start with the first one. When you look at their client base, particularly in Europe, do you see any synergies there with you trying to place the DRPF material?
Speaker #5: Does that help you in any way?
Speaker #4: Hey, thanks for the question. So definitely some advantages just in the fact that also they're so close to their clients. So when we sell to Europe, we're close, but we're not that close.
David Cataford: Hey, thanks for the question. So definitely some advantages, just in the fact that also they're so close to their clients. So when we sell to Europe, we're close, but we're not that close. They're about 3 days sailing time. I think there's some good potential combinations, on that front. When I look at potential blending strategies, that's definitely something that's top of our mind as well. So is it possible to have some potentials in that front, to be able to get a better premium for material? That is something that we will look at. I think the main focus now is definitely closing the transaction, making sure that the asset is under our control in the next few months. And then, I definitely see some potential advantages and synergies with clients in Europe.
David Cataford: Hey, thanks for the question. So definitely some advantages, just in the fact that also they're so close to their clients. So when we sell to Europe, we're close, but we're not that close. They're about 3 days sailing time. I think there's some good potential combinations, on that front. When I look at potential blending strategies, that's definitely something that's top of our mind as well. So is it possible to have some potentials in that front, to be able to get a better premium for material? That is something that we will look at. I think the main focus now is definitely closing the transaction, making sure that the asset is under our control in the next few months. And then, I definitely see some potential advantages and synergies with clients in Europe.
Speaker #4: They're about three days sailing time. I think there's some good potential combinations on that front. When I look at potential blending strategies, that's definitely something that's top of our mind as well.
Speaker #4: So is it possible to have some potentials in that front to be able to get a better premium for material? That is something that we will look at.
Speaker #4: I think the main focus now is definitely closing the transaction making sure that the asset is under our control in the next few months.
Speaker #4: And then I definitely see some potential advantages and synergies with clients in
Speaker #4: Europe. That's great.
Dalton Baretto: That's great. And then similar sort of question, but on the operations side, I was looking at their capital market state presentation from last year, and it looks like they're about to set off on the same trajectory that you guys just went through in terms of upgrading their material to DRPF. Given what you guys have just been through, do you think that you can accelerate that timeline at all?
Dalton Baretto: That's great. And then similar sort of question, but on the operations side, I was looking at their capital market state presentation from last year, and it looks like they're about to set off on the same trajectory that you guys just went through in terms of upgrading their material to DRPF. Given what you guys have just been through, do you think that you can accelerate that timeline at all?
Speaker #3: And then similar sort of question, but on the operations side, I was looking at their capital markets day presentation from last year. And it looks like they're about to set off on the same trajectory that you guys just went through in terms of upgrading their material to DRPF.
Speaker #3: Given what you guys have just been through, do you think that you can accelerate that timeline at all?
Speaker #4: Yeah, there's various ways to look at it. If you remember, even at Bloom Lake initially, we thought, do we want to build one or two flotation plants and get all of our tons to 69%?
David Cataford: There's various ways to look at it. If you remember, even at Bloom Lake, initially we thought, "Do we want to build 1 or 2 flotation plants and get all of our tons to 69%?" But we thought, "Maybe it makes more sense to do 1, and maybe there'll be a blending strategy directly at Bloom Lake." So if we transpose that to Rana Gruber, is it the upgrade that is necessary? Because now we're only looking at 2 million tons. Or is it possible to take, let's say, 1 million of those tons, blend it with some 69% material, and it becomes DR Grade. So there's, again, a lot of potential synergies between the two sites.
David Cataford: There's various ways to look at it. If you remember, even at Bloom Lake, initially we thought, "Do we want to build 1 or 2 flotation plants and get all of our tons to 69%?" But we thought, "Maybe it makes more sense to do 1, and maybe there'll be a blending strategy directly at Bloom Lake." So if we transpose that to Rana Gruber, is it the upgrade that is necessary? Because now we're only looking at 2 million tons. Or is it possible to take, let's say, 1 million of those tons, blend it with some 69% material, and it becomes DR Grade. So there's, again, a lot of potential synergies between the two sites.
Speaker #4: But we thought, maybe it makes more sense to do one. And maybe there'll be a blending strategy directly at Bloom Lake. So if we transpose that to a Rana Gruber, is it the upgrade that is necessary?
Speaker #4: Because now we're only looking at 2 million tons. Or is it possible to take, let's say, 1 million of those tons blended with some 69% material and it becomes DR-grade?
Speaker #4: So again, there's a lot of potential synergies between the two sites. Does it mean that we have to accelerate a DR transition at Rana Gruber?
David Cataford: Does it mean that we have to accelerate a DR transition at Rana Gruber, or does it mean that we can work in a different space? We'll definitely look at what's the most accretive for our shareholders, so.
Does it mean that we have to accelerate a DR transition at Rana Gruber, or does it mean that we can work in a different space? We'll definitely look at what's the most accretive for our shareholders, so.
Speaker #4: Or does it mean that we can work in a different space? We'll definitely look at what's the most accretive for our
Speaker #4: shareholders. That's very helpful.
Dalton Baretto: That's very helpful. Thank you.
Dalton Baretto: That's very helpful. Thank you.
Speaker #5: Thank
Speaker #5: you. Thank
Operator: Thank you. There are no further questions at this time. I would now like to turn the call over to David Cataford for the closing remark.
Operator: Thank you. There are no further questions at this time. I would now like to turn the call over to David Cataford for the closing remark.
Speaker #2: you. There are no further questions at this time. I would now like to turn the call over to David Cataford for the closing
Speaker #2: remarks. Super.
David Cataford: Super. Thanks everyone for your support. Thanks for being on the call today and not looking at a gold analyst at this time. Yes, gold is definitely in favor, but I do think that the high-grade premium for our material is gonna be extremely interesting in the coming years. When I look at our company, I mean, we're just coming out now of a seven-year CapEx cycle, roughly about $2.5 billion invested on time and on budget, to create the foundation that we have now. And I do think that in the future we'll be able to benefit from very good premiums and have a very interesting capital return strategy for our shareholders. Again, thanks everyone for your support and looking forward to speaking to you in the next quarter.
David Cataford: Super. Thanks everyone for your support. Thanks for being on the call today and not looking at a gold analyst at this time. Yes, gold is definitely in favor, but I do think that the high-grade premium for our material is gonna be extremely interesting in the coming years. When I look at our company, I mean, we're just coming out now of a seven-year CapEx cycle, roughly about $2.5 billion invested on time and on budget, to create the foundation that we have now. And I do think that in the future we'll be able to benefit from very good premiums and have a very interesting capital return strategy for our shareholders. Again, thanks everyone for your support and looking forward to speaking to you in the next quarter.
Speaker #4: Thanks, everyone, for your support. Thanks for being on the call today and not looking at a gold analyst at this time. So yes, gold is definitely in favor, but I do think that the high-grade premium for our material is going to be extremely interesting in the coming years.
Speaker #4: When I look at our company, I mean, we're just coming out now of a seven-year CAPEX cycle, roughly about 2.5 billion dollars invested on time and on budget to create the foundation that we have now.
Speaker #4: And I do think that in the future, we'll be able to benefit from very good premiums, and have a very interesting capital return strategy for our shareholders.
Speaker #4: So again, thanks, everyone, for your support and looking forward to speaking to you in the next quarter.
Operator: Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect your lines.
Operator: Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect your lines.
