Champion Iron Q4 2026 Earnings Report

Champion Iron EPS Results

• Actual EPS: C$0.05
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Champion Iron Revenue Results

• Actual Revenue: $414.51 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Champion Iron Announcement Details

• Quarter: Q4 2026
• Date: 5/28/2026
• Time: After Market Closes
• Conference Call Date: Thursday, May 28, 2026
• Conference Call Time: 9:00AM ET

Champion Iron (TSE:CIA) Ltd is engaged in the exploration and development of iron ore properties in Quebec, Canada. The company's operating segment include Mine Site, Exploration and Evaluation, and Corporate. It generates maximum revenue from Mine Site segment. The company projects include Fire Lake North, Powderhorn/Gullbridge, Moire, Quinto Claims, Harvey Tuttle, O'keefe-Purdy, and others.

Champion Iron Q4 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Champion posted a solid Q4 with 3.4 million tons produced, 3.45 million tons sold, CAD 414 million in revenue, and CAD 114 million of EBITDA. Iron recovery also improved to 80.6%.
• Neutral Sentiment: Management said operations were hurt by a planned maintenance shutdown, a third-party train derailment, and a harsh winter that hurt logistics and increased costs by about CAD 5 per ton. Despite that, Bloom Lake moved about 21 million tons at the mine for the quarter.
• Positive Sentiment: The company said it met or exceeded all 14 sustainability targets and recorded another quarter with no major environmental issues at Bloom Lake. It also highlighted a 99.1% water recycling rate and a 2.6% year-over-year reduction in GHG emissions.
• Neutral Sentiment: Champion announced a new dynamic dividend policy targeting semi-annual payouts of 30%–40% of trailing six-month free cash flow, while also declaring a CAD 0.02 per share dividend for now. Management said the more conservative payout reflects volatile fuel and freight conditions and a focus on cash preservation.
• Positive Sentiment: The DRPF flotation plant is nearing completion, with about CAD 480 million of the CAD 500 million budget already invested and ramp-up underway. Management expects to sell first cargoes in coming weeks or months and said the plant remains on track to be fully ramped next year within budget.

Presentation

[Operator]

Morning, ladies and gentlemen, and welcome to the Champion Q4 Results of the Financial Year 2026 Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we'll conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, May 28th, 2026. I would now like to turn the conference over to Michael Marcotte, Senior Vice-President, Corporate Development and Capital Markets. Please go ahead.

[Michael Marcotte, SVP, Corporate Development and Capital Markets at Champion Iron]

Thank you, operator, thank you everyone for joining us to discuss our fourth quarter results of the 2026 financial year. Before we get going, I'd like to highlight that throughout this call, I will be making forward-looking statements. If you would like to read more about forward-looking statement risks and assumptions, you can go and visit our MD&A, which is available on our website. We will also be using a presentation throughout this call that's also available on our website under the Management Presentation tab. Joining me here on this call include our CEO, David Cataford, our Chairman, Michael O'Keeffe, our COO, Alexandre Belleau. With that, I'll turn it over to David for the formal portion of the presentation.

[David Cataford, CEO at Champion Iron]

Thanks, Michael. Thanks, everyone, for being on the call. If we go through the highlights for the fourth quarter of fiscal 2026, we managed to produce just over 3.4 million tons during the quarter and sold just over 3.45 million tons. Our iron recovery trended up to 80.6%. Revenues of CAD 414 million and an EBITDA of just over CAD 114 million for the quarter. If we look at community governance and sustainability, we were very happy to receive the Minister of Natural Resources and Forests at our site, being able to continue working with our partners, the Government of Quebec, on looking at opportunities to be able to invest in infrastructure in the Labrador Trough.

[David Cataford, CEO at Champion Iron]

We've also had quite a lot of discussions with other officials, either on the federal side or with the various communities, to be able to start looking at opportunities to invest in infrastructure in the region. In terms of ESG disclosure and performance, happy to mention that we've successfully met or exceeded all 14 of our sustainability targets that we set in the previous year. Also, very proud that we've managed to have yet another quarter with no major environmental issues at Bloom Lake. We've been flawless since 2018 in terms of major environmental issues. Also happy to say that we're still a leading position in recycled water at site. About 99.1% of the water at Bloom Lake is recycled, and also that we've managed to reduce our GHG emissions by 2.6% year-over-year.

[David Cataford, CEO at Champion Iron]

If we turn to operational results, as we mentioned, high-level 3.4 million tons produced during the quarter, an 8% increase year-over-year. We were impacted during the quarter with our two semi-annual shutdowns that were planned shutdowns. We had a little bit more challenge in terms of the sales, 3.5 million tons during the quarter, comparable year-over-year. We were impacted by third-party train derailment, which happened between the two quarters, but that mainly impacted us during this quarter. Also had quite a harsh winter that created quite a lot of carryback in our ore cars, which reduced our productivity in terms of logistics. It was a tough winter. We still had a decent quarter, under what we had initially planned. We managed to bring down the stockpile by about 200,000 tons.

[David Cataford, CEO at Champion Iron]

One of the main highlights, despite this challenging weather period, we did manage to move about 21 million tons at the mine, 3% year-over-year increase. Very happy with the way that the pit health is at Bloom Lake. In terms of the industry overview, in terms of the P65 iron ore index, pretty flat quarter-over-quarter, a slight increase of 1.7%. We did see a larger spread between the P61 index and the P65. Going from about $13 per ton to $17 per ton. Where we saw a negative impact was mainly on the C3 freight that started increasing by about 4% quarter-over-quarter to about $25 per ton, mainly due to the impact of the conflict in the Middle East. If we look at provisional price adjustment, it's a pretty uneventful quarter.

[David Cataford, CEO at Champion Iron]

We expected to sell at around $117.4 per ton. The tons on the waters were sold at about $117.2, so a negative impact of about $300,000. Going forward, at the end of last quarter, we had 2.3 million tons on the water and expected a settlement of $120.2 per ton. In terms of our average realized selling price, we got pretty much the P65 index during the quarter. If we reduce our freight costs and convert also into Canadian dollars, we had a net realized price of about CAD 120. In terms of our operating costs, trending a little bit higher than the previous quarters.

[David Cataford, CEO at Champion Iron]

Main impacts during the quarter for us, obviously it was our two semi-annual shutdowns, that typically are the quarters that we have a slightly higher operating cost. We were negatively impacted by three various elements. One being, as we mentioned, the winter conditions and the train derailment. That impacted us by roughly about CAD 3 per ton during the quarter. We started to see fuel increase impacts of roughly about CAD 1 per ton. As we mentioned, we destocked a portion of our stockpile, which carried a negative impact of about CAD 1 per ton. All in all, roughly about CAD 5 per ton, accounting for those three elements that I've just mentioned. If you look at the results, minus that CAD 5, trending similar to the previous quarter with two semi-annual shutdowns.

[David Cataford, CEO at Champion Iron]

Still working on various ways that we can continue reducing the cost on the elements that we control at site. In terms of the financial highlights, quarterly revenues of CAD 414 million, EBITDA of CAD 114 million, net income of CAD 23.2 million, and an EPS of CAD 0.04 per share. In terms of cash change during the quarter, our cash went from about CAD 245 million to close to CAD 300 million during the quarter, all at the same time of investing roughly about CAD 40 million in our flotation plant and just over CAD 50 million on sustaining CapEx. In terms of our balance sheet, still very strong balance sheet with significant liquidities to be able to allow us to continue finalizing our growth initiatives.

[David Cataford, CEO at Champion Iron]

We've also implemented our debt financing, the new term loan of CAD 150 million with our syndicate of banks, to be able to allow us to complete the Rana Gruber acquisition during the quarter. In terms of dividend, we're implementing a revised dynamic dividend policy. As we mentioned in the past, we're coming out of an eight-year, pretty large CapEx cycle, and we wanted to make sure that we've got a framework that allows better visibility for our shareholders in terms of the redistribution of capital. The new dividend policy aims to provide semi-annual dividends equivalent to 30%-40% of the company's trailing six-month free cash flows. The board also has, at its discretion, the potential to deliver a special dividend. When we look at these results today, to be able to maintain a focus on preserving the company's liquidities with the current volatile macroeconomic conditions.

[David Cataford, CEO at Champion Iron]

When we look at the conflict, mainly in the Middle East, impacting oil prices and freight prices, the board has announced to declare a CAD 0.02 dividend per share. The new dividend policy will come into effect in the next semi-annual dividend. As mentioned, in terms of CapEx over the past years, we've reinvested about CAD 1.4 billion in growth CapEx at Bloom Lake to double our capacity and to also upgrade one of our facilities to 69%. Quite a lot of CapEx was invested to build the foundation that we have today, and we do expect in the future that we'll be able to generate significant liquidities due to these investments, and we wanted to make sure that we have a dividend policy that is predictable in terms of how much to redistribute to shareholders.

[David Cataford, CEO at Champion Iron]

If we look at the cost curve, one of the elements that's interesting is the fact that the 90th percentile on the cost curve has increased significantly over the past few weeks and months. Since the start of the conflict, we've seen the 90th percentile increase from $65 per ton-$83 per ton, an $18 increase. If we look at today's premium, so the price of iron ore over and above the 90th percentile, we're pretty similar to moments like in 2015 and 2016, where we saw that premium being the lowest pretty much since the indexes were created.

[David Cataford, CEO at Champion Iron]

If you look at historical results, it typically trends closer to, or the levels that we've had would be, if you look at the iron ore price versus the 90th percentile, iron ore price, if you look at historical data, should be closer to about $140 per ton. What does that tell us? Either two things, either potentially the cost curve goes back down, or potentially the iron ore price goes back up if we are to look at historical data. Pretty interesting to see that, yes, during the quarter, our cash costs increased slightly, but the 90th percentile increased significantly. In terms of growth and development, when you look at what we've delivered and where we're at now with our flotation plant, we've invested roughly about CAD 480 million of the CAD 500 million project. We're pretty close to the finish. We're currently ramping up the plant.

[David Cataford, CEO at Champion Iron]

We have started the plant. We have delivered sellable quality. We are in the process now of removing all the various bugs that you see during a startup. We still feel confident that next year we'll be fully ramped up, and we do expect, over the coming weeks and months, to be able to sell our first cargoes of DRPF material. I'd say the ramp-up is going very well, as expected, and we still feel confident that we'll be able to finish the project within the budget of CAD 500 million. Finally, just a note on the Rana Gruber acquisition. We've managed to complete the acquisition a few weeks ago, so we're now 100% owners of the Rana Gruber site in Norway. We're continuing our integration now.

[David Cataford, CEO at Champion Iron]

I'm actually going to Norway next week with our COO and our head of HR to be able to continue on the integration and make sure that we can benefit from the synergies that we previously mentioned and look at opportunities to be able to improve and work with the Rana Gruber team to increase the profitability of the site over there. Very happy of having concluded this acquisition, roughly about, I think it was actually day for day, 10 years following the acquisition of Bloom Lake. Very happy with this next step of our journey within Champion. With that being said, I'd like to thank, first of all of our employees and also all of our shareholders. Thanks for your support, and we'll turn it over now to the Q&A portion of the call.

[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 your touch tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from polling process, please press the star followed by the two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. First question comes from Alexander Pearce from BMO. Please, go ahead.

[Alexander Pearce, Analyst at BMO Capital Markets]

Thanks. Morning, David. You flagged some of the cost pressures, which we're seeing across the industry. Is it possible for you to give us an idea of how sensitive your costs are to higher fuel costs and oil costs? Are there any measures that you can take to reduce some of these external cost pressures?

[David Cataford, CEO at Champion Iron]

Thanks for the question, Alexander. When we look at the impact, at site, as you know, we benefit from quite a lot of hydroelectric power. Roughly about 65% of our power is from hydroelectric. We consume roughly about 40 million liters per year at site. Pretty easy to see the calculation on the impact directly at site. Where we do see an indirect impact is on our logistics, so either on the rail portion or also on the freight cost. You did see the C3 index increase in the past few weeks, mainly due to the higher oil prices. If you look at our direct impact at site, as we mentioned, roughly about 40 million liters consumed at site per year.

[Alexander Pearce, Analyst at BMO Capital Markets]

Okay, thanks. Just a second question just on the DRPF plant. I was hoping you could give us a little bit more detail around the ramp-up timing. You said around 12 months after initial production testing. Does that mean mid-2027 or calendar 2027, or should we think towards the end of the calendar year for full production?

[David Cataford, CEO at Champion Iron]

When we look at the ramp-up right now, when I say that it's going fairly well, we've had multi-day runs with the plant, producing sellable quality. I'd say the whole flow sheet works very well. I'm not concerned with the selection of the equipment. I'm not concerned with the way that we've installed it. When I look at what we're doing now, we're starting it up, running a few days, stopping to repair a pump, to repair some piping, to be able to de-risk all the main items that we see with the operation. I'd say we're in pretty normal territory. I haven't seen anything major that has come up since the start-up of the plant. Again, I think the teams did a fantastic job in, one, designing the plant properly, but two, executing the construction in a very good way.

[David Cataford, CEO at Champion Iron]

Very happy with the way that the ramp-up is going. Yep.

[Alexander Pearce, Analyst at BMO Capital Markets]

Just in terms of timing for full capacity, the middle of next year or maybe later, or would you prefer not to say at this point?

[David Cataford, CEO at Champion Iron]

Yeah. Well, what we've always thought and what we had planned was roughly about 12 months to be able to finalize the ramp-up. Obviously, if we could do quicker we'll be able to announce it and do it. If you look at our Phase I and Phase II, we did deliver ahead of the initial scheduled time. This is new equipment, so before I get too excited, I just want to make sure that I give the more official lines. I'll be happy if we're able to deliver that quicker. It'd be a pretty good visit also next time that you guys come to site to be able to see it in operation. It's a pretty nice plant that we've built beside our Phase II plant.

[Alexander Pearce, Analyst at BMO Capital Markets]

Thanks, David.

[Operator]

Thank you for that. The next question comes from Orest Wowkodaw from Scotiabank. You please go ahead.

[Orest Wowkodaw, Analyst at Scotiabank]

Hi, good morning. A couple of follow-ups on the previous question. First of all, on the DRPF product, I assume you're starting to sign contracts with customers. Can you give us a sense of what those premiums look like? I'm sure you probably don't want to be specific, but are they meaningfully above the current 65 price, or are they just modestly above? I'm just wondering how we should think about your premiums moving forward here as this product gets into your product mix.

[David Cataford, CEO at Champion Iron]

Yeah, thanks for the question, Orest. If we look at the current situation, as we've mentioned in the past, the first cargoes are going to be trial cargoes. Obviously we're selling to potential clients to be able to test the material in their facilities. If we go back to the lab work that we had done, the big advantage of this material is that it actually helped steel mills to be able to reduce their operating cost because of the improved reducibility and the characteristics of the material. We do expect that that'll be able to be demonstrated once they've purchased the material. We are in the process to locking up the various clients that we want to sell this material to. I'd say the first cargo is obviously, as we mentioned, they'll be more trial cargoes.

[David Cataford, CEO at Champion Iron]

When we get a little bit further down the line, when you account for the great benefits, because we'll be selling closer to home and the premiums for our material, I do expect that it'll be significant premiums compared to what we have now. I can't really disclose the exact numbers because obviously we're in negotiations with our various clients. I'd say it's probably going to take a little bit of time to be able to reach the full feasibility study premiums. I'd say in the interim, we still will make significant premiums over and above what we have now.

[Orest Wowkodaw, Analyst at Scotiabank]

Okay. Just remind me, I think your feasibility was assuming a ultimate premium of CAD 26 a ton. Is that what you're referring to?

[David Cataford, CEO at Champion Iron]

Yeah, order of magnitude, that's where it was. It did ramp up, but that's pretty much what it was, including the freight advantages.

[Orest Wowkodaw, Analyst at Scotiabank]

Okay. Can you give us some color on what's happening in the DR market, just given the conflict in the Middle East? I would've thought that maybe you would benefit from that market being disrupted. Can you give us a sense of what's happening specifically with your pricing? Are you seeing any kind of premium maybe, or just trying to understand what's happening in that market.

[David Cataford, CEO at Champion Iron]

Yeah, there's quite a moving dynamic when you look at what's happening. We've seen tons from Brazil, and from other markets that typically went into the Middle East that are seeing its way into China. That's put a little bit pressure, I'd say, on the higher grade market. I do believe that's potentially short-term because once everything equalizes and eventually the conflict gets resolved, well, there could be some sort of squeeze in terms of the demand for this type of material. We do see some potential advantages in the near future, should the conflict get resolved. In terms of DR market, we're still seeing healthy demand for our type of material. There's a few plants in the Middle East that don't have access to bringing in material now. It's not a majority of the DR market that has been impacted.

[David Cataford, CEO at Champion Iron]

As we mentioned, I still think that there's healthy market for our material, and I do see some potential short-term benefits should the conflict get resolved.

[Orest Wowkodaw, Analyst at Scotiabank]

Okay. Just one quick one, if I could. You mentioned just the diesel impact in terms of 40 million liters of consumption. How does your rail contract work? Is there escalators tied to the price of diesel that would also impact your cost moving forward?

[David Cataford, CEO at Champion Iron]

Yeah. Every six months, there's a sort of adjustment due to the fuel prices. If it goes up, well, then the contract is adjusted up, but then when it goes back down, the contract is readjusted back down. That mechanism is in place in terms of our rail contract. It makes sense because when you look at the operating costs, fuel is one of the large components in this rail contract.

[Orest Wowkodaw, Analyst at Scotiabank]

Is the next adjustment sort of calendar Q3? Is that when you'd see the impact of that?

[David Cataford, CEO at Champion Iron]

Yeah. It sort of looks back six months, adjusted every six months. I'd have to check what's the exact date of this renegotiation, but typically it's about half year.

[Orest Wowkodaw, Analyst at Scotiabank]

Okay

[David Cataford, CEO at Champion Iron]

calendar year. Yeah.

[Orest Wowkodaw, Analyst at Scotiabank]

Okay. Thank you.

[Operator]

Thank you. Next question comes from Fedor Shabalin from B. Riley Securities. Please go ahead.

[Fedor Shabalin, Analyst at B. Riley Securities]

Thank you very much, operator, good morning, everyone. David, now that Rana has closed, can you frame what we should expect for Rana's standalone cash costs in the first few quarters, under Champion's ownership versus its historical run rate? When do you expect integration costs and any maybe one-time G&A items to peak in the P&L? Should we kind of modeling higher consolidated cash costs in the first half of this fiscal year before synergies materialize? If so, when does the trough to recovery happen? Thank you.

[David Cataford, CEO at Champion Iron]

Yeah, thanks for the question. When we look at the acquisition, very excited about having completed this recently. We definitely want to work with the teams to see areas that we can improve in the future. In terms of cash costs, while they were trending lower than Bloom Lake in the past, obviously they've been impacted as well, or we've been impacted as well with this site in terms of the fuel prices. There will be some adjustments on that front. Apart from that, I think the operations are going very well. Definitely in the near future, the next steps for us is to continue the integration to make sure that we can continue working with the site.

[David Cataford, CEO at Champion Iron]

As you had seen in the past, they had started coming into the 65% grades, but the iron ore recoveries, with the new equipment, were pretty low. Definitely looking to work with the teams over there to improve on the iron ore recovery, which should help, one, on cost, but two, on tonnage as well. We do see some potential improvements with the site in the coming few months.

[Fedor Shabalin, Analyst at B. Riley Securities]

That's encouraging. Thank you. My follow-up is about Middle East conflict again. If the conflict persists and DRI, EAF capacity in the Gulf faces feedstock disruption, does it change the addressable market or pricing power for your DRPF product? Maybe put differently, are you seeing customer conversations shift in terms of contract structures or premium willingness or maybe geographic mix, as buyers think about supply chain resilience?

[David Cataford, CEO at Champion Iron]

Yeah, thanks for the question, Fedor. When we look at our strategy, and I think that's been very positive in the past, we've never put all of our eggs in the same basket. We always work with many different potential clients. You've seen our mix of concentrate in the past. We've spread it quite a lot around the world. When we look at DR grade, well, the markets we're targeting is Europe, North Africa, Middle East, and also looking at other potential markets. The Middle East now has not been completely impacted. There's still areas that we can continue conversations and potentially selling material. We see North Africa that's been ramping up as well. That's definitely one of the target areas. Starting next year, we should see Europe kick in as well with the delivery of the demand for this type of material.

[David Cataford, CEO at Champion Iron]

The conflict obviously removes a few players from the equation short-term, but we're still continuing the conversation with these groups as well, because I do think once the conflict is resolved, that will be one of our best markets.

[Fedor Shabalin, Analyst at B. Riley Securities]

That's helpful. Thank you very much. Continue. Best of luck.

[David Cataford, CEO at Champion Iron]

Thank you, Fedor.

[Operator]

Thank you. For your next question comes from Stefan Ioannou from ATB Cormark. Please go ahead.

[Stefan Ioannou, Analyst at ATB Cormark]

Thanks very much, guys. Just curious, looking to the DRPPF going forward as you start to make meaningful volumes, just given sort of some of the issues we've seen on the rail and the port up to now, can you just comment on, are you all set up in terms of just logistically being able to handle two different products going forward through those various facilities?

[David Cataford, CEO at Champion Iron]

Thanks for the question, Stefan. In terms of the rail, I don't see any impacts whatsoever because it's the same rail cars, it's the same logistics. At the port, obviously, we're working closely with the groups there. As you know, we're on the board of that entity. We're also working very closely with the operations. There's been investments of over CAD 450 million that have been done in the past. There's a large set down area. There's a lot of redundancy in terms of stacker reclaimers. There's quite a lot of work that was done in the past to be able to accommodate this type of material. I don't expect major impacts at the port in terms of logistics with this new product. There's always a learning curve when we change the status quo.

[David Cataford, CEO at Champion Iron]

That being said, I think we've got great teams working together to be able to make that work.

[Stefan Ioannou, Analyst at ATB Cormark]

Okay, great. Thanks very much, guys.

[David Cataford, CEO at Champion Iron]

Thanks, Stefan.

[Operator]

Thank you so much for that. As a reminder, if you wish to make a question, please press star one. There are no further questions at this time. We will now turn the call over to Michael O'Keeffe, Executive Chairman, for the closing remark. Please continue.

[Michael O'Keeffe, Chairman at Champion Iron]

Thank you, shareholders, and thank you, David, for that very good update on where we are. As I sit here and reflect on what's happened, I just realize it's been 10 years since we took control of Bloom Lake, and it's been quite a journey from trying to raise the money in a difficult start, a difficult period, where iron ore prices were through the floor. I mean, we're now after 10 years dealing with a world crisis with fuel and managing to navigate our way through that. Now, that wouldn't happen without the right team of people. We've maintained that executive team over that period, and they've delivered not only on time and on budget for when we first commissioned the plant in 2018, right through to now with phase II and then with the high-grade pellet plant feed. That's in itself quite an achievement.

[Michael O'Keeffe, Chairman at Champion Iron]

There's not too many projects, especially in mining around the world, that you see that. That's been done, as David highlighted, with the environmental record that we've set, but also the safety record that's been set. As David finishes off, he talks about the care of our people, and that is primary in our business. All of that achieved has been quite an amazing effort over the last 10 years. Yes, we're in difficult times now, and especially for bulk commodities, and it's, as you know, bulk commodities are big volumes, and it's a lot of rail, trucking, handling, and shipping. Obviously with the crisis that's going on in the world and fuel prices where they are, we as a board and management have to really reflect on this and make sure that we don't put the company under any jeopardy.

[Michael O'Keeffe, Chairman at Champion Iron]

Cash preservation is critical for us, which you've seen in the dividends and with the new dividend policy coming forward. We also wanted to make sure that dividend continued, which we did, and that's as respect to shareholders. It's interesting for me also to reflect because being an Australian, I'm seeing what's happening in Australia with the Australian government trying to balance the books. All they're doing is taking more and more money off the middle class and the wealthy just to try and balance their books. They've made some critical blunders, and that is, one, selling all their fuel hedges and their fuel supplies that they've had for short-term cash gains, which were put in place by the previous government.

[Michael O'Keeffe, Chairman at Champion Iron]

That now is really driving home some huge problems for them in the sense that they're running around the world just trying to find fuel, not only pay for the expensive price of it, but so they're paying additional premiums now. All those stupid mistakes made by a government where it's not their own money is very sad. As you know, Australia relies heavily on the mining industry, and a lot of that is bulk and iron ore and coal. I feel very sorry for those people. Now, because it's our money and your money as shareholders, we're not falling into those traps of stupid decisions by the board and management. That's why you're seeing the cash preservation we're entering in. The good thing, as David mentioned also, a lot of our power is generated by hydroelectricity. Again, we are reliant on fuel.

[Michael O'Keeffe, Chairman at Champion Iron]

The fact is, we do have access to fuel in Canada. We have a refinery nearby us where the crude is delivered, it is available. Whereas, in other parts of the world, it's becoming more and more scarce. Also, as I think one of the analysts mentioned, that there must be gains in this with the Iran war and what's happening in Ukraine as well, because that takes about 40 million tons of high-grade out of the market. With this material we're now producing, we're getting more and more phone calls. Our marketing team has just returned from Europe and Asia, there's a huge amount of interest in this product. All in all, our balance sheet's healthy. Let's pray to God that this conflict ends soon, we can get back to some normality.

[Michael O'Keeffe, Chairman at Champion Iron]

The other great thing is that our capital programs have been cut back now in the sense, not cut back, but being completed. Also we're looking carefully across the board at what our capital program should be in anticipation for a prolonged war in the Middle East. I'm very happy where the company is today. Thank you for your support and let's hope that we can get on to rosy times and all make a lot of money with this new dividend policy that's coming up. Thank you again for your patience and, again, thank you to my team who are the best in the world. On that note, I'll bid you adieu.

[Operator]

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect. Have a good day. Bye.

Participants

Executives

• David Cataford, CEO
• Michael Marcotte, SVP, Corporate Development and Capital Markets
• Michael O'Keeffe, Chairman

Analysts

• Alexander Pearce, Analyst at BMO Capital Markets
• Fedor Shabalin, Analyst at B. Riley Securities
• Orest Wowkodaw, Analyst at Scotiabank
• Stefan Ioannou, Analyst at ATB Cormark