The company says its leadership has given the green light for a feasibility study for a phase II expansion of operations at Bloom Lake.
Champion Iron (TSX:CIA,ASX:CIA,OTC Pink:CHPRF) has revealed it’s looking to double down on its flagship Bloom Lake mine in Quebec only a year after it started operations there.
In its financial reporting released on Thursday (February 14), the company said its leadership had given the green light for a feasibility study into a phase II expansion of operations at Bloom Lake.
“The expansion would mainly involve the completion of construction work on a processing plant and other supporting infrastructure which was interrupted in November 2012 by the previous owner,” said the company.
The company reported a net income of C$31.2 million for the quarter, and C$119.4 million for the nine-month period ended December 31, 2018. It also said it was flush with cash, with C$185 cash-on-hand as of December 31 — up from C$25 cash-on-hand on April 1 2018.
Perfect spending money for a proposed expansion then.
“The expansion aims at doubling the current operational capacity with a production of 7.5 million tonnes of high-grade 66 percent iron concentrate.”
For the nine months the mine was operational in 2018, it produced 5.1 million tonnes of iron ore concentrate at 66.5 percent Fe content.
A decision on whether or not to go ahead will be based on the results of the study, which is said would be published by late 2019.
“Pending a positive decision resulting from an economical feasibility study, construction could start in late 2019 or early 2020 with first production as early as 2021. Phase II could potentially create over 500 jobs during construction and 200 permanent operational jobs.”
So far, Champion Iron said it had spent C$2.14 million on the phase II feasibility study.
The company also provided an exploration update — besides the Bloom Lake mine which it has a 63.2-percent interest in with the remainder owned by Ressources Quebec — Champion is the 100-percent owner of the Fermont property in the Fermont iron ore district (where Bloom Lake is also located).
The company said that drill samples from Fermont collected during 2018 would be submitted for analysis soon, with the results used to update the historical resource.
Additionally, the company reported that during the December quarter it had spent C$1.1 million on drilling at the Powderhorn property in Newfoundland and Labrador, where it’s drilled 14,000m so far. An additional 4,000 m of drilling commenced in January.
On the TSX, Champion Iron was down 4.7 percent on Thursday, trading at C$1.42. After closing out 2018 at C$1.08, year-to-date the company has so far increased by 30 percent on the exchange.
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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.