Good morning ladies and gentlemen and welcome to the Champion Iron Limited Second Quarter Results of the Financial Year 2026 Conference call. At this time, lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you need assistance, please press star zero for the operator. This call is being recorded on Thursday, October 30, 2025. I would now like to turn the conference over to Michael Marcotte, Senior Vice President, Corporate Development and Capital Markets. Please go ahead. Thank you, operator. Thank you, everyone, for joining our call today. Before we get going, I'd like to point you to our website at championiron.com where you'll find the presentation we'll be using throughout this call. On our website, you can also find our MD&A where we make references to forward-looking statements, as we'll be making several forward-looking statements throughout this call. Joining me here today includes our CEO, David Cataford, who's going to be doing the formal presentation, and also Alexandre Belleau, our COO, in addition to other members of our executive team and some directors. With that, I'll pass it over to David, who will also do the Q&A portion on the back end of the call. David. Thanks, Michael. Thanks, everyone, for being on the call. Very happy to be able to discuss our second quarter fiscal year 2026 results. We had a few challenging quarters last year, but very happy to be able to announce robust results this quarter. Despite a maybe the rail of about 12 days, we still managed to hit a record concentrate sold. A very good job that we've managed to achieve. We'll be able to discuss this a little bit more in detail. Also improved our production. Despite the fact that we had semiannual shutdowns, I think the team did a fantastic job in being able to understand a little bit better the harder ore that we have and not only improve in terms of the plant's uptime, but also be able to work on the iron ore recovery to improve despite the generation of slightly more fines with this harder ore. When you combine all of these together, it allowed us to reduce our cash cost to about $76 per ton. As we've always said, we've got quite a lot of fixed cost at Bloom Lake. When we do improve our production, that allows us to reduce our operating costs. In terms of financial highlights, managed to achieve $175 million of EBITDA and just over $56 million of net income, which also allowed us to declare a semiannual dividend of $0.10 per share. If we turn to community governance and sustainability, one of the important elements that we have achieved in the past few months is to be able to present the opportunity for Canada to be able to invest in the high purity iron ore industry. Working with various groups on the federal level to be able to highlight the importance of investing in infrastructure to be able to help the Labrador Trough develop over the coming years. We've had quite a lot of traction on that side and been in Ottawa quite often to be able to meet with various groups. I think the discussions are extremely positive. We also welcomed the new Chief and his council to site. We had two productive days of being able to present everything we do and what are the next steps for Bloom Lake and other potential projects with the new Chief and his council. Very positive development during the quarter. If we look at the sales highlights, as we mentioned, it was a quarter that we had the annual shutdown on the rail, about 12 days downtime, but still managed to achieve quite a lot of sales. There are a few reasons for that. One, we are starting to benefit significantly from the increased rolling stock that is now in place and with all the various hires that IOC made, also to be able to operate the new locos. When you combine everything on that front, that definitely helped on the actual logistics chain. What we've done internally as well is improve significantly everywhere that we can. We've managed to increase the amount of ore per car, which allowed us to bring down more tons. I think the team did a fantastic job to be able to maximize every rail car that we have and every opportunity we have to be able to bring down tons. This allowed us to benefit from higher iron ore prices at the same time during the quarter. In terms of our stockpile, what does that mean? We managed to reduce our stockpile by about 477,000 tons during the quarter, down now to 1.7 million tons and continuing to bring that stockpile down. Very positive for cash flows. Hopefully in a few quarters we'll be able to have this piling events behind us and not go back to those discussions. In terms of our operations. Yes, we managed to produce quite a lot of tons in a quarter that we had our semi-annual shutdowns. I think one important thing to highlight as well is that your mine is in very good standing. We've invested quite a lot in terms of stripping to make sure that we keep the ore faces ready and make sure that we can operate this mine for the decades to come. Very happy with the results that we've managed to achieve not only on the concentrate front, but also on the mining side. Turning over to the actual P65 and the industry overview, you did see iron ore price increase by about 8.3% during the quarter. That's been very positive for us. A little bit of headwind in terms of the sea freight, an increase of about 12%. Realistically, the improvement on the iron ore price was better for us compared to the slight increase on the shipping costs. What does that mean in terms of provisional price? If you remember, at the end of last quarter we had expected to settle our tons at around $100 per ton. We managed to achieve $112 per ton. Since we had 2.5 million tons on the water, that gave us a provisional price impact of about $30 million for the quarter. Very positive for us. When you look at next quarter, we do have a potential upside if iron ore prices stay where they're at because at the end of last quarter we had 2.5 million tons on the water with an expected price of $114. As you've seen, iron ore price is closer to about $120 at this time. What does that mean in terms of our average realized selling price? If you look at the quarter, slightly lower than the average for the P65, one of the main impacts is definitely the fact that we had 2.5 million tons at the end of the quarter that was forecasted to settle at a lower price. That definitely had an impact on our realized price for the quarter. Secondly, as you know, we are finalizing now our DRPF project. This year we have been selling more tons on the spot market because we are going to transition to this higher grade material next year and did not want to lock up long term contracts for our current material that will be converted to higher grade. In terms of cash costs, as we mentioned, when you combine a very thorough shutdown, we managed with the teams to be able to not only hit the proposed time for the shutdown, but also worked very hard on managing our costs, improved our production and really worked with the teams to be able to see where can we improve in terms of cost without jeopardizing our long term plan and working altogether improving our production. We managed to hit $76 per ton during semiannual shutdown quarter. Very proud of what the team has been able to achieve. What does that mean in terms of financial highlights? Quarterly revenue is just shy of $500 million, EBITDA of $175 million, and an EPS of $0.11 per share. Very happy with the results that we managed to achieve in this quarter. What does that mean in terms of cash? Our cash did improve significantly during the quarter from $176 million- $325 million. Two main reasons for this. Obviously the great quarter that we had, but also the closing of our senior secured unsecured notes. That definitely helped in terms of our cash balance. Even if we continued investing in sustaining CapEx, continued investing in the actual DRPF project, paid our dividend, we managed to increase our cash from $176 million- $325 million in terms of balance sheet. We have over $1 billion of available liquidity. Very well positioned to be able to finalize our growth initiative to be able to convert half of our tons to 69%. Very well positioned as well now that we end our seven year CaPex run to be able to start deleveraging and potentially change our capital return structure in terms of growth projects. As we mentioned, our DRPF project is still on time to be able to deliver at the end of this calendar year. Very happy with the progress of the actual construction. In terms of cost, we do expect to finalize the project at roughly around $500 million, which is pretty much in line with the inflation adjusted capital expenditures going back to January 2023. When you look at the work that's been done in this inflation environment, very proud that we'll be able to deliver our third major project on time and on budget. In terms of Kami, you probably saw that during the quarter we finalized the transaction with Nippon Steel and Sojitz, securing the first payment of $68 million. When we discuss the cash of $325 million, this does not include the $68.6 million. This cash is in a restricted account controlled by us in the Kami partnership. That is over and above the $325 million that we currently have as cash within the company. Very happy of having closed that transaction. There's a bit of noise in the market when you look now in terms of what our premiums for high grade are. Where is iron ore going, but when you have two of the largest Japanese companies investing in a greenfield project in Canada to produce high grade iron ore, it really shows that we do believe we're in the right commodity going forward to be able to maximize return for our shareholders. Why do I say this? We have not seen projects of scale being able to come online to improve the quality of the actual iron ore that's traded on the seaborne market. What we're actually seeing is majors reducing the quality of the material. We have the P62 that is now a P61, so 1% less in terms of quality. We have seen contaminants increase significantly over the past decade, and we do see quite a lot of companies that are announcing declining grades in terms of their materials. We are a bit counter to that trend because we are improving the grade of our material. I do think that over time this is going to significantly increase the premiums for our material and trickle down as better returns for our shareholders. That being said, I'd like to thank the team because I think we did an outstanding job during this quarter, and I would like to turn it over to questions that you might have. 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 O n your touchtone phone, you will hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. First question is from Orest Wowkodaw at Scotiabank. Please go ahead. Hi, good morning and congratulations on the operating performance. Curious if you can give us some color on the improvement in cash costs. I mean last quarter you warned about costs staying elevated because of harder ore in a different pit. I was just curious, are you out of that pit earlier than expected or what's driving the improvement? Yeah, thanks for the question, Orest. When you look at the last quarter, we're still in that more difficult ore. I think what the team has managed to do, when we're in harder ore, it does create more fine material. There was an impact in terms of recovery. If you look at the last quarters, the team did a very good job in being able to improve on the recovery. We did quite a lot of work in the plants to make sure that we tweak our circuits to be able to maximize the recovery for that material. We also worked with the mining side to be able to switch a little bit the blending strategy. Definitely, as we've been a few months with this type of material, when we understand it a bit better, it's easier to be able to blend it and be able to minimize the impact. If you look at this quarter, we also had the volume effect. Going from roughly about 3.2 million tons- 3.5 million tons was definitely an improvement for us. If you combine all of those, that definitely helped in terms of our cash cost during the quarter. As a follow up, do you think these cash costs are now sustainable? As your next quarter is not a scheduled maintenance quarter, do you think you can maintain those costs? We're surely going to work to be able to reduce as much as we can the operating costs. I think, as you know, it's really a volume portion at this stage. I think that the teams have done a very good job in terms of the maintenance side, the uptime of the plants. If we can hold this in this quarter, I do expect that we'll be able to continue on our cost journey. Realistically, it all depends on the actual volume we'll be able to produce during the quarter. Okay, thank you very much. Thank you. Next question comes from Fadi Chamoun at B. Riley Securities. Please go ahead. Thank you very much, Operator. Good morning, everyone. David and the team, congrats on a strong quarter. Nice bid. Could you remind us please about seasonality that typically affects the destocking process? I know winter is not tough, but if you can quantify this. Going forward into the winter, should we expect kind of slow down in this activity? Thank you. Just to make sure, was a question on the destocking. Yes. When we look at what we've managed to achieve now, obviously we were in the best period of the year to be able to bring down material. There was no impact from forest fires. There was quite a lot of collaboration between ourselves and the rail operator. I think we were in the sweet spot in terms of bringing down tons. If I look at the next quarter, we're going to start entering the winter months and as you know, we have some mitigation measures to make sure that we don't fall material in the older cars. That definitely usually reduces a little bit the performance per train. Realistically, I think we've improved significantly the rolling stock and the actual logistics cycle. I think that's one positive and our team at site is definitely aligned to be able to find every opportunity that we have to not lose a single chance of putting tons on those trains. I think we've done some improvements that allow us to think we'll be able to continue stock, but we are entering into periods where there's a little less productivity on that front. Thank you, Helso. My follow up is on DRPFs. Is it fair to assume that the previous estimate of $20 per ton premium is appropriate for the output of DRPF. What is the expected ramp up profile in terms of volumes and timing, and specifically, what portion of total sales volume do you expect DRPFs to present once fully ramped would be a hub. Thank you. Yeah, thanks for your question. If you look at the DRPF, as you know, we're delivering the plant basically at the end of this year. We're going to be in a ramp-up period for a few months. We do expect to have our first commercial vessel to be sold in the first half of the 2026 calendar year. Going forward, what we are going to do is to be able to place those tons, as we mentioned, closer to home to start benefiting not only from premiums for the high grade, but also from improved shipping costs. When we look at the expected premium, next year is going to be a transition year. We're going to work with our clients to be able to prove that we can make 69% material and they'll be able to test it in their plant. As with all new products, there's usually a little bit of lag time before we get the full benefits of this material. We do expect that these premiums will be significant once we've finalized a ramp-up, worked with our various clients, and are able to sign longer-term contracts for this type of material. Okay, thank you. I'll go back to queue. Congrats one more time. Thank you. The next question comes from Craig Hutchison at TD Cowen. Please go ahead. Hi, good morning guys. Pretty impressive sales volumes for the quarter. I just wanted to confirm, maybe follow up to the last question. Did you guys have this scheduled maintenance or was there a scheduled maintenance in September that you typically occur, or is that something that's going to be pushed into Q4? Yeah, thanks for the question, Greg. During the quarter there was a 12-day shutdown that did happen in September. Despite that, we still managed to achieve the result that we did. I think it was a very good combination of teamwork and the collaboration between us and IOC. Okay, great. Just on the DRPF, I mean the spending in the quarter was a bit lighter than I expected. You talked about a slight increase on inflation. Is the balance of spending mostly going to be pushed into the calendar fourth quarter, or will some of that be spread out into early next year as well? It's always difficult to match that perfectly between the work that's actually being done and what's being paid. There is a lag sometimes of work being done and the actual payments. It's not because we reduced the cadence during the quarter. It's really due more to payment schedules that we have. We have not reduced the cadence on that project. When you look at the actual dollars out, it's probably going to be a few quarters after the completion of the plant that you'll see the final sort of investment for the DRPF. That's the same thing as what happened with Phase Two or with Phase One. Okay, great. Just on the DRPF project in general, I know the plan is to start shipping commercial volumes second half of next year. Is the plan to blend in the first half? Will you guys be expensing that and booking that as revenue if you blend it with your other material, or is the plan to capitalize some of those costs and revenues through the first half until you're producing a product that sort of meets spec? Right now what we're targeting to do initially is probably to blend the materials. We will be paid for the iron units. As we ramp up the plant, if it's a very smooth ride and we can deliver it quicker, that strategy will change. Right now the strategy is really to be able to prove the quality of the material. First, especially, we're starting this in the winter months, not the best month to be able to start two products at the port, two products with the trains. We want to demonstrate the actual robustness of the plant, make sure that we can achieve the different qualities. At first, as you mentioned, we'll be blending that, and that will trickle down in terms of revenue only in iron units. There are usually formulas that we have already in place with our various clients to be able to account for that. As we're comfortable with the delivery of the plant, we'll be able to start really segregating two types of materials and having 69% concentrate or pellet feed and our typical 66% material. Okay, great. Maybe just one last question for me. Can you just talk in what you're hearing in the DRPF product in general? I think the last question was just on premiums. How robust is the market right now? I know there's some weakness in Europe and other places, but just give us a broad overview of what you're hearing with regards to DRPF in general. When you look at it now, I think it's a bit of an abnormal situation. Obviously, you see the price for the DRPF. It's not at its all-time high. It's very far from that. It's pretty much at cyclical lows, which I actually think plays in our favor because it doesn't incentivize a whole lot of people to be able to do what we're doing when we look at what's potentially happening next year. We have seen the first positive news out of Europe in the steel industry in quite a long time. Europe is looking to implement tariffs to be able to protect against some Asian tons that are now coming into Europe. As that happens, and what we're seeing with the different steel mills that we're speaking to, it's the first time in about five years that people seem a little bit positive. If that happens and Europe does increase the amount of steel that they produce, that is definitely a positive for us and for premiums in terms of this type of material. We have seen projects also in North Africa and even in Europe that are continuing in terms of their DRI and EAF transitions. Some have been delivered, some will be delivered next year and the following year. We're seeing the same in the Middle East. There might be a bit of a lag between when we see the actual crunch for demand for this type of material and when we deliver our plant, but we still think that this material is going to fetch a pretty significant premium. Great, great quarter, guys. Thanks. Thank you. Ladies and gentlemen, as a reminder, should you have any questions, please press star followed by 1. The next question comes from Stefan Ioannou at Cormark Securities. Please go ahead. Yeah, thanks, guys. Most of my questions have been kind of answered in general, but maybe just one more thing on the stockpile destocking. Is it still, I know it kind of, it's going to vary quarter to quarter based on maintenance and weather and whatnot. Is a fair assumption that this is something that gets down to a "normal" level, say through the end of 2026? Is that a good way to think about it? I mean, I would love to do it quicker if I can. Definitely we're going to put all the efforts to get there. I think it's a reasonable prediction. Again, as you know, we do not control the rails, so we're going to live with that partnership. I do see some improvements. I mean, 477,000 tons during the quarter I think was pretty hitting a record sales even if they had a 12-day shutdown. We'll capitalize on every opportunity we have to bring down that stockpile. We should not in the future have more than a few hundred thousand tons at site that is varying up and down depending on weather and things like that. Our strategy, as you know, has never been to stockpile material. Hopefully by the end of 2026, as you mentioned, that story can be behind us. Okay, great. Maybe just the minutiae of this idea of, you know, when you start creating the higher grade, blending it at first, I'm just curious, like when you start producing it and you're showing the plant works, how long does it take a potential customer to take that material, test it, get comfortable with it, and then come back to sign a contract? It depends on which client and how much they need the material. Once we've got the specs, we've already sent quite a lot of test material to our various clients, so they have tested it at various levels in their labs. I think it's more of a waiting pattern for certain to make sure that we can actually hit the quality. I think we've seen in the mining industry, few people sometimes overpromise things and underdeliver. It's not really the way that we work. When you say that, it doesn't mean that people believe us until they see the actual material. I expect that once we're able to produce the material, that doubt is going to be behind and we'll be able to start signing the long-term contract. Okay, great. Thanks very much and congrats again on the nice quarter. Thank you. We have no further questions. I will turn the call back over to David Cataford for closing comments. Yes, again, thanks everyone for your support. When we look at our company, we've had quite a lot of support from all of you over the past seven, eight years that we've done a significant CapEx run to be able to get the company where it's at now. We've got a very strong foundation. We're going to deliver one of the best products in the world. We're going to be able to capitalize on increased premiums going forward. There might be a little lag on that, but I still think it's the right strategy because we're really differentiating ourselves from what we're seeing in the rest of the world where quality is declining. Next year is an inflection point for us. It's really the moment where CapEx or significant CapEx are a bit behind us and we can start benefiting from all the investments that we've made. Again, thanks for your support over the years and looking forward to be able to present the next quarter in a few months. Thanks, everyone. Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.