Champion Iron has approved the Bloom Lake Phase 2 expansion. This will double the miner’s production capacity to circa 15mtpa from circa 7.5mtpa.
Macquarie considers Champion Iron’s decision to approve the Bloom Lake Phase II expansion encouraging, and considers the timeline and capex to be better than the broker’s previous assumptions.
The broker believes the project can be funded from the miner’s cash balance and cash flow generation if iron-ore prices remain buoyant.
Target rises to $4.80 from $4.40, Outperform retained.
Sector: Materials.
Target price is $4.80.Current Price is $3.95. Difference: $0.85 – (brackets indicate current price is over target). If CIA meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges – negative figures indicate an expected loss).
