65% Fe at US$194/t, page-2

Toronto newspaper 'The Globe and Mail' had this article yesterday (Posted on Stockhouse forum)
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Equity analysts at RBC Dominion Securities added three TSX-listed companies to their “Q1/21 Global Mining Best Ideas Portfolio” on Tuesday.

“For Q1/21, we are maintaining Precious Metals at Overweight and Base Metals at Market Weight,” they said. “We are increasing Diversified/Bulk Commodities and Fertilizers to Overweight, from Market Weight and Underweight, respectively. We are also lowering Uranium to Underweight, from Market Weight.”

Additions to the portfolio were:

* Champion Iron Ltd.

CIA-T +4.45%increase

Firm: “Champion offers investor exposure to growing free cash flow and high quality iron ore production in a stable jurisdiction. As the recently approved Phase 2 expansion to double production at the company’s flagship Bloom Lake mine is developed and derisked we expect Champion shares to re-rate. We also expect Champion to benefit from the current strong iron ore prices and estimate the company can generate $105-million in FCF [free cash flow] per quarter at spot prices, while funding the Phase 2 development (annual FCF yield of 14 per cent).

If iron ore prices remain elevated, we could see Champion start to return capital to shareholders within the next 12-months. At spot prices, the shares are trading at 2.1 times calendar 2021 estimated EV/EBITDA compared to the iron ore producers at 4.4 times and the global diversifieds at 3.5 times.”