Section1: Company Overview and Fundamental Insights

1.1 Company Overview:

Champion Iron Limited (TSX: CIA) is engaged in the exploration and development of iron ore properties in Quebec, Canada. The company's operating segment includes 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. Kalkine’s Resource Report covers the Investment Highlights, Key Financial Metrics, Risks, Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

1.2 The Key Positives, Negatives, Investment Highlights and Risks

1.3 Top 10 Shareholders:

The top 10 shareholders together form ~38.51% of the total shareholding. Investissement Québec and O'Keeffe (William Michael) hold a maximum stake in the company at ~­­­8.41% and ~8.32%, respectively.

1.4 Key Metrics:

The company reported a decent rise in its production and sales volume in Q2 2024, which lead to growing financial numbers. Moreover, despite the headwinds the company clocked industry beating margins and rising cash flows from operating activities, displaying the resilience of the company.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates: The below picture gives an overview of the company’s recent activities, here the company shared information on lowering its cost of sales and dividend distribution.

2.2 Insights on Q2 2024 Financial Performance:

Section 3: Key Risks, Company Outlook:

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

The stock has witnessed an upside of ~5.10% in 1 week and ~9.71% over the last 1 month. Moreover, the stock is trading below the average of 52-week high price of CAD 7.60 and 52-week low price of CAD 3.99 providing an opportunity to accumulate the stock. Champion Iron Limited (TSX: CIA) was last covered on 15 September 2023.

4.2 Fundamental Valuation

Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is September 26, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined:

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Disclaimer

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