2025 Results of Operations
LABRADOR IRON ORE ROYALTY CORPORATION
P R E S S R E L E A S E
Toronto, March 11, 2026
2025 RESULTS OF OPERATIONS
Labrador Iron Ore Royalty Corporation (TSX: LIF) announced the results of its operations for the year
ended December 31, 2025.
To the Holders of Common Shares of Labrador Iron Ore Royalty Corporation
The Directors of Labrador Iron Ore Royalty Corporation ("LIORC" or the "Corporation") present the
Annual Report for the year ended December 31, 2025.
88 Years in Labrador West
Labrador Iron Ore Royalty Corporation has been involved in Labrador West for 88 years. Under a
Statutory Agreement with Newfoundland made in 1938, a predecessor company, Labrador Mining and
Exploration Limited (“LM&E”), was granted extensive exploration and mining rights in Labrador West.
LM&E found the iron ore bodies that now constitute the mine operated by Iron Ore Company of
Canada. LM&E received grants of leases and licences under the Statutory Agreement. It also received a
grant of surface rights to establish the town site that became Labrador City. LM&E sublets the leases to
IOC and IOC, with major steel companies as original shareholders, built the infrastructure, mine, railway
and port. Under the sublease, LIORC receives a 7% gross overriding royalty on iron ore products
produced, sold and shipped by IOC.
Financial Performance
In 2025, LIORC’s revenue for the year ended December 31, 2025 was $166.5 million, which was a 20%
decrease over 2024, as royalty revenue was lower due to a decrease in sales volume at IOC and lower
iron ore prices and pellet premiums Net income per share for 2025 was $1.57 per share, which was a
42% decrease over 2024, due to the lower royalty revenue and a 74% decrease in equity earnings in IOC
($15.9 million in 2025 compared to $60.6 million 2024). The decrease in earnings at IOC was due to a
decrease in operating margins as IOC’s fixed cost base was unable to adjust to lower realized prices and
sales volumes. LIORC’s cash flow from operations per share for 2025 was $1.52 per share, which was
52% lower than in 2024, mainly due to lower royalty revenues and IOC’s decision to not pay a dividend
in 2025 due to the decrease in earnings at IOC. In 2024, IOC paid dividends to its shareholders totalling
US$400 million. In 2025, IOC had a year-end net working capital balance of US $245.4 million, compared
to US$172.8 million in 2024.
Iron ore prices weakened in 2025 as global steel demand contracted and seaborne iron ore supply
remained robust. According to the World Steel Association, in 2025 global production of crude steel was
down 2.0% from 2024. Steel production in China, which accounts for 53% of global production, was
down 4.2%, as China’s issues with its property sector persisted. Steel production in the rest of the world
was up 0.6%. On the iron ore supply side, according to Rio Tinto, total seaborne iron ore shipments rose
approximately 2% year over year, driven by the non -major producers, whose shipments rose
approximately 10%, while supply from the major producers (Rio Tinto, BHP, Vale and Fortesque) was flat
in 2025 compared to 2024. With respect to the supply of pellets, Vale ended the year 6.9 million tonnes
below its 2024 total, predominantly as a result of its decision to idle its Sao Luis plant in July. Conversely,
Samarco and LKAB both increased output month -over-month, ending the year with a combined 7.7
million tonnes above their 2024 totals.
IOC sells concentrate for sale (“CFS”) based on the the Platts index for 65% Fe, CFR China (the “65% Fe
index”). All references to tonnes and per tonne prices in this report refer to wet metric tonnes, other
than references to Platts quoted pricing, which refer to dry metric tonnes. Historically, IOC’s wet ore
contains approximately 3% less ore per equivalent volume than dry ore. In 2025, the average price for
the 65% Fe index was US$115 per tonne, a decrease of 7% year over year. In addition to the reduction in
iron ore prices, pellet premiums were lower as steel producers, faced with continuing low profit
margins, substituted high quality pellets with cheaper, lower quality iron feed. The monthly Atlantic
Blast Furnace 65% Fe pellet premium index as quoted by Platts (the “pellet premium”) averaged US$30
per tonne in 2025, a decrease of 24% from 2024.
Rio Tinto disclosed that IOC achieved an average realised price for pellets, FOB Sept -Îles of
approximately US$126 per tonne, a decrease of 13% year over year. Based on sales as reported for the
LIORC Royalty, the overall average price realized by IOC for CFS and pellets, FOB Sept -Îles was
approximately US$109 per tonne in 2025, a decrease of 13% year over year. The decrease in the average
realized price FOB Sept-Îles in 2025 was a result of lower CFS and pellet prices.
Iron Ore Company of Canada Operations
Operations
Total concentrate production in 2025 was 16.9 million tonnes, 2% lower than in 2024. While total mine
material moved increased modestly compared to 2024, concentrate production continued to be
negatively impacted by several operational challenges related to pit health and mine equipment
reliability. The stripping ratio (total waste: total ore) in 2025 was 1.13, compared to 1.00 in 2024. IOC
made progress in the first three quarters of 2025 in improving pit health, with total mine material
moved increasing 19% over the same period in 2024, driven by higher truck payloads and increased
contractor material movement. However, in the fourth quarter of 2025, total mine material moved
decreased by 34%, as performance was negatively impacted by reduced haul truck availability due to
multiple truck chassis failures and subsequent inspection and repair work. In the fourth quarter,
concentrate production was 3.8 million tonnes, 22% lower than in the fourth quarter of 2024, primarily
due to constrained ore availability and lower ore feed to the concentrator.
The IOC saleable production (CFS plus pellets) of 15.9 million tonnes in 2025 was 1% lower than 2024
and was 4% lower than the low end of the range of Rio Tinto’s original annual guidance of 16.5 to 19.4
million tonnes, due to the decrease in concentrate production referred to above. Saleable production in
the fourth quarter of 3.7 million tonnes was 14% lower than the fourth quarter of 2024, as production
was constrained by ore shortages and failures caused by asset reliability issues. In 2025, CFS production
of 6.6 million tonnes was 3% lower than 2024, and pellet production in 2025 of 9.4 million tonnes was
consistent with the level recorded in 2024.
Third party iron ore haulage by the Québec North Shore and Labrador Railway Company, Inc. (“QNS&L”)
of 21.9 million tonnes in 2025 was 13% higher than in 2024, despite a train derailment that temporarily
stopped haulage during the last 3 days of December. The increase in haulage was driven by continued
operational improvements to meet increasing third-party demand.
Sales as Reported for the LIORC Royalty
Total iron ore sales tonnage by IOC (CFS plus pellets) of 15.7 million tonnes in 2025 was 7% lower than
the total sales tonnage in 2024, as a result of lower saleable production in 2025 and an increase in sales
in 2024 from IOC drawing down inventory at Labrador City.
Capital Expenditures
Capital expenditures for IOC were US$303 million in 2025, or 19% lower than in 2024. Capital
expenditures in 2025 were 11% lower than the US$342 million that IOC had originally forecasted, mainly
due to project timing, including planned track and culvert replacements and the deferment of
locomotive purchases.
Outlook
Rio Tinto’s 2026 guidance for IOC’s saleable production tonnage is 15.0 million to 18.0 million tonnes.
This compares to 15.9 million tonnes of saleable production in 2025. It is expected that IOC will continue
to focus on maximizing pellet production in 2026.
The capital expenditures for 2026 at IOC are forecasted by IOC to be approximately US$290 million. The
2026 forecast includes approximately US$210 of sustaining capital projects, US$53 million of growth and
development projects and US$27 million of deferred stripping. Significant sustaining capital expenditure
projects includes the QNS&L track and culvert replacement programs. Significant development capital
expenditure projects include the purchase of diesel production drills, and the replacement of the
dumper cages at Sept-Îles, which is expected to occur in the second quarter of 2026.
Rio Tinto, as operator, recognizes that IOC is currently facing significant challenges related to pit health
and asset reliability. In 2025, Rio Tinto announced a series of changes aimed at strengthening
operational performance across its global portfolio. Within iron ore, Rio Tinto simplified its product
group structure by integrating IOC with its Western Australian Iron Ore operations and the Simandou
project in Guinea. Previously, IOC operated as part of Rio Tinto’s minerals division and was managed
separately from the company’s other iron ore assets. Under the new structure, IOC’s senior leadership
has greater access to Rio Tinto’s iron ore safety best practices, technical expertise, operational
experience, and advanced technologies from across the broader portfolio.
Significant changes have also been made to IOC’s senior operating team. There has been a meaningful
change in senior operational roles filled by experienced Rio Tinto leaders with Western Australian iron
ore backgrounds, strengthening operational capability and alignment with Rio Tinto’s iron ore
standards. The IOC senior leadership team recognizes that multi-year improvements are required before
achieving nameplate capacity of approximately 23 million tonnes becomes a realistic objective. As a
result, Rio Tinto has identified a more reasonable mid -term production capacity target of approximately
20 million tonnes, reflecting the time and investment needed to sustainably improve performance.
The outlook for iron ore pricing, while uncertain, continues to demonstrate notable resilience. While
ongoing economic challenges in China continue to weigh on steel demand, t he World Steel Association
is forecasting a modest 1.3% rebound in global steel demand for 2026, driven by growth from India and
other emerging economies. On the supply side, the steep fourth -quartile cost curve provides structural
price support, and while the ramp -up of Simandou is expected to place near -term pressure on prices,
depletion at several existing operations over the medium term is anticipated to more than offset this
incremental supply.
Thus far in 2026 (January and February), the average price of the 65% Fe index has been approximately
US$119 per tonne, compared to an annual average of US$115 per tonne in 2025. Pellet demand has also
remained challenging, as steel producer margins continue to be compressed. In the first two months of
2026, the average pellet premium has been approximately US$24 per tonne, compared to an annual
average of US$30 per tonne in 2025 and US$40 per tonne in 2024.
I would like to take this opportunity to thank our Shareholders for their interest and support and my
fellow Directors for their guidance.
Respectfully submitted on behalf of the Directors of the Corporation,
John F. Tuer
President and Chief Executive Officer
March 11, 2026
Corporate Structure
LIORC is a Canadian corporation formed to give effect to the conversion of the Labrador Iron Ore Royalty
Income Fund (the “Fund”) into a corporation under a plan of arrangement completed on July 1, 2010.
LIORC is also the successor by amalgamation of a predecessor of LIORC with Labrador Mining Company
Limited, formerly a wholly -owned subsidiary of the Fund, that occurred pursuant to the plan of
arrangement.
LIORC, directly and through its wholly-owned subsidiary Hollinger-Hanna, holds a 15.10% equity interest
in IOC and receives a 7% gross overriding royalty on all iron ore products produced, sold and shipped by
IOC and a 10 cent per tonne commission on all iron ore products produced and sold by IOC. Generally,
LIORC pays cash dividends from the free cash flow generated from IOC to the maximum extent possible,
subject to the maintenance of appropriate levels of working capital. Quarterly dividends are payable to
all shareholders of record on the last business day of each calendar quarter and are paid on or after the
26th day of the following month.
Seven Directors are responsible for the governance of the Corporation and also serve as directors of
Hollinger-Hanna. The Directors, in addition to managing the affairs of the Corporation and Hollinger -
Hanna, oversee the Corporation’s interests in IOC. The Audit and Governance and Human Resources
Committees are composed of four independent Directors.
Taxation
The Corporation is a taxable corporation. Dividend income received from IOC and Hollinger -Hanna is
received tax free while royalty income is subject to income tax and Newfoundland and Labrador royalty
tax. Expenses of the Corporation include administrative expenses. Hollinger -Hanna is a taxable
corporation.
Income Taxes
Dividends to a shareholder that are paid within a particular year are to be included in the calculation of
the shareholder’s taxable income for that year. All dividends paid in 2025 were “eligible dividends”
under the Income Tax Act.
Review of Operations
Iron Ore Company of Canada
The income of the Corporation is entirely dependent on IOC as the only assets of the Corporation and its
subsidiary are related to IOC and its operations. IOC is one of Canada’s largest iron ore producers,
operating a mine, concentrator and pellet plant at Labrador City, Newfoundland and Labrador, and is
among the top five producers of seaborne iron ore pellets in the world. It has been producing and
processing iron ore concentrate and pellets since 1954. IOC is strategically situated to serve markets
throughout the world from its year-round port facilities at Sept-Îles, Québec.
As at December 31, 2025 the IOC estimated Proven and Probable Reserves, using the London Stock
Exchange resource and reserve standards, totalled 923 million tonnes which, at the planned processing
rates, is equivalent to approximately 19 years production. In addition, IOC has an estimated Measured
and Indicated Resources of 829 million tonnes and a further 662 million tonnes of Inferred Resources. It
currently has the nominal capacity to extract around 55 million tonnes of crude ore annually. The crude
ore is processed into iron ore concentrate and then either sold or converted into different qualities of
iron ore pellets to meet its customers’ needs. The iron ore concentrate and pellets are transported to
IOC’s port facilities at Sept-Îles, Québec via its wholly-owned QNS&L, a 418 kilometer rail line which links
the mine and the port. From there, the products are shipped to markets throughout North America,
Europe, the Middle East and the Asia-Pacific region.
IOC’s 2025 sales tonnages totaled 15.7 million tonnes, comprised of 9.5 million tonnes of iron ore pellets
and 6.2 million tonnes of CFS. Saleable production in 2025 was 9.4 million tonnes of pellets and 6.5
million tonnes of CFS. IOC generated ore sales revenues (excluding third party ore sales) of $2,357
million in 2024 (2024 - $2,751 million).
Selected IOC Financial Information
2025 2024 2023 2022 2021
($ in millions)
Operating Revenues(1) 2,672 3,061 3,122 3,426 4,147
Cash Flow from Operating
Activities
483
808
788
1,021
1,955
Net Income 112 409 568 1,028 1,551
Capital Expenditures(2) 303 376 366 460 498
(1) Ore sales revenue is presented on a net basis (net of related freight costs) to align with IFRS financial statements presenta tion.
(2) Reported in USD on an incurred basis.
IOC Royalty
The Corporation holds certain leases and licenses covering approximately 18,200 hectares of land near
Labrador City. IOC has subleased certain portions of these lands from which it currently mines iron ore.
In return, IOC pays the Corporation a 7% gross overriding royalty on all sales of iron ore products
produced from these lands. A 20% tax on the royalty is payable to the Government of Newfoundland
and Labrador. The average royalty net of the 20% tax had been $178.1 million for the years 2020 to
2024 and in 2025 the net royalty was $131.5 million (2024 - $164.7 million).
Because the royalty is “off -the-top”, it is not dependent on the profitability of IOC. However, it is
affected by changes in sales volumes, iron ore prices and, because iron ore prices are denominated in US
dollars, the United States - Canadian dollar exchange rate.
IOC Equity
In addition to the royalty interest, the Corporation directly and through its wholly owned subsidiary,
Hollinger-Hanna, owns a 15.10% equity interest in IOC. The other shareholders of IOC are Rio Tinto
Limited with 58.72% and Mitsubishi Corporation with 26.18%.
IOC Commissions
Hollinger-Hanna has the right to receive a payment of 10 cents per tonne on the products produced and
sold by IOC. Pursuant to an agreement, IOC is obligated to make the payment to Hollinger-Hanna so long
as Hollinger-Hanna is in existence and solvent. In 2025, Hollinger -Hanna received a total of $1.5 million
in commissions from IOC (2024 - $1.7 million).
Quarterly Dividends
Dividends of $1.55 per share were declared in 2025 (2024 - dividends of $3.00 per share). These
dividends were allocated as follows:
Period
Record
Payment
Dividend
Total
Dividend
Ended Date Date per Share ($ millions)
Mar. 31, 2025 Mar. 31, 2025 Apr. 30, 2025 $0.50 $32.0
Jun. 30, 2025 Jun. 30, 2025 Jul. 30, 2025 0.30 19.2
Sep. 30, 2025 Sep. 29, 2025 Oct. 29, 2025 0.40 25.6
Dec. 31, 2025 Dec. 31, 2025 Jan. 28, 2026 0.35 22.4
Dividend to Shareholders - 2025 $1.55 $99.2
Mar. 31, 2024 Mar. 28, 2024 Apr. 26, 2024 $0.45 $28.8
Jun. 30, 2024 Jun. 28, 2024 Jul. 26, 2024 1.10 70.4
Sep. 30, 2024 Sep. 27, 2024 Oct. 28, 2024 0.70 44.8
Dec. 31, 2024 Dec. 31, 2024 Jan. 29, 2025 0.75 48.0
Dividend to Shareholders - 2024 $3.00 $192.0
The quarterly dividends are payable to all shareholders of record on the last business day of each
calendar quarter and are paid on or after the 26th day of the following month.
Management’s Discussion and Analysis
The following is a discussion of the consolidated financial condition and results of operations of
the Corporation for the years ended December 31, 2025 and 2024. This discussion should be
read in conjunction with the consolidated financial statements of the Corporation and notes
thereto for the years ended December 31, 2025 and 2024 which are prepared in accordance
with IFRS Accounting Standards (“IFRS”) as issued by the International Accounting Standards
Board (“IASB”) and all amounts are shown in Canadian dollars unless otherwise indicated.
Overview of the Business
The Corporation is a Canadian corporation resulting from the conversion of the Fund into a
corporation under a plan of arrangement completed on July 1, 2010. LIORC is also the successor
by amalgamation of a predecessor of LIORC with Labrador Mining Company Limited, formerly a
wholly-owned subsidiary of the Fund, that occurred pursuant to the plan of arrangement.
The Corporation is economically dependent on the operations of IOC. IOC’s earnings and cash
flows are affected by the volume and mix of iron ore products produced and sold, costs of
production and the prices received. Iron ore demand and prices fluctuate and are affected by
numerous factors which include demand for steel and steel products, the relative exchange rate
of the US dollar, global and regional demand and production, political and economic conditions
and production costs in major producing areas.
Financial Highlights
Financial and Operating Highlights
2025 2024 2025 2024
Revenue 39.5 56.9 166.5 209.0
Equity earnings from IOC 1.7 (1.9) 15.9 60.6
Net income 22.3 31.9 100.6 175.0
Net income per share $ 0.35 $ 0.51 $ 1.57 $ 2.73
Dividend from IOC - 21.8 - 83.6
Cash flow from operations 22.0 46.8 97.1 201.9
Cash flow from operations per share (1) $ 0.34 $ 0.73 $ 1.52 $ 3.15
Adjusted cash flow (1) 21.7 53.1 91.5 199.0
Adjusted cash flow per share (1) $ 0.34 $ 0.83 $ 1.43 $ 3.11
Dividends declared per share $ 0.35 $ 0.75 $ 1.55 $ 3.00
(1) This is a non-IFRS financial measure and does not have a standard meaning under IFRS.
Please refer to Standardized Cash Flow and Adjusted Cash Flow section in the MD&A.
($ in millions except per share information)
Year Ended
December 31,
Three Months Ended
December 31,
The lower revenue achieved in 2025 as compared to 2024 was mainly due to a decrease in sales
volume at IOC and lower iron ore prices and pellet premiums The IOC saleable production in
2025 was 2% lower than 2024 due to several operational challenges related to pit health and
mine equipment reliability that constrained ore availability and reduced ore feed to the
concentrator. Total sales tonnage (pellets and CFS) at IOC was 7% lower in 2025 than 2024 ,
predominantly as a result of lower saleable production and timing differences resulting from
transportation and shipping schedules. Iron ore prices were lower as global demand for steel
decreased and total seaborne iron ore shipments increased. Pellet premiums were lower as low
profit margins caused steel producers to favour cheaper, low quality iron ore over high quality
iron ore products.
Net income per share for 2025 was 42% lower than 2024, as equity earnings in IOC were 74%
lower than in 2024 due to lower profitability at IOC. Cash flow from operations for 2025 was
52% lower than in 2024, mainly due to lower royalty revenues and IOC’s decision not to pay a
dividend in 2025 due to the decrease in earnings at IOC.
Fourth quarter 2025 sales tonnage (pellets and CFS) was lower year -over-year by 9% due to
lower saleable production resulting in lower inventory availability. Royalty revenue was $39.1
million for the quarter as compared to $56.1 million for the same period in 2024. Fourth quarter
2025 cash flow from operations was $22.0 million or $0.34 per share compared to fourth
quarter 2024 cash flow from operations of $46.8 million or $0.73 per share. LIORC received no
IOC dividend in the fourth quarter of 2025 (2024 - $21.7 million or $0.34 per share). Equity
earnings from IOC amounted to $1.7 million or $0.03 per share in the fourth quarter of 2025
compared to equity losses of $1.9 million or $0.03 per share for the same period in 2024.