Labrador Iron ORE Royalty Corporation - Results FOR the Third Quarter Ended
PRESS RELEASE
Toronto, November 5, 2025
LABRADOR IRON ORE ROYALTY CORPORATION - RESULTS FOR THE THIRD QUARTER ENDED SEPTEMBER 30,
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 third quarter report
for the period ended September 30, 2025.
Financial Performance
In the third quarter of 2025, LIORC’s financial results were negatively affected by lower concentrate for sale (“CFS”) sales
tonnages and lower pellet premiums, offset by higher iron ore prices and increased pellet sales volumes. Royalty revenue
for the third quarter of 2025 was $43.4 million representing a 5% increase over the third quarter of 2024 and a 6%
decrease from the second quarter of 2025. Equity earnings from Iron Ore Company of Canada (“IOC”) totaled $8.6 million
in the third quarter of 2025 compared to $9.7 million in the third quarter of 2024 and $2.3 million in the second quarter
of 2025. Net income per share for the third quarter of 2025 was $0.47 per share, which was an 11% decrease from the
same period in 2024 and a 12% increase from the second quarter of 2025. The adjusted cash flow per share for the third
quarter of 2025 was $0.38 per share, which was 44% lower than in the same period in 2024 and 5% lower than the second
quarter of 2025. The significant decrease in adjusted cashflow per share primarily reflects that LIORC received no dividend
from IOC in the third quarter of 2025, compared to a dividend from IOC of $20.3 million in the third quarter of 2024. While
adjusted cash flow is not a measure recognized under IFRS Accounting Standards, the Directors believe it provides a useful
analytical indicator of cash available for distribution to shareholders.
While iron ore prices saw some improvement during the third quarter of 2025, average prices for the first three quarters
of 2025 remained lower compared to the first three quarters of 2024. Global steel demand remained weak as a result of
a more difficult global trading environment, and on -going concerns regarding China’s housing sector. According to the
World Steel Association, global crude steel production was down 1% in the third quarter of 2025 compared to the third
quarter of 2024, and down 1% for the first three quarters of 2025 relative to the same period in 2024. Steel demand in
China declined by 3% in the third quarter compared to the same period in 2024. On the supply side, iron ore production
remained robust. Combined production from the world’s three largest seaborne producers (Rio Tinto, Vale and BHP)
increased by 1% for the quarter ended September 30, 2025, compared to the same quarter of 2024, led by Vale’s 4%
increase in production. For the three quarters ending September 30, 2025, total production from Rio Tinto, BHP and Vale
rose 1% compared to the same period in 2024.
Pellet premiums continued to decline in the third quarter of 2025. Demand trends for pellets continued to diverge across
markets. In the Blast Furnace segment, steel demand remained sluggish due to seasonal softness, and lower steel margins
continued to prompt producers to substitute higher-quality pellets with less expensive lower-quality iron ore. In contrast,
the Direct Reduction (“DR”) market in Middle East and North Africa showed stable consumption, supported by
infrastructure and construction activity. In the U.S., import constraints under prevailing tariff policies contributed to
higher domestic crude steel production. However, despite this, U.S. steel prices were lower and DR pellet imports have
remained below typical levels during the third quarter. On the supply side, Vale’s pellet shipments declined in the quarter
following the idling of its Sao Luis plant in July. While this reduction was expected to tighten the market, increased
production from Samarco and LKAB partially offset the shortfall.
IOC sells CFS based on the Platts index for 65% Fe, CFR China (“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 the third
quarter of 2025, the 65% Fe index averaged US$117 per tonne, an 8% increase over the prior quarter and a 3% increase
over the average of US$114 per tonne in the third quarter of 2024. However, longer term, the 65% Fe Index averaged
US$114 per tonne over the first three quarters of 2025, or 9% lower than the average for the same period in 2024. The
monthly Atlantic Blast Furnace 65% Fe pellet premium index as quoted by Platts (the “pellet premium”), averaged US$27
per tonne in the third quarter of 2025, down 32% from an average of US$39 per tonne in the same quarter of 2024.
Based on sales as reported for the LIORC royalty, the overall average price realized by IOC for CFS and pellets, FOB Sept -
Îles, net of freight charges, was approximately US$114 per tonne in the third quarter of 2025, compared to approximately
US$109 per tonne in the third quarter of 2024. This increase was primarily due to the pricing changes referred to above,
as well as an improved product mix (more pellets and less CFS).
Iron Ore Company of Canada Operations
Operations
IOC concentrate production in the third quarter of 2025 totaled 4.4 million tonnes, 15% higher than the same quarter of
2024, (mainly reflecting the 11-day site -wide shutdown following forest fires in the third quarter of 2024) and 1% lower
than the second quarter of 2025. Total mine material moved in the third quarter of 2025 increased 4% over the same
quarter last year but was 7% lower than the prior quarter due to lower haul truck availability and higher cycle times. While
concentrate production in the third quarter of 2025 continued to be negatively impacted by lower ground tonnes resulting
from upstream ore availability and ore delivery system performance, these impacts were mostly offset by a higher weight
yield.
IOC saleable production (CFS plus pellets) was 4.0 million tonnes in the third quarter of 2025, 11% higher than the same
quarter of 2024 and 6% lower than the second quarter of 2025. Pellet production of 2.4 million tonnes was 11% higher
than the corresponding quarter in 2024 ( primarily due to the site -wide shutdown in the third quarter of 2024) , and 8%
higher than the second quarter of 2025, reflecting refractory repairs carried out on induration machines in the second
quarter of 2024. CFS production of 1.6 million tonnes was 11% higher than the same quarter of 2024 mainly due to the
higher concentrate output noted above.
Sales as Reported for the LIORC Royalty
Total iron ore sales tonnage (CFS plus pellets) by IOC was 3.9 million tonnes in the third quarter of 2025, 3% lower than
in the same quarter of 2024 and 16% lower than in the second quarter of 2025. The decrease in IOC sales tonnage was
primarily due to i nventory availability and vessel scheduling. Pellet sales tonnages increased 8% compared to the same
quarter of 2024 and 11% lower than the second quarter of 2025. CFS sales tonnages were 13% lower than the same
quarter of 2024 and 21% lower than the second quarter of 2025.
Outlook
In its second quarter production report, Rio Tinto disclosed that the 2025 guidance for IOC’s saleable production (CFS plus
pellets) is expected to be at the low end of its original guidance of 16.5 million to 19.4 million tonnes. This compares to
16.1 mil lion tonnes of saleable production in 2024 (which experienced the 11 -day shutdown noted above), and 12.2
million tonnes produced in the first nine months of 2025. IOC has revised its outlook for capital expenditures in 2025. IOC
is now forecasting that its 2025 capital expenditure will be US$288 million, down from the originally budgeted US$342
million. To date, IOC’s capital expenditures are on track with the updated forecast.
Operationally, Rio Tinto, the operator of IOC, has implemented several changes to leverage Rio Tinto’s mining expertise
and strengthen IOC’s operations. In connection with these changes, IOC is also focussed on continuing to improve the pit
health of its mining operations. This will require increased stripping in the coming years, which could impact the level of
future IOC dividends to LIORC. On October 29, Rio Tinto announced a management restructuring that resulted in IOC,
together with Simandou, falling under the leadership of Elias Scafidas, Managing Director – International Operations. This
change reflects Rio Tinto’s commitment to simplify how they operate and further strengthen collaboration across its
organization.
Since the end of the third quarter, iron ore prices have remained relatively stable, while pellet premiums have continued
to decline. In October 2025, the 65% Fe index averaged US$119 per tonne and the October pellet premium was US$25
per tonne. Longer term the outlook for iron ore prices remains challenging. The World Steel Association has stated that,
despite a considerable escalation of the global trade war and inherent uncertainties, it is cautiously optimistic that global
steel demand will stabilize in 2025 (0% increase) and show moderate growth in 2026 (1.3% increase). However, it
acknowledged that these projections depend on, among other things, the long-awaited return of steel demand growth in
Europe and the moderation of the decline in China’s steel demand as its housing market stabilizes. On the supply side,
while Vale’s São Luís plant is expected to remain idled through fourth quarter, longer-term a surplus of seaborne iron ore
is anticipated, most significantly due to increased Brazilian exports and the start-up of Simandou.
LIORC remains debt-free and as of September 30, 2025 had positive net working capital (current assets less current
liabilities) of $27 million, which included the third quarter net royalty payment received from IOC on October 25, 2025
and the LIORC dividend in the amount of $0.40 per share paid to shareholders on October 29, 2025.
Respectfully submitted on behalf of the Directors of the Corporation,
John F. Tuer
President and Chief Executive Officer
November 5, 2025
Management’s Discussion and Analysis
The following discussion and analysis should be read in conjunction with the Management’s Discussion and Analysis
section of Labrador Iron Ore Royalty Corporation’s (“LIORC” or the “Corporation”) 2024 Annual Report, and the financial
statements and notes c ontained therein and the September 30, 2025 interim condensed consolidated financial
statements.
Overview of the Business
The Corporation’s revenues are entirely dependent on the operations of IOC as its principal assets relate to the operations
of IOC and its principal source of revenue is the 7% royalty it receives on all sales of iron ore products by IOC. In additio n
to the volume of iron ore sold, the Corporation’s royalty revenue is affected by the price of iron ore and the Canadian –
U.S. dollar exchange rate. The first quarter sales of IOC are traditionally adversely affected by the general winter operating
conditions and are usually 15% – 20% of the annual volume, with the balance spread fairly evenly throughout the other
three quarters. Because of the size of individual shipments, some quarters may be affected by the timing of the loading
of ships that can be delayed from one quarter to the next.
Financial Highlights
The higher revenue achieved in the third quarter of 2025 compared to the third quarter of 2024 was primarily driven by
higher iron ore prices and an improved product mix (more pellets and less CFS), partly offset by lower sales tonnages and
declining pellet premiums. This resulted in royalty revenue of $43.5 million for the quarter, compared to $41.5 million for
the same period in 2024. Total sales tonnages (CFS plus pellets) in the third quarter of 2025 were 3% lower, than the
same quarter of 2024, mainly due to inventory availability and vessel scheduling. CFS sales tonnages declined 13%, while
pellet sales tonnages increased 8%.
Net income and equity earnings from IOC were lower in the third quarter of 2025 as compared to the third quarter of
2024 reflecting reduced profitability at IOC. Equity earnings from IOC amounted to $8.6 million or $0.13 per share in the
third quarter in 2025 compared to $9.7 million or $0.15 per share for the same period in 2024. Cash flow from operations
in the third quarter of 2025 was $32.7 million, or $0.51 per share, compared to $43.0 million, or $0.67 per share, for the
same period in 2024. LIORC received no IOC dividend in the third quarter of 2025 compared to $20.3 million, or $0.32 per
share, for the same period in 2024.
2025 2024 2025 2024
Revenue 44.0 42.3 126.9 152.1
Equity earnings from IOC 8.6 9.7 14.1 62.6
Net income 30.4 33.6 78.4 143.1
Net income per share $ 0.47 $ 0.53 $ 1.22 $ 2.24
Dividend from IOC - 20.3 - 61.8
Cash flow from operations 32.7 43.0 75.2 155.1
Cash flow from operations per share (1) $ 0.51 $ 0.67 $ 1.18 $ 2.42
Adjusted cash flow (1) 24.2 43.6 69.8 145.8
Adjusted cash flow per share (1) $ 0.38 $ 0.68 $ 1.09 $ 2.28
Dividends declared per share $ 0.40 $ 0.70 $ 1.20 $ 2.25
(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.
Nine Months Ended
September 30,
Three Months Ended
September 30,
($ in millions except per share information)
Operating Highlights
IOC sells CFS based on the 65% Fe index. In the third quarter of 2025, the 65% Fe index averaged US$117 per tonne, a
3% increase over the average of US$114 per tonne in the third quarter of 2024. Despite this modest improvement in iron
ore prices in the quarter, global steel demand remained weak due to a challenging global trading environment, and on -
going concerns regarding China’s housing sector. On the supply side, production remained robust, with combined iron
ore production from the world’s three largest seaborne producers (Rio Tinto, Vale and BHP) rising by 1% in the quarter
ended September 30, 2025, compared to the same quarter of 2024. The monthly pellet premium averaged US$27 per
tonne in the third quarter of 2025, down 32% from an average of US$39 per tonne in the same quarter of 2024, as lower
steel margins continued to prompt steel producers to substitute higher -quality pellets with less expensive lower -quality
iron ore.
Based on sales as reported for the LIORC royalty, the overall average price realized by IOC for CFS and pellets, FOB Sept -
Îles, net of freight charges was approximately US$114 per tonne in the third quarter of 2025 compared to approximately
US$109 per tonne in the third quarter of 2024. This increase was primarily due to the pricing changes referred to above,
as well as an improved product mix (more pellets and less CFS).
IOC Operations 2025 2024 2025 2024
Sales(1)
Pellets 2.19 2.03 6.81 7.01
Concentrate for sale ("CFS") (2) 1.72 1.99 5.00 5.61
Total(3) 3.91 4.02 11.80 12.61
Production
Concentrate produced 4.41 3.83 13.13 12.45
Saleable production
Pellets 2.40 2.17 6.96 6.83
CFS 1.59 1.43 5.22 4.94
Total(3) 4.00 3.60 12.18 11.77
Average index prices per tonne (US$)
65% Fe index(4) $ 117 $ 114 $ 114 $ 125
62% Fe index(5) $ 102 $ 100 $ 101 $ 112
Pellet premium(6) $ 27 $ 39 $ 32 $ 41
(1) For calculating the royalty to LIORC.
(2) Excludes third party ore sales.
(3) Totals may not add up due to rounding.
(4) The Platts index for 65% Fe, CFR China.
(5) The Platts index for 62% Fe, CFR China.
(6) The Platts Atlantic Blast Furnace 65% Fe pellet premium index.
(in millions of tonnes)
Nine Months Ended
September 30,September 30,
Three Months Ended
The following table sets out quarterly revenue, net income, cash flow and dividend data for 2025, 2024 and 2023. Due to
seasonal weather patterns the first and fourth quarters generally have lower production and sales. Royalty revenues and
equity earnings in IOC track iron ore spot prices, which can be very volatile. Dividends, included in cash flow, are declared
and paid by IOC irregularly according to the availability of cash.
Revenue
Net
Income
Net
Income
per
Share
Cash Flow
from
Operations
Cash Flow
from
Operations
per Share
Adjusted
Cash Flow
per Share (1)
Dividends
Declared
per Share
($ in millions except per share information)
2025
First Quarter 36.2
21.4 $0.33 24.7 $0.39 $0.31 $0.50
Second Quarter 46.8
26.5 $0.42 17.7 $0.28 $0.40 $0.30
Third Quarter 44.0
30.4 $0.47 32.7 $0.51 $0.38 $0.40
2024
First Quarter 56.7
59.3 $0.93 30.0 $0.47 $0.49 $0.45
Second Quarter 53.1 50.2 $0.78 82.1(2) $1.28(2) $1.11(2) $1.10
Third Quarter 42.3 33.6 $0.53 43.0(3) $0.67(3) $0.68(3) $0.70
Fourth Quarter 56.9 31.9 $0.50 46.8(4) $0.73(4) $0.83(4) $0.75
2023
First Quarter 47.2
43.6 $0.68 19.5 $0.30 $0.41 $0.50
Second Quarter 51.5 41.9 $0.65 40.9(5) $0.64(5) $0.75(5) $0.65
Third Quarter 47.7 49.4 $0.77 65.7(6) $1.03(6) $0.89(6) $0.95
Fourth Quarter 54.9 51.4 $0.80 26.4 $0.41 $0.47 $0.45
(1) “Adjusted cash flow” (see below).
(2) Includes $41.5 million IOC dividend.
(3) Includes $20.3 million IOC dividend.
(4) Includes $21.8 million IOC dividend.
(5) Includes $19.9 million IOC dividend.
(6) Includes $30.5 million IOC dividend.
Standardized Cash Flow and Adjusted Cash Flow
For the Corporation, standardized cash flow is the same as cash flow from operating activities as recorded in the
Corporation’s cash flow statements as the Corporation does not incur capital expenditures or have any restrictions on
dividends. Standardized cash flow per share was $0.51 for the quarter (2024 - $0.67).
The Corporation also reports “Adjusted cash flow” which is defined as cash flow from operating activities after
adjustments for changes in amounts receivable, accounts payable and income taxes recoverable and payable. It is not a
recognized measure under IFRS. The Directors believe that adjusted cash flow is a useful analytical measure as it better
reflects cash available for dividends to shareholders.
The following reconciles standardized cash flow from operating activities to adjusted cash flow.
3 Months
Ended
Sept. 30, 2025
3 Months
Ended
Sept. 30, 2024
9 Months
Ended
Sept. 30, 2025
9 Months
Ended
Sept. 30, 2024
($ in millions except per share information)
Standardized cash flow from operating activities 32.7 43.0 75.2 155.1
Changes in amounts receivable, accounts payable
and income taxes recoverable and payable
(8.5)
0.6
(5.4)
(9.3)
Adjusted cash flow 24.2 43.6 69.8 145.8
Adjusted cash flow per share $0.38 $0.68 $1.09 $2.28
Liquidity and Capital Resources
The Corporation had $18.3 million in cash as at September 30, 2025 (December 31, 2024 - $42.3 million) with total current
assets of $61.7 million (December 31, 2024 - $95.1 million). The Corporation had working capital of $27.1 million as at
September 30, 2025 (December 31, 2024 - $34.1 million). The Corporation’s operating cash flow was $32.7 million and
the dividend paid during the quarter was $19.2 million, resulting in cash balances increasing by $13.5 million during the
third quarter of 2025.
Cash balances consist of deposits in Canadian dollars with a Canadian chartered bank. Amounts receivable primarily
consist of royalty payments from IOC. Royalty payments are received in U.S. dollars and converted to Canadian dollars on
receipt, usually 25 days after the quarter end. The Corporation does not normally attempt to hedge this short-term foreign
currency exposure.
Operating cash flow of the Corporation is sourced entirely from IOC through the Corporation’s 7% royalty, 10 cents
commission per tonne and dividends from its 15.10% equity interest in IOC. The Corporation normally pays cash dividends
from its free cash flow generated from IOC to the maximum extent possible, subject to the maintenance of appropriate
levels of working capital.
The Corporation has a $30 million revolving credit facility with a term ending September 18, 2026 with provision for
annual one-year extensions. No amount is currently drawn under this facility (2024 – nil) leaving $30.0 million available
to provide for any capital required by IOC or requirements of the Corporation.
Disclosure Controls and Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate disclosure controls and procedures and internal
control over financial reporting as defined in National Instrument 52 -109 - Certification of Disclosure in Issuers’ Annual
and Interim Filings. Internal control, no matter how well designed and operated, can provide only reasonable assurance
of achieving the desired control objectives and due to its inherent limitations, may not prevent or detect all
misrepresentations.
There have been no changes in the Corporation’s internal controls over financial reporting during the three-month period
ended September 30, 2025, that have materially affected, or are reasonably likely to materially affect, the Corporation’s
internal control over financial reporting. For the quarter ended September 30, 2025, the Chief Executive Officer and the
Chief Financial Officer concluded that Labrador Iron Ore Royalty Corporation’s disclosure controls and procedures, and
internal control over financial reporting are designed to provide reasonable assurance regarding the reliability of
information disclosed in its filings, including its interim financial statements prepared in accordance with IFRS.
John F. Tuer
President and Chief Executive Officer
Toronto, Ontario
November 5, 2025
Forward-Looking Statements
This report may contain “forward -looking” statements that involve risks, uncertainties and other factors that may cause the actual results,
performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-
looking statements. Words such as “may”, “will”, “expect”, “believe”, “plan”, “intend”, “should”, “would”, “anticipate” and other similar terminology
are intended to identify forward -looking statements. These statements reflect current assumptions and expectations regarding future events and
operating performance as of the date of this report. Forward -looking statements involve significant risks and uncertainties, should not be read as
guarantees of future performance or results , and will not necessarily be accurate indications of whether or not such results will be achieved. A
number of factors could cause actual results to vary significantly, including iron ore price and volume volatility; the perfo rmance of IOC; market
conditions in the steel industry; fluctuations in the value of the Canadian and U.S. dollar; mining risks that cause a disruption in operations and
availability of insurance; disruption in IOC’s operations caused by natural disasters, severe weather conditions and public health crises, including the
COVID-19 outbreak; failure of information systems or damage from cyber security attacks; adverse changes in domestic and global eco nomic and
political conditions; changes in government regulation and taxation; national , provincial and international laws, regulations and policies regarding
climate change that further limit the emissions of greenhouse gases or increase the costs of operations for IOC or its customers; changes affecting
IOC’s customers; competition from other iron ore producers; renewal of mining licenses and leases; relationships with indigenous groups; litigation;
and uncertainty in the estimates of reserves and resources. A discussion of these factors is contained in LIORC’s annual info rmation form dated
March 11, 2025 under the heading, “Risk Factors”. Although the forward -looking statements contained in this report are based upon what
management of LIORC believes are reasonable assumptions, LIORC cannot assure investors that actual results will be consistent with these forward-
looking statements. These forward-looking statements are made as of the date of this report and LIORC assumes no obligation, except as required
by law, to update any forward-looking statements to reflect new events or circumstances. This report should be viewed in conjunction with LIORC’s
other publicly available filings, copies of which can be obtained electronically on SEDAR+ at www.sedarplus.ca.
Notice:
The following unaudited interim condensed consolidated financial statements of the Corporation have been prepared
by and are the responsibility of the Corporation’s management. The Corporation’s independent auditor has not
reviewed these interim financial statements.