Labrador Iron ORE Royalty Corporation - Results FOR the First Quarter Ended
P R E S S R E L E A S E
Toronto, May 4, 2026
LABRADOR IRON ORE ROYALTY CORPORATION - RESULTS FOR THE FIRST QUARTER ENDED MARCH 31, 2026
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 first quarter report for
the period ended March 31, 2026.
Financial Performance
In the first quarter of 2026, LIORC’s financial results continued to be negatively affected by low concentrate for sale
(“CFS”) and pellet sales volumes. Royalty revenue for the first quarter of 2026 was $35.4 million, comparable to the first
quarter of 2025 and a 9% decrease from the fourth quarter of 2025. Equity (losses) earnings from Iron Ore Company of
Canada (“IOC”) totaled ($6.4) million in the first quarter of 2026 compared to $3.3 million in the first quarter of 2025 and
$1.7 million in the fourth quarter of 2025. Net income per share for the first quarter of 2026 was $0.21 per share, which
was a 36% decrease from the same period in 2025 and a 40% decrease from the fourth quarter of 2025. The adjusted
cash flow per share for the first quarter of 2026 was $0.31 per share, consistent with the same period in 2025 and 9%
lower than the fourth quarter of 2025. 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.
Iron ore prices saw modest improvement during the first quarter of 2026, despite lower global steel production and robust
global seaborne iron ore sales. Global steel production fell as China pivoted from construction-grade output to high-value
specialty products. This decline was worsened by high energy costs and new carbon regulations that squeezed production
margins across Europe. According to the World Steel Association, global steel production was down 2% in the first quarter
of 2026 compared to the first quarter of 2025, and steel production in China declined by 5% in the first quarter compared
to the same period in 2025. On the supply side, iron ore production remained robust. Combined sales from the world’s
three largest seaborne producers (Rio Tinto, Vale , and BHP) increased by 2% for the quarter ended March 31, 2026 ,
compared to the same quarter in the prior year.
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 first
quarter of 2026, the 65% Fe index averaged US$121 per tonne, a 2% increase over the prior quarter and a 3% increase
over the average of US$117 per tonne in the first quarter of 2025. IOC sells blast furnace (“BF”) pellets and direct reduction
(“DR”) pellets based on a premium to the 65% Fe index. In 2026, Platts began publishing a new Atlantic Iron Ore Blast
Furnace Pellet Contract Price Premium based of the 65% Fe index (the “BF pellet premium”) to reflect the higher liquidity
and usage of Atlantic pellet premium contract settlements over the 65% Fe index. The BF pellet premium averaged US$28
per tonne in the first quarter of 2026. The Platts DR pellet premium for 67.5% Fe pellet over 65% Fe index (the “DR pellet
premium”) was US$42, down from an average of US$45 per tonne in the same quarter of 2025.
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$110 per tonne in the first quarter of 2026, comparable with the first
quarter of 2025. The modest increase in iron ore pricing was offset by a modest change in the product mix sold ( fewer
pellets and more CFS).
Iron Ore Company of Canada Operations
Operations
IOC concentrate production in the first quarter of 2026 totaled 3.7 million tonnes, 14% lower than the same quarter of
2025, and 4% lower than the fourth quarter of 2025 . Performance was primarily constrained by reduced haul truck
availability mainly due to structural frame failures identified in the fourth quarter of 2025 , longer than planned cycle
times, and lower payloads. Total mine material moved in the first quarter of 2026 was 26% lower than the same quarter
last year and 4% higher than the prior quarter, which was disproportionately impacted by the haul truck frame failures.
The lower material movement was partially offset by a lower strip ratio, resulting in crude ore in the first quarter being
14% lower than the same quarter last year. The weight yield in the first quarter of 2026, while comparable to the same
quarter last year, continues to be below expectation due to reduced spiral recovery linked to lower crude iron content
caused by sequencing changes and the presence of marginal ore in the system.
IOC saleable production (CFS plus pellets) was 3.4 million tonnes in the first quarter of 2026, 13% lower than the same
quarter of 2025 and 8% lower than the fourth quarter of 2025, mainly due to the lower concentrate production referred
to above. Pellet production of 1.7 million tonnes was 26% lower than the corresponding quarter in 2025 and 28% lower
than the fourth quarter of 2025, mainly due to availability of feed and machine-reliability issues, most notably drive
failures on Machines 4 and 6. CFS production of 1.7 million tonnes was 7% higher than the same quarter of 2025 and 29%
higher than the fourth quarter of 2025 mainly due to the decrease in pellet production.
Sales as Reported for the LIORC Royalty
Total iron ore sales tonnage (CFS plus pellets) by IOC was 3.3 million tonnes in the first quarter of 2026, 1% higher than
in the same quarter of 2025 and 15% lower than in the fourth quarter of 2025. Sales tonnages were affected by inventory
availability and vessel scheduling. Pellet sales tonnages decreased 2% compared to the same quarter of 2025 and 21%
lower than the fourth quarter of 2025. CFS sales tonnages were 8% higher than the same quarter of 2025 and 4% lower
than the fourth quarter of 2025.
Outlook
In its first quarter production report, Rio Tinto disclosed that there was no change to its original 2026 guidance for IOC’s
sales (CFS plus pellets) of 15 million to 18 million tonnes. However, based on the results of the first quarter, LIORC believes
that 2026 sales will more likely be at the low end of this range. This compares to sales of 15.7 million tonnes in 2025.
Operationally, IOC continues to focus on improving the pit health of its mining operations. This will be a multi-year effort
and will result in increased stripping in the coming years, which will negatively impact IOC’s iron ore production levels
and the amount of cashflow available for future IOC dividends to LIORC. As part of its 2026 capital budget, IOC is in the
process of purchasing 6 new haul trucks to help facilitate the removal of increased waste material.
Since the end of the first quarter, iron ore prices and pellet premiums have remained resilient. In April 2026, the 65% Fe
index averaged US$124 per tonne and the April BF pellet premium and DR pellet premium were US$32 per tonne and $43
per tonne, respectively. The World Steel Association expects global steel demand to bottom out in 2025–2026, followed
by a modest 0.3% growth rate in 2026 and an improved 2.2% growth rate in 2027. This recovery is supported by stabilizing
demand in China, vibrant growth in India, and a meaningful turnaround across all major developed economies. Excluding
China, global demand is forecast to hit a 4.0% growth rate in 2027 as the industry tran sitions toward more pronounced
acceleration. Despite this positive turnaround, the ongoing conflict in the Middle East is expected to cause a sharp regional
drop in 2026 and poses a significant stress test to the overall outlook.
LIORC remains debt-free and as of March 31, 2026 had positive net working capital (current assets less current liabilities)
of $27 million, which included the first quarter net royalty payment received from IOC on April 25, 2026 and the LIORC
dividend in the amount of $0.30 per share paid to shareholders on April 29, 2026.
Respectfully submitted on behalf of the Directors of the Corporation,
John F. Tuer
President and Chief Executive Officer
May 4, 2026
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”) 2025 Annual Report, and the financial
statements and notes contained therein and the March 31, 2026 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
In the first quarter of 20 26, LIORC’s financial results continued to be negatively affected by low CFS and pellet sales
volumes. This resulted in royalty revenue of $35.4 million for the quarter, compared to $35.6 million for the same period
in 2025. Total sales tonnages (CFS plus pellets) in the first quarter of 2026 were 1% higher, than the same quarter of
2026 2025
Revenue 35.9 36.2
Equity (losses) earnings from IOC (6.4) 3.3
Net income 13.2 21.4
Net income per share $ 0.21 $ 0.33
Cash flow from operations 23.1 24.7
Cash flow from operations per share (1) $ 0.36 $ 0.39
Adjusted cash flow (1) 19.7 19.8
Adjusted cash flow per share (1) $ 0.31 $ 0.31
Dividends declared per share $ 0.30 $ 0.50
(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.
Three Months Ended
March 31,
($ in millions except per share information)
2025. Sales volumes in both quarters were negatively impacted by reduced volumes of saleable production due to issues
at the mine, specifically reduced haul truck availability , longer than planned cycle times, and lower payloads . CFS sales
tonnages increased 8%, while pellet sales tonnages decreased 2%.
Net income and equity earnings from IOC were lower in the first quarter of 2026 as compared to the first quarter of 2025
reflecting reduced profitability at IOC. Equity (losses) earnings from IOC amounted to ($6.4) million or ($0.10) per share
in the first quarter in 2026 compared to $3.3 million or $0. 05 per share for the same period in 2025. Cash flow from
operations in the first quarter of 2026 was $23.1 million, or $0.36 per share, compared to $ 24.7 million, or $0.39 per
share, for the same period in 2025. LIORC received no IOC dividend in the first quarter of 2026 or in the first quarter of
2025.
Operating Highlights
IOC sells CFS based on the 65% Fe index. In the first quarter of 2026, the 65% Fe index averaged US$121 per tonne, a 2%
increase over the prior quarter and a 3% increase over the average of US$117 per tonne in the first quarter of 2025 .
Despite the modest improvement during the first quarter of 2026, global steel production fell as China pivoted from
construction-grade output to high -value specialty products. This decline was worsened by high energy costs and new
carbon regulations that squeezed production margins across Europe. On the supply side, iron ore production remained
IOC Operations 2026 2025
Sales(1)
Pellets 2.11 2.15
Concentrate for sale ("CFS") (2) 1.19 1.10
Total(3) 3.30 3.25
Production
Concentrate produced 3.66 4.25
Saleable production
Pellets 1.72 2.33
CFS 1.72 1.61
Total(3) 3.44 3.95
Average index prices per tonne (US$)
65% Fe index(4) $ 121 $ 117
BF pellet premium $ 28(5) $ 35(6)
DR pellet premium (7) $ 42 $ 45
(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 Atlantic Blast Furnace pellet premium (65% Fe fines basis).
(6) The Platts index for Atlantic Blast Furnace pellet premium (IODEX basis).
(7) The Platts index for Direct Reduction 67.5% Fe pellet premium (65% Fe fines basis).
(in millions of tonnes)
March 31,
Three Months Ended
robust, with combined sales from the world’s three largest seaborne producers (Rio Tinto, Vale , and BHP) increasing by
2% for the quarter ended March 31, 2026, compared to the same quarter in the prior year.
Pellet premiums remained soft during the first quarter of 2026, as steel producers prioritized cost-saving measures over
the efficiency gains typically associated with high -grade feedstocks. IOC sells BF and DR pellets based on a premium to
the 65% Fe index. The BF pellet premium averaged US$28 per tonne in the first quarter of 2026. The DR pellet premium
was US$42, down from an average of US$45 per tonne in the same quarter of 2025.
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$110 per tonne in the first quarter of 2026, comparable with the first
quarter of 2025. The modest increase in iron ore pricing was offset by a modest change in the product mix sold ( fewer
pellets and more CFS).
The following table sets out quarterly revenue, net income, cash flow and dividend data for 2026, 2025 and 2024. Due to
seasonal weather patterns the first and fourth quarters generally have lower production and sales. Royalty revenues and
equity earnings in IOC track iron ore spot prices, which can be very volatile. Dividends, included in cash flow, are declared
and paid by IOC irregularly according to the availability of cash.
Revenue
Net
Income
Net
Income
per Share
Cash Flow
from
Operations
Cash Flow
from
Operations
per Share
Adjusted Cash
Flow per Share
(1)
Dividends
Declared
per Share
($ in millions except per share information)
2026
First Quarter 35.9
13.2 $0.21 23.1 $0.36 $0.31 $0.30
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
Fourth Quarter 39.5 22.3 $0.35 22.0 $0.34 $0.34 $0.35
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
(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.
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 $0.36 for the quarter (2025 - $0.39).
The Corporation also reports “Adjusted cash flow” which is defined as cash flow from operating activities after
adjustments for changes in amounts receivable, accounts payable and income taxes recoverable and payable. It is not a
recognized measure under IFRS. The Directors believe that adjusted cash flow is a useful analytical measure as it better
reflects cash available for dividends to shareholders.
The following reconciles standardized cash flow from operating activities to adjusted cash flow.
3 Months Ended
Mar. 31, 2026
3 Months Ended
Mar. 31, 2025
($ in millions except per share information)
Standardized cash flow from operating activities 23.1 24.7
Changes in amounts receivable, accounts payable
and income taxes recoverable and payable
(3.4)
(4.9)
Adjusted cash flow 19.7 19.8
Adjusted cash flow per share $0.31 $0.31
Liquidity and Capital Resources
The Corporation had $ 15.3 million in cash as at March 31, 2026 (December 31, 2025 - $14.6 million) with total current
assets of $ 53.5 million (December 31, 202 5 - $57.7 million). The Corporation had working capital of $ 26.9 million as at
March 31, 2026 (December 31, 202 5 - $26.4 million). The Corporation’s operating cash flow was $ 23.1 million and the
dividend paid during the quarter was $ 22.4 million, resulting in cash balances increasing by $0.7 million during the first
quarter of 2026.
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 (202 5 – 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 March 31 , 202 6, that have materially affected, or are reasonably likely to materially affect, the Corporation’s
internal control over financial reporting. For the quarter ended March 31, 2026, 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 repor ting 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
May 4, 2026
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 an d public health crises, failure of
information systems or damage from cyber security attacks; adverse changes in domestic and global economic and political cond itions; 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 information form dated March 11, 2026 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 f orward-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.
LABRADOR IRON ORE ROYALTY CORPORATION
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
March 31, December 31,
(in thousands of Canadian dollars) 2026 2025
Assets
Current Assets
Cash 15,295$ 14,568$
Amounts receivable 35,911 42,158
Income taxes recoverable 2,327 984
Total Current Assets 53,533 57,710
Non-Current Assets
Iron Ore Company of Canada ("IOC")
royalty and commission interests 208,991 210,470
Investment in IOC 534,816 541,248
Total Non-Current Assets 743,807 751,718
Total Assets 797,340$ 809,428$
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable and accrued liabilities 7,457$ 8,920$
Dividend payable 19,200 22,400
Total Current Liabilities 26,657 31,320
Non-Current Liabilities
Deferred income taxes 131,480 132,900
Total Liabilities 158,137 164,220
Shareholders' Equity
Share capital 317,708 317,708
Retained earnings 326,345 332,350
Accumulated other comprehensive loss (4,850) (4,850)
639,203 645,208
Total Liabilities and Shareholders' Equity 797,340$ 809,428$
-
Approved by the Directors,
John F. Tuer Patricia M. Volker
Director Director
As at