Labrador Iron Ore Royalty rises despite paring Q4 earnings
TORONTO (miningweekly.com) – Labrador Iron Ore Royalty Corporation (LIORC) on Friday reported that consolidated net income for the year ended December 31 totalled $54.7-million, or $0.85 a share, compared with $104.1-million or $1.63 a share in 2014.
Adjusted cash flow for the year was $56.2 million, or $0.88 a share, compared with $113.6-million, or $1.77 a share for 2014.
The company, which held a 15.10% interest in Rio Tinto majority-owned Iron Ore Company (IOC) of Canada, and received a 7% gross overriding royalty and a $0.10/t commission on all iron-ore products produced, sold and shipped by IOC, advised that adjusted cash flow and net income for the year were lower year-on-year, mainly owing to the collapse of iron-ore prices.
IOC's 2015 iron-ore sales totalled 17.9-million tonnes, compared with 14.3-million tonnes in 2014. Royalty revenue decreased to $99.7-million, compared with $115.7-million in 2014. Equity earnings from IOC amounted to $2.4-million, compared with $40.6-million in 2014.
Iron-ore prices continued the decline that started in 2014, with the Platts 62.5% fines index for 2015 averaging 43% less than 2014. The price hit a low of $38.50/dmt on December 15, with $69.25 on the same date in 2014.
The price decline was the result of demand for iron-ore in China falling at the same time as significant producers in Australia and Brazil were increasing output.
LIORC’s TSX-listed stock on Friday jumped as much as 19% to C$13.22 apiece after the news release earlier in the day.
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