TORONTO, March 9, 2015 /CNW/ - Labrador Iron Ore Royalty Corporation (TSX: LIF) ("LIORC") announced today that, at its Annual Meeting to be held on May 28, 2015, shareholders will be asked to approve an amendment to its articles to give LIORC the flexibility to invest in metal or mineral royalties and issue shares to finance such investments.
The management and the Board of Directors of LIORC have 20 years' experience successfully managing the iron ore royalty on production of Iron Ore Company of Canada ("IOC") and have created significant value for LIORC's shareholders. This will continue as LIORC's main focus. However, opportunities may arise to diversify LIORC's revenue sources by acquiring metal or mineral royalties to potentially create more value for LIORC shareholders. The current LIORC articles, which require shareholder approval prior to completing such an acquisition, place LIORC at a disadvantage with competing buyers. Sellers would have concern with the delay and uncertainty associated with the requirement for LIORC to seek shareholder approval to complete, and possibly finance, the acquisition, and thus would favour others who did not have this restriction. Passage of the proposed amendment to the articles would remove the current disadvantage of LIORC in pursuing any attempt to acquire an attractive metal or mineral royalty.
The current LIORC articles prohibit the acquisition of any asset that does not relate to the operations of IOC without having the acquisition approved first by shareholders and also prohibits the issue of any shares without prior shareholder approval. Shareholders will be asked to amend the articles to give management and the Board of Directors the authority to acquire other metal or mineral royalties without prior shareholder approval. Since it may be advantageous to issue shares to complete or finance such acquisitions, shareholders will also be asked to authorize the issuance of up to 20% of the outstanding shares (12.8 million) in the aggregate to do so.
This news release contains forward-looking statements. These statements are based on current expectations, estimates about the markets in which LIORC operates and management's beliefs and assumptions regarding these markets. These statements are subject to risks and uncertainties, as a result of which the statements may prove to be inaccurate. Actual results may differ materially from current expectations and those expressed or implied by LIORC. The reader is cautioned against undue reliance on these forward-looking statements. Except as required by applicable law, the management of LIORC and the Directors undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
LIORC is a Canada corporation resulting from the conversion of Labrador Iron Ore Royalty Income Fund under an Arrangement effective July 1, 2010. It holds a 15.10% equity interest in IOC directly and through its wholly-owned subsidiary, Hollinger-Hanna Limited, and receives a 7% gross overriding royalty and a 10 cent per tonne commission on all iron ore products produced, sold and shipped by IOC.
SOURCE Labrador Iron Ore Royalty Corporation