BLASTING at Rio Tinto's iron ore operations in Canada, which are subject to a royalty held by Bruce Bone's Labrador Iron Ore Royalty. Photo: Rio Tinto

BLASTING at Rio Tinto's iron ore operations in Canada, which are subject to a royalty held by Bruce Bone's Labrador Iron Ore Royalty.
Photo: Rio Tinto

Labrador Kept in Irons

Issue 127, June 2015

In a grippingly close vote, shareholders in Labrador Iron Ore Royalty voted down a change to the company's structure at its AGM on Thursday that would have up-ended its entire business model.

The company currently feeds off a 7 per cent royalty over Rio Tinto's iron ore mines in Canada, but in March, as the iron ore price tanked to new lows, its directors announced a proposed change to its articles of association, allowing the company to issue up to 20 per cent of its stock to buy new royalty assets.

The key vote, Resolution 5, was defeated by the tightest of margins. The measure needed 75 per cent approval to come into force, but was struck down by 26.68 per cent of investors voting against.

"It was too close for comfort," one broker told Global Mining Observer shortly after the results were announced. "This will come up again."

Roosen in the Room

Analysts and brokers are vehemently divided over the role played at the vote by gold royalty upstart Osisko, which has built a 10 per cent stake in Labrador Iron Ore Royalty since the beginning of this year.

Some argue it almost certainly blocked the upheaval, whilst others say it supported the measure and could lift its holding, giving it "the muscle" to call another meeting.

Osisko's chief executive Sean Roosen was spotted in the room, whilst Bruce Bone, chief executive of Labrador Iron Ore Royalty, briefly sent the meeting into panic. "He runs the show there and he's got to be somewhere between eighty and ninety," one analyst estimates.

"He moves pretty slowly and he read the vote wrong. A large section of the room started to panic and somebody had to whisper in his ear, you're reading off the wrong page."

“You’re reading off the wrong page.”

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