Royalty Holder…..........Lab' Iron Ore
Revenue……………..…..…............$80m
Mine Life...……………..….........28 years
Commodity………………..........Iron Ore
Operator……..........................Rio Tinto

#17 IOC

Founded in the 1990s as a tax getaway vehicle, Labrador Iron Ore Royalty has a huge 7 per cent royalty over Rio Tinto's IOC operation in Canada. It also collects 10 cents for every tonne of iron ore sold, adding up to a total of $80m last year. 

The company pays out the cash flow as dividends and has an octogenarian board, but the royalty was briefly thrown into play as iron ore prices tumbled in 2015. Osisko's chairman Sean Roosen waded into the stock, buying 9.75 per cent. Behind the scenes, Roosen then pushed for a breakup, forcing Labrador Iron Ore Royalty to fight an invisible rearguard action.

The company asked shareholders for permission to change its articles of association, allowing the board to go after new deals, knowing full well that institutional investors held the stock for its dividend and would strike the motion down. That they did, giving Labrador Iron Ore Royalty the mandate it wanted, to continue doing nothing.

Tacitly admitting defeat, Osisko announced the sale of its holding last week for C$113m ($85m), banking a 17 per cent gain. “We are very pleased with the 17.4% return we realized,” Roosen said.

 

 

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