Business
Market Update and $0.50 per Unit Distribution
TORONTO, Dec. 12 /CNW/ - In recent weeks, iron ore markets have weakened substantially with most ...
About this update from Labrador Iron Ore Royalty Corporation
[{"type":"text","content":"\n\n\n\nTORONTO, Dec. 12 /CNW/ - In recent weeks, iron ore markets have weakened\nsubstantially with most producers, including Iron Ore Company of Canada (IOC),\ncutting back production in order to avoid building up excessive inventories.\nThe Trustees of the Labrador Iron Ore Royalty Income Fund are currently\nexpecting fourth quarter IOC sales to be below budget. The first quarter of\n2009 is also expected to be much slower than usual, with demand not picking up\nuntil later in the year.\n\n\nIn order to balance production with expected demand, IOC expects to run\nat approximately 80% of production capacity during 2009. This will be achieved\nby a number of measures, including shutting down all production facilities for\nthe month of July. In addition it is suspending the completion of its planned\n$800 million expansion of mining and production facilities at Labrador City.\nThese matters will be reviewed when market conditions stabilize.\n\n\nThe Trustees declared today a regular quarterly cash distribution of\n$0.50 per Trust Unit payable to holders of record at the close of business on\nDecember 31, 2008 and to be paid on January 26, 2009.\n\n\nFor tax purposes, the income from the cash distribution of $0.50 per\nTrust Unit will be considered to be income in 2008 allocated as follows:\n\n\n- Interest income of $0.143\n- Dividend income of $0.357\n\n\nIn light of current market conditions, the Trustees have decided not to\npay a special distribution at this time but to retain the surplus funds to\nenable the Fund to pay its regular distribution in the first quarter of 2009\nwithout the necessity of incurring debt.\n\n\nThe Fund through its wholly owned subsidiaries holds a 15.1% equity\ninterest in IOC and receives a 7% gross overriding royalty and a 10 cents per\ntonne commission on all iron ore products produced, sold and shipped by IOC.\n\n\n%SEDAR: 00002722E\n\n\n","length":1989,"tagName":"div"}]