Labrador Iron Ore Royalty : 2026 First Quarter Report

About this update from Labrador Iron Ore Royalty Corporation

To the Holders of Common Shares of Labrador Iron Ore Royalty Corporation The Directors of Labrador Iron Ore Royalty Corporation ("LIORC" or the "Corporation") present the first quarter report for the period ended March 31, 2026. Financial Performance In the first quarter of 2026, LIORC's financial results continued to be negatively affected by low concentrate for sale ("CFS") and pellet sales volumes. Royalty revenue for the first quarter of 2026 was $35.4 million, comparable to the first quarter of 2025 and a 9% decrease from the fourth quarter of 2025. Equity (losses) earnings from Iron Ore Company of Canada ("IOC") totaled ($6.4) million in the first quarter of 2026 compared to $3.3 million in the first quarter of 2025 and $1.7 million in the fourth quarter of 2025. Net income per share for the first quarter of 2026 was $0.21 per share, which was a 36% decrease from the same period in 2025 and a 40% decrease from the fourth quarter of 2025. The adjusted cash flow per share for the first quarter of 2026 was $0.31 per share, consistent with the same period in 2025 and 9% lower than the fourth quarter of 2025. While adjusted cash flow is not a measure recognized under IFRS Accounting Standards, the Directors believe it provides a useful analytical indicator of cash available for distribution to shareholders. Iron ore prices saw modest improvement during the first quarter of 2026, despite lower global steel production and robust global seaborne iron ore sales. Global steel production fell as China pivoted from construction-grade output to high-value specialty products. This decline was worsened by high energy costs and new carbon regulations that squeezed production margins across Europe. According to the World Steel Association, global steel production was down 2% in the first quarter of 2026 compared to the first quarter of 2025, and steel production in China declined by 5% in the first quarter compared to the same period in 2025. On the supply side, iron ore production remained robust. Combined sales from the world's three largest seaborne producers (Rio Tinto, Vale, and BHP) increased by 2% for the quarter ended March 31, 2026, compared to the same quarter in the prior year. IOC sells CFS based on the Platts index for 65% Fe, CFR China ("65% Fe index"). All references to tonnes and per-tonne prices in this report refer to wet metric tonnes, other than ...

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