TORONTO, May 8, 2024 /CNW/ - 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, 2024. Financial Performance In the first quarter of 2024, LIORC's financial results benefited from higher sales tonnages of pellets and concentrate for sale ("CFS"), partly offset by lower iron ore prices and pellet premiums. Royalty revenue for the first quarter of 2024 of $56.0 million was 20% higher than the first quarter of 2023 and 3% higher than the fourth quarter of 2023. Equity earnings from Iron Ore Company of Canada ("IOC") were $34.3 million in the first quarter of 2024 compared to $21.8 million in the first quarter of 2023 and $26.2 million in the fourth quarter of 2023. Net income per share for the first quarter of 2024 was $0.93 per share, which was a 36% increase over the same period in 2023 and a 15% increase over the fourth quarter of 2023. The adjusted cash flow per share for the first quarter of 2024 was $0.49 per share, which was 20% higher than in the same period in 2023 and 4% higher than the fourth quarter of 2023. While adjusted cash flow is not a recognized measure under International Financial Reporting Standards ("IFRS"), the Directors believe that it is a useful analytical measure as it better reflects cash available for dividends to shareholders. Ongoing uncertainty regarding the outlook for global steel demand and an unexpected increase in iron ore shipments from Brazil contributed to an almost 25% decrease in iron ore prices during the first quarter of 2024.  According to the World Steel Association, global crude steel production was up 1% in the first quarter of 2024 compared to the first quarter of 2023. However, concerns regarding steel demand, particularly as a result of China's troubled property sector and lower profit margins for steel producers has put pressure on the demand for higher quality iron ore and pellets. On the supply side, decreases in seaborne iron ore shipments from western Australia were offset by a 15% increase in iron ore shipments by Vale due to operational improvements during Brazil's traditionally rainy season. IOC sells concentrate for sale ("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 references to Platts quoted pricing, which refer to dry metric tonnes. Historically, IOC's wet ore contains approximately 3% less ore per equivalent volume than dry ore. In the first quarter of 2024, the 65% Fe index averaged US$136 per tonne, a 2% decrease over the prior quarter and a 3% decrease over the average of US$140 per tonne in the first quarter of 2023. However, while the 65% Fe Index started the quarter at a robust US$153 per tonne, it finished the quarter at US$115 per tonne. The monthly Atlantic Blast Furnace 65% Fe pellet premium index as quoted by Platts (the "pellet premium") averaged US$40 per tonne in the first quarter of 2024, down 12% from an average of US$46 per tonne in the same quarter of 2023, as lower steel margins continued to cause steel producers to substitute higher quality pellets with less expensive lower quality iron ore. Based on sales as reported for the LIORC royalty, the overall average price realized by IOC for CFS and pellets, FOB Sept-Îles, was approximately US$133 per tonne in the first quarter of 2024, compared to approximately US$136 per tonne in the first quarter of 2023. Iron Ore Company of Canada Operations Operations IOC concentrate production in the first quarter of 2024 of 4.7 million tonnes was 3% higher than the same quarter of 2023 and 5% lower than the fourth quarter of 2023. Concentrate production in the first quarter of 2024 benefited from a lower strip ratio as a result of changes in the mining sequence, which resulted in an increase in the amount of crushed ore that was delivered to the concentrator. IOC saleable production (CFS plus pellets) of 4.4 million tonnes in the first quarter of 2024 was 3% higher than the same quarter of 2023. Pellet production of 2.5 million tonnes was 15% higher than the corresponding quarter in 2023, due to an increase in the availability of concentrate and fewer plant reliability issues than in 2023. CFS production of 1.9 million tonnes was 9% lower than the same quarter of 2023 mainly due to the higher production of pellets. Sales as Reported for the LIORC Royalty Total iron ore sales tonnage by IOC (CFS plus pellets) of 4.4 million tonnes in the first quarter of 2024 was 20% higher than the total sales tonnage for the same period in 2023 and 1% higher than the fourth quarter of 2023.  The increase in IOC sales tonnage was largely a result of improved availability of inventory and timing of vessels. Pellet sales tonnages were 25% higher than the same quarter of 2023 and 7% higher than the fourth quarter of 2023. CFS sales tonnages were 13% higher than the same quarter of 2023 and 6% lower than the fourth quarter of 2023. Outlook Rio Tinto's 2024 guidance for IOC's saleable production (CFS plus pellets) remains at 16.7 million to 19.6 million tonnes. This compares to 16.5 million tonnes of saleable production in 2023. IOC continues to focus on upgrading its capital assets through increased capital expenditures.  As reported in the 2023 Annual Report, IOC's capital expenditures for 2024 are forecasted to be US$431 million, up from US$362 million in 2023. While lower capital investment rates, higher inflation and monetary tightening continue to negatively affect global steel demand, recently seaborne iron ore prices have shown some resiliency. Since the end of the first quarter, iron ore prices have improved. At the end of April 2024, the 65% Fe index was US$131 per tonne or 14% higher than at the end of the first quarter of 2024.  Longer term the outlook for iron ore and high-quality iron ore in particular, is positive.  The World Steel Association forecasts that global steel demand will grow by 1.7% in 2024 and 1.2% in 2025. It expects that steel demand in China in 2024 will remain flat, as declining demand from real estate investments is offset by growth in steel demand from infrastructure investments and manufacturing sectors. However, it forecasts broad-based growth in steel demand for the world excluding China of 3.5% per annum over 2024 and 2025, with India emerging as the strongest driver with 8% growth in its steel demand over 2024 and 2025. It also forecasts steel demand in the European Union showing a meaningful pick up in 2025 and continued resilience in the US, Japan and Korea. Lastly, significant additional demand for the type of high-quality iron ore products that IOC is capable of producing will come from the global transition to green steel.  Currently, steel production accounts for 7% – 9% of the world's greenhouse gas ("GHG") emissions.  The transition to steel production by way of the Electric Arc Furnace ("EAF") process and away from the Blast Furnace or Basic Oxygen Furnace process has the potential to substantially reduce GHG emissions.  This transition to EAF technology requires iron ore products with very low deleterious materials and a high iron content, such as those produced by IOC. According to Wood Mackenzie, just 8% of iron ore production is prime grade suitable for green steelmaking and another 15% – 20% can be processed to become such prime grade material. On April 16, 2024, the Federal Finance Minister tabled the Federal Budget 2024 which proposed an increase in the capital gains inclusion rate for corporations from one half to two thirds for capital gains realized on or after June 25, 2024. If this tax change is passed into law, it will be accounted for in the period of enactment and reflected in the financial results at that time.  LIORC's deferred income taxes payable includes a capital gain equal to the carrying value of its investment in IOC less its cost. If the capital gains rate change is enacted, it would have the impact of increasing deferred income taxes by approximately $25.3 million or $0.40 per share.  This would be a non-cash entry and will only impact LIORC in the event it sells its shares in IOC. LIORC has no debt and at March 31, 2024 had positive net working capital (current assets less current liabilities) of $30 million, which included the first quarter net royalty payment received from IOC on April 25, 2024 and the LIORC dividend in the amount of $0.45 per share paid to shareholders on the next day. Respectfully submitted on behalf of the Directors of the Corporation, John F. TuerPresident and Chief Executive OfficerMay 8, 2024 Management's Discussion and Analysis The following discussion and analysis should be read in conjunction with the Management's Discussion and Analysis section of Labrador Iron Ore Royalty Corporation's ("LIORC" or the "Corporation") 2023 Annual Report, and the financial statements and notes contained therein and the March 31, 2024 interim condensed consolidated financial statements. Overview of the Business The Corporation's revenues are entirely dependent on the operations of IOC as its principal assets relate to the operations of IOC and its principal source of revenue is the 7% royalty it receives on all sales of iron ore products by IOC. In addition to the volume of iron ore sold, the Corporation's royalty revenue is affected by the price of iron ore and the Canadian – U.S. dollar exchange rate. The first quarter sales of IOC are traditionally adversely affected by the general winter operating conditions and are usually 15% – 20% of the annual volume, with the balance spread fairly evenly throughout the other three quarters. Because of the size of individual shipments, some quarters may be affected by the timing of the loading of ships that can be delayed from one quarter to the next. Financial Highlights Three Months Ended March 31, 2024 2023  (in millions except per share information)  Revenue  $ 56.7 $ 47.2 Equity earnings from IOC  $ 34.3 $ 21.8 Net income  $ 59.3 $ 43.6 Net income per share $ 0.93 $ 0.68 Cash flow from operations  $ 30.0 $ 19.5 Cash flow from operations per share(1) $ 0.47 $ 0.30 Adjusted cash flow(1) $ 31.3 $ 26.1 Adjusted cash flow per share(1) $ 0.49 $ 0.41 Dividends declared per share $ 0.45 $ 0.50 (1) This is a non-IFRS financial measure and does not have a standard meaning under IFRS.       Please refer to Standardized Cash Flow and Adjusted Cash Flow section in the MD&A. The higher revenue, net income and equity earnings from IOC achieved in the first quarter of 2024 as compared to 2023 were mainly due to higher sales tonnages of pellets and CFS, partly offset by lower iron ore prices and pellet premiums. The first quarter of 2024 sales tonnages (CFS plus pellets) were higher by 20%. While CFS sales tonnages were 13% higher than the same quarter in 2023, pellet sales were 25% higher, predominantly due to improved availability of inventory and timing of vessels. The higher pellet and CFS sales tonnages resulted in royalty income of $56.0 million for the quarter as compared to $46.5 million for the same period in 2023. First quarter 2024 cash flow from operations was $30.0 million or $0.47 per share compared to $19.5 million or $0.30 per share for the same period in 2023. Equity earnings from IOC amounted to $34.3 million or $0.54 per share in the first quarter of 2024 compared to $21.8 million or $0.34 per share for the same period in 2023. Operating Highlights Three Months Ended March 31, IOC Operations 2024 2023  (in millions of tonnes)  Sales(1) Pellets 2.45 1.96 Concentrate for sale ("CFS")(2) 1.92 1.69 Total(3) 4.37 3.65 Production  Concentrate produced 4.75 4.63 Saleable production Pellets 2.53 2.19 CFS 1.92 2.11 Total(3) 4.45 4.30 Average index prices per tonne (US$) 65% Fe index(4) $ 136 $ 140 62% Fe index(5) $ 124 $ 126 Pellet premium(6) $ 40 $ 46 (1) For calculating the royalty to LIORC. (2) Excludes third party ore sales. (3) Totals may not add up due to rounding.