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UPDATE: Labrador Iron Ore Royalty Up Another 1% On 2012 Results of Operations, Declares Special Dividend

Labrador Iron Ore Royalty Corporation (LIF.TO), which rose 2% to near year highs Friday, is up another 1% today after it announced the results of its operations for the year ended December 31, 2012. It also declared a regular quarterly cash dividend of $0.25 per Common Share and a special dividend of $0.125 per Common Share for a total dividend of $0.375. All amounts are payable to holders of record at the close of business on March 31, 2013 and to be paid on April 25, 2013.

The shareholders' adjusted cash flow for the year ended December 31, 2012 was $75.1 million or $1.17 per share as compared to $158.1 million or $2.47 per share for 2011.

Iron ore sales of IOC amounted to 14.1 million tonnes compared to 13.2 million tonnes in 2011. Although this reflects an improvement over the previous year, we had expected sales to be higher. However, sales were constrained by production, which was impacted by difficult operating conditions during the first part of the year and a number of problems encountered during the commissioning of the first phase of the expansion and integrating it into the operations. Iron ore prices remained reasonably strong in the first half of the year but suddenly weakened sharply in the third quarter, with a partial recovery occurring in the fourth quarter. As a result, in spite of increased production, royalty revenue for the year was 24% lower than last year's level. The Canadian dollar continued to trade close to par against its U.S. counterpart, averaging $1.00 against $1.01 in 2011

The Shareholders' consolidated net income for the year ended December 31, 2012 was $121.8 million or $1.90 per share compared to $209.3 million or $3.27 per share in 2011. Equity earnings from IOC amounted to $57.9 million compared to $124.0 million in 2011.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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