Labrador Iron Ore Royalty Corporation Responds to Rio Tinto's Process to Sell its Interest in Iron Ore Company of Canada
TORONTO, April 5, 2013 /CNW/ - Labrador Iron Ore Royalty Corporation ("LIORC") (TSX: LIF) announced today that, in response to media reports that Rio Tinto has commenced a process to sell its interest in Iron Ore Company of Canada ("IOC") and inquiries from LIORC shareholders regarding LIORC's response to this process, it retained last month Scotiabank, as its financial advisor, and Davies Ward Phillips & Vineberg LLP and other legal advisors, to assist the LIORC Board in considering the implications on LIORC of any sale by Rio Tinto of its interest in IOC and the strategic alternatives available to LIORC in the circumstances.
As part of this process, the LIORC Board has been considering how to ensure that LIORC's interests are protected in the context of any possible sale of Rio Tinto's interest in IOC, and intends to consider all strategic alternatives available to LIORC, including a potential sale of the company or all or part of its assets, the separation of LIORC's 7% royalty interest in IOC ("the Royalty Interest") from its other assets, and the maintenance of the status quo.
The Board has made no determinations yet as to the steps (if any) to be taken by LIORC, and any determinations made by the Board will need to take into account, and will be significantly impacted by, any sale by Rio Tinto of its interest in IOC. LIORC will provide updates on these matters as it deems appropriate. Shareholders are advised that there can be no assurance that any transaction involving LIORC will occur as a result of Rio Tinto's potential sale of its interest in IOC or the Board's strategic review of alternatives.
LIORC also noted the request from Waratah Advisors included in a press release issued earlier today that a non-binding shareholder proposal be included in the agenda for the upcoming annual general meeting of LIORC proposing that the LIORC Board take steps, including engaging legal and financial advisors, to initiate a process to explore the separation of LIORC's 15.1% equity stake in IOC from the Royalty Interest. Given that LIORC has already engaged legal and financial advisors to assist it in exploring strategic alternatives, including the possible separation of the Royalty Interest, LIORC has taken the steps contemplated by the Waratah proposal.
SOURCE: Labrador Iron Ore Royalty CorporationFor further information:
Bruce C. Bone
President & Chief Executive Officer