April 5 Labrador Iron Ore Royalty Corp
said on Friday it has hired advisors to consider a possible sale
or other strategic options following reports that Rio Tinto
may sell its controlling stake in the Canadian company's
Labrador Iron Ore owns a 15.1 percent equity stake and a 7
percent royalty interest in the Iron Ore Company of Canada
(IOC), Canada's largest iron ore producer.
Rio, which owns 59 percent of IOC, recently hired investment
banks to sell its stake, two sources familiar with the matter
told Reuters last month.
Labrador Iron Ore said its board is now mulling "all
strategic alternatives," including selling the company, selling
all or part of its assets, severing its royalty and equity
interests in IOC, and maintaining the status quo.
According to its website, Labrador Iron Ore is "entirely
dependent on IOC, as the only assets of LIORC and its subsidiary
are related to IOC and its operations."
Waratah Advisors a shareholder in Labrador Iron Ore Royalty
Corp had earlier this year called on the company to explore its
strategic options in light of Rio Tinto's move.
In a statement earlier on Friday, Waratah urged the company
to explore a separation of the equity stake and royalty asset.
"We reiterate that the royalty is a premium financial asset
which is having its true value diminished by the IOC equity,"
said Waratah. "The Board should move to separate these two
discrete assets, through a tax efficient spin-out of the IOC
equity to LIORC's shareholders or otherwise."