Labrador Iron Ore Royalty Corporation’s (LIORC) has kept its production and financial targets for 2020 unchanged, but has warned that uncertainties around the future impact of COVID-19 could affect these projections.
The company, which reported its Q1 2020 earnings on Tuesday, said that the guidance from its parent company, Rio Tinto, to produce between 17.9-20.4mn mt of carbon free steel (CFS) during the year also remained unchanged.
LIORC indicated it could run its operations safely under the Quebec, Labrador, and Newfoundland government guidelines on COVID-19 and has also benefited from the increased demand for iron ore from China and reduced iron ore supply from Brazil due to heavy rains.
Moreover, the company has halted production of two pellet machines to focus on production of CFS to meet its increasing demand and the guidance set forth by Rio Tinto, LIOR noted in its earnings report.
The company’s total iron ore concentrate output (CFS and pellets included) in Q1 2020 increased by 7pc to 4.7mn mt from Q1 2019 and was up by 1pc from Q4 2019. CFS production in Q1 2020 rose by 4pc to 1.6mn mt compared to Q1 2019 but declined by 19pc from Q4 2019. Pellets production rose by 3pc to 2.8mn mt in Q1 2020 from the same period in 2019 and was higher by 15pc from Q4 2019.
LIOR’s total sales of iron ore concentrate (CFS and pellets included) in Q1 2020, grew by 33pc to 4.7mn mt from Q1 2019 due to higher production of CFS and pellets. In Q1 2020, CFS sales grew by 103pc and pellets sales increased by 12pc compared to the same period last year.
The company’s revenue in the first quarter of the year stood at C$47.6mn (US $33.8mn) up from C$38.5mn in Q1 2019. LIOR’s net income in Q1 2020 also rose to C$46.7mn compared to C$39.2mn during the same period last year.
(C$1 = US$0.71)