CORRECTED-UPDATE 1-Osisko says no plans to acquire Labrador Iron Ore Royalty
(Corrects that David Taylor manages funds on behalf of IA Clarington, but is not a fund manager for IA Clarington, in paragraph 7)
By Euan Rocha and Susan Taylor
TORONTO May 15 (Reuters) - Osisko Gold Royalties said on Friday it has no plans to buy Labrador Iron Ore Royalty Corp and that the stake it has built in the company is purely for investment purposes.
Osisko Gold Royalties Ltd disclosed earlier on Friday that it has, since the beginning of the year, acquired a 9.75 percent interest in LIORC to diversify from gold production. The news sent shares in LIORC up as much as 11 percent, as analysts speculated that Osisko's investment could be the first step toward acquisition.
"We bought it for investment purposes, we bought it at the right price and it provides a good yield for us," Osisko Chief Executive Sean Roosen said in an interview.
"It is a liquid asset and it goes a long way in offsetting a significant portion of our own general and administration expenses, and provides far better returns than leaving our cash in the bank right now."
Roosen said that he has no "intention of buying the entire company."
LIORC shares peaked at C$16.88 on the Toronto Stock Exchange Friday before edging back to C$16.65, a 9.6 percent increase. Osisko stock was down 0.4 percent.
"For right now it's a great investment," said David Taylor, president of Taylor Asset Management. The funds that Taylor manages on behalf of IA Clarington currently own 5 percent of LIORC. "I believe in it, obviously, because I'm a big shareholder."
Osisko and LIORC are mining royalty companies which finance other mining companies to get a share of future income from their operations. LIORC gets a 7 percent gross royalty on production from Iron Ore Co Of Canada. (Editing by Ted Botha)
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