June 6, 2019 / 3:52 PM / 4 months ago

BUZZ-Labrador Iron Ore: Offers good exposure to premium iron ore -Raymond James

** Raymond James initiates coverage on royalty company Labrador Iron Ore Royalty Corp with an “outperform” rating; sets PT of C$35

** Brokerage expects co’s dividend yield to be over 8% in 2019 and 2020 even assuming lower iron ore prices

** Raymond James says co gives investors good exposure to premium iron ore through its stake in Iron Ore Company of Canada (IOC) and royalties arising from it

** IOC produces higher grade iron ore concentrate and pellets, which are high quality products that can be sold at a premium to the ~62% iron ore benchmark price - Raymond James

** Brokerage notes additional value might be created if co was split in a tax efficient manner given royalty companies historically trade at a higher multiple given their lower risk

** Earlier this year, co’s major shareholder Altius proposed splitting the co to achieve higher valuation

** Out of 4 brokerages, 2 rate the stock “buy” or higher, 2 “hold”; median PT C$37

** Up to Wednesday’s close, LIF shares are up ~32% YTD (Reporting by Shanti S Nair in Bengaluru)

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