Scully Royalty Ltd.

Scully Royalty Ltd. is a company that holds a royalty interest in the Scully Mine. The Scully Mine produces high-grade iron ore with over 65% iron content and low contaminant ratios, such as silica, alumina, and phosphorus. This type of iron ore is valued by steelmakers globally because it supports more efficient raw material use, higher plant yields, and lower emissions, improving both environmental and financial performance. Consequently, 65% Fe iron ore, including the Scully Mine's product, typically sells at a premium to 62% Fe iron ore. In 2024, the Platts 65% Fe index sold at approximately a 13% (US$14) premium to the Platts 62% Fe Index. The total iron ore products, which include pellets, chips, and concentrates, shipped from the Scully Mine were 3,060,800 tonnes for the year ended December 31, 2024, and 3,535,238 tonnes for the year ended December 31, 2023. Production in 2024 was affected by factors including wildfires in Newfoundland and Labrador, Canada, during the summer of 2024. In October 2023, the Scully Mine operator initiated proceedings under the Companies' Creditors Arrangement Act (CCAA). In September 2024, a transaction under the CCAA process closed, led by an investor group including Cargill Incorporated, Millstreet Capital Management, and O'Brien-Staley Partners. This transaction involved a US$250 million equity injection, a strengthened balance sheet, an improved business plan, and new union, sales offtake, and rail transport arrangements. The company's board of directors has a dividend policy aimed at maximizing potential future dividends to holders of its Common Shares, with declarations and payments made periodically based on financial position, operating results, and working capital needs.