Euan Rocha and Susan Taylor
RTGAM



TORONTO - Osisko Gold Royalties Ltd. 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 disclosed earlier on Friday that it has, since the beginning of the year, acquired a 9.75-per-cent interest in LIORC to diversify from gold production. The news sent shares in LIORC up as much as 11 per cent, 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."

"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 per cent 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-per-cent gross royalty on production from Iron Ore Co. of Canada.