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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 20-F

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2024

Commission file number 001-04192

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(Exact name of Registrant as specified in its charter)

Cayman Islands

(Jurisdiction of incorporation or organization)

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c/o Room 2103 Shanghai Mart Tower, 2299 Yan An Road West, Changning District, Shanghai China 200336

(Address of office)

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(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

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Securities registered or to be registered pursuant to Section 12(g) of the Act: None.

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Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None.

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

There were 14,822,251 Common Shares of US$0.001 par value each issued and outstanding as at December 31, 2024.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ YES ☒ NO

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. ☐  YES ☒  NO

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒YES ☐ NO

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ YES ☐ NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer, “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

†The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.  ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

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If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. ◻ Item 17 ◻ Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ YES ☒ NO

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April 30, 2025

DEAR FELLOW SHAREHOLDERS:

We are pleased to present the financial results of Scully Royalty Ltd. for the year ended December 31, 2024 and provide you with an update on recent corporate developments. All dollar amounts are in Canadian dollars unless otherwise provided.

Overview

The Company owns a royalty interest in the Scully iron ore mine located in the Province of Newfoundland and Labrador, Canada. This royalty rate entitles the Company to 7.0% of the revenue from iron ore shipped from the mine and 4.2% from shipments derived from tailings and other disposed material, with minimum payments of $3.25 million per annum.

The Scully Iron Ore Mine

Iron ore is a key raw material in steel production, making it essential for global economic development. Its demand and pricing are closely tied to the material needs of integrated steel producers. As steel produced via blast furnaces is subject to cyclical demand patterns, the iron ore market inherently experiences similar fluctuations.

Location of the Scully Iron Ore Mine

Key Ingredient for Green Steel

The Scully iron ore mine produces premium-grade ore with over 65% iron content and favorable characteristics, including low levels of contaminants such as silica, alumina, and phosphorous. Such high-grade iron ore with minimal impurities is highly valued by steelmakers worldwide, as it enhances both environmental and financial performance through more efficient raw material utilization, higher plant yields, and lower emissions. As a result, the Scully Mine’s high-quality concentrate plays a vital role in supporting the global shift toward “green” steel production. The mine is well-situated to address this growing demand because of, among other things:

Iron ore with 65% Fe content, such as the product from the Scully Iron Ore Mine, typically commands a premium over 62% Fe iron ore due to its superior quality. In 2024, the Platts 65% Fe index traded at an approximate 13% premium (US$14), with an average price of US$123 per tonne compared to US$109 per tonne for the Platts 62% Fe index.

The following chart illustrates the premium between 65% Fe and 62% Fe Iron Ore:

Tacora Resources

In 2017, Tacora Resources Inc. (“Tacora”) acquired the mine and achieved several milestones, including completing a US$276 million financing and commencing operations at the mine in 2019. Tacora disclosed that the mine has a capacity of six million tonnes per annum and produces what is considered a premium iron ore product, with Fe content in excess of 65%.

Despite nearly four years of continuous production, Tacora filed for reorganization under the Companies’ Creditors Arrangement Act (“CCAA”) in October 2023. This decision was driven primarily by challenges related to over-indebtedness.

Tacora’s New Shareholders:

In September 2024, Tacora successfully emerged from CCAA proceedings as a significantly stronger entity. The company restructured with a reduced debt burden, a leaner operating cost profile, and a newly appointed, experienced management team. Most notably, Tacora gained the backing of a new consortium of well-capitalized shareholders, demonstrating a strong commitment to the long-term success and sustainability of the Scully Mine. The consortium of investors consists of (i) Cargill, (ii) Millstreet Capital Management, and (iii) O’Brien Staley Partners. The transaction involved a US$250 million equity injection, a significantly strengthened balance sheet, new senior management and a revised business plan.

Cargill is the largest privately held company in the United States in terms of revenue. Cargill, Incorporated is committed to providing food, ingredients, agricultural solutions, and industrial products to nourish the world in a safe, responsible, and sustainable manner. With 159 years of experience, Cargill partners with farmers and customers to source, make, and deliver products vital for living.

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Millstreet Capital Management LLC (“Millstreet” or the “Firm”) is a Boston based SEC-registered investment adviser. Millstreet invests on behalf of endowments, foundations and other institutional investors with the goal to compound superior absolute returns that are uncorrelated to traditional asset classes. The firm focuses on exploiting inefficiencies within the small-to-mid cap segment of the high yield and leveraged loan markets. Millstreet had assets under management of almost $3 billion as at December 31, 2023.

O’Brien-Staley Partners (“OSP”) operates across four discrete financial business strategies: alternative asset management, market-rate impact investing, nationwide loan servicing, and deposit management. Founded by Jerry O’Brien and Warren Staley in 2010, OSP is imbued with core credit and fundamental investing discipline, risk management, and governance that are hallmarks of their personal and professional brands. O’Brien Staley Partners had assets under management of almost $2 billion as at December 31, 2023.

Historical Mine Production

The following table sets forth the total iron ore products shipped from the mine from from the second half of 2019 through 2024:

Production of iron ore at the Scully mine in 2024 was impacted by several factors, including wildfires in the Province of Newfoundland and Labrador during the summer months.

The Scully Iron Ore Mine

With the new shareholders in place, Tacora announced that it commenced a multi-year capital investment and ramp-up plan aimed at restoring the Scully Mine to its historic nameplate production capacity of six million tonnes per annum of high-grade iron ore concentrate. This initiative underscores Tacora’s commitment to optimizing operations and enhancing the mine’s long-term productivity.

Labrador Trough

The Scully Mine is located in the Labrador Trough, one of the world’s most resource-rich iron ore mining regions in eastern Canada. Renowned for its extensive high-grade iron ore deposits, including hematite and magnetite, the Labrador Trough offers exceptional long-term mining potential. The region benefits from well-developed infrastructure, such as railways and ports, enabling efficient transportation of ore to key global markets, including Asia, Europe, and the Middle East. Canada’s stable political environment and supportive regulatory framework further enhance the area’s appeal for sustainable and profitable mining operations.

Recent investment activity in the Labrador Trough is encouraging to the Eastern Canadian iron ore industry. For instance, Champion Iron Ore announced a $245 million investment from Nippon Steel and Sojitz for a minority stake in the Kami iron ore mine, located just six kilometers from the Scully Mine. This move underscores the strategic importance of high-grade iron ore assets in geopolitically stable regions and reflects the strong demand among global steel producers for reliable, premium-quality supply sources. These investments highlight the confidence in the Labrador Trough as a leading mining hub and further validate the Scully Mine’s position as a critical asset in the global iron ore market.

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The Company prioritizes enhancing shareholder value and maximizing earnings and dividends from its iron ore royalty interest. As part of this commitment, the Company’s board of directors approved the implementation of a cash dividend policy, reinforcing its focus on delivering consistent returns to shareholders.

The Scully Iron Ore Mine

In December, we announced that we had resumed our cash dividend policy with the following dividend:

The declaration, timing, record date and payment of future dividends will depend on, among other things, royalty payments received, and the Company's Royalty operator’s financial condition and operating results.

As part of our ongoing strategy to streamline our operations and concentrate our efforts on our core asset - the Scully iron ore royalty - we previously announced that we have initiated a process to rationalize certain underperforming or non-core assets, and their associated liabilities, classified within our “All Other” segment. This strategic refocusing reflects our intent to simplify our corporate structure, reduce operating complexity, and unlock shareholder value by concentrating capital and management attention on our core asset.

As a result of this initiative, we determined that the criteria for classification as “held for sale” under IFRS 5 were met with respect to certain assets and related liabilities as at December 31, 2024. As a result, the assets and related liabilities relating to these businesses were classified as held for sale as at December 31, 2024. In aggregate, the assets held for sale represented approximately 20% (after impairment losses) of our consolidated total assets at December 31, 2024. These assets held for sale generated revenue from third parties of $9.0 million, loss before taxes of $3.3 million and a net loss of $4.5 million in 2024.

The following sets forth the assets held for sale and related liabilities as of December 31, 2024:

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All intercompany assets and liabilities have been eliminated in connection with this classification. An impairment loss of $18.6 million was included in our consolidated statement of operations in 2024 in connection with the classification.

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As previously disclosed, we entered into an agreement to rationalize these assets and liabilities. This transaction is not expected to have any material impact on our net book value. Upon closing of the transaction as currently anticipated, we expect to recognize approximately $15 million of securities and approximately $55.4 million as an equity method investment. For illustrative purposes, if this transaction had closed on December 31, 2024, our shareholders’ equity would have remained at $302.3 million at such date.

Liquidity is a cornerstone of our business. We monitor our cash balances and overall liquidity position on a regular basis to ensure we have adequate financial and operational flexibility. We seek to maintain sufficient liquid assets and working capital at all times to fund our operations.

Included in our liquid assets are: (i) cash and cash equivalents, (ii) short-term securities, which are primarily comprised of government debt securities and term deposits; and (iii) receivables collectible in the ordinary course.

The following sets forth these liquid assets and working capital for December 31, 2024, June 30, 2024, and December 31, 2023:

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In the ordinary course of managing our treasury, we monitor opportunities to increase the interest income we earn while maintaining a prudent risk profile and equivalent liquidity position. In 2024, we made the decision to invest in various term deposits and short-term government securities, which enhanced the yields on our liquid assets. Notwithstanding the reduction in our cash balance, our overall liquidity profile remained unchanged, as we maintain access to various liquidity facilities through our bank subsidiary that enable us to borrow against these short-term securities. As at December 31, 2024, there were no amounts drawn against these facilities. However, we may utilize them in the future should opportunities arise to generate adequate returns on a risk-adjusted basis.

Our goal and ongoing initiative is to restructure the group in a manner that substantially reduces the discount between the market price of our common shares and our stated net book value per share.

The Scully Iron Ore Mine

In the past few years, we have made substantial progress toward this goal. Today, we more cleanly fit into iron ore royalty peers than ever before:

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A summary of our financial position at December 31, 2024 is as follows:

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Revenue for 2024 decreased to $35.3 million from $54.9 million in the same period of 2023 mainly as a result of the disposition of our energy interests in March 2023 and decreased royalty income in 2024. Costs of sales and services decreased to $7.1 million in 2024 from $19.1 million in 2023, primarily as a result of a merchant banking gain included in costs of sales and services, a fair value gain on our investment property, and the disposition of certain energy assets in March 2023.

Selling, general and administrative expenses increased to $25.3 million in 2024 from $24.2 million in 2023 primarily due to the stronger Euro against the Canadian dollar and other expenses.

In 2024, we recognized a non-cash impairment loss of $18.6 million on assets held for sale in connection with the aforementioned rationalization transaction.

We recognized an income tax recovery (other than resource property revenue taxes) of $2.6 million in 2024, compared to an income tax expense (other than resource property revenue taxes) of $1.9 million in 2023. Excluding resource property revenue taxes, we paid $0.3 million in income tax in cash during 2024 and, in 2023, excluding resource property revenue taxes, we paid $0.4 million in income tax in cash during 2023. We also recognized a resource property revenue tax expense of $3.9 million in 2024, compared to $6.9 million in 2023.

In 2024, our net loss attributable to shareholders was $20.6 million, or $1.39 per share on a basic and diluted basis, compared to net income attributable to shareholders of $1.4 million, or $0.09 per share on a basic and diluted basis attributable to shareholders in 2023.

As at December 31, 2024, cash decreased to $19.1 million from $78.3 million as at December 31, 2023. The decrease was primarily the result of increased investments in securities and the classification of assets as held for sale.

We had short-term securities of $23.5 million as at December 31, 2024 and $13.0 million as at December 31, 2023, which comprised of government and other securities.

Trade receivables and other receivables were $0.9 million and $40.7 million, respectively, as at December 31, 2024, compared to $1.9 million and $67.8 million, respectively, as at December 31, 2023.

We had bonds payable of $36.5 million as at December 31, 2024 and $36.1 million as at December 31, 2023. In 2024, the terms of these bonds were amended to extend their maturity date from August 2026 to August 2033 and increase the interest rate from 4.00% to 5.70% per annum.

As at December 31, 2024, we had deferred income tax liabilities of $51.5 million compared to $58.4 million as at December 31, 2023. These deferred income tax liabilities primarily relate to the difference in the tax basis and the carrying value of our iron ore royalty interest.

We welcome any questions you may have and looks forward to discussing our operations, results and plans with stakeholders. Further:

Respectfully Submitted,

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SCULLY ROYALTY LTD.

Form 20-F

TABLE OF CONTENTS

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INTRODUCTORY MATTERS

All references in this document to “$” and “dollars” are to Canadian dollars, all references to “US$” are to United States dollars and all references to “Euro” or “€” are to the European Union Euro, unless otherwise indicated.

Unless the context otherwise indicates, references herein to “we”, “us”, “our” or the “Company” are to Scully Royalty Ltd. and its consolidated subsidiaries.

PART I

FORWARD-LOOKING STATEMENTS

This document contains certain forward-looking information and statements, including statements relating to matters that are not historical facts and statements of our beliefs, intentions and expectations about developments, results and events which will or may occur in the future, including “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995, as amended, collectively referred to as “forward-looking statements”. Forward-looking statements are typically identified by words such as “anticipate”, “could”, “should”, “expect”, “may”, “intend”, “will”, “plan”, “estimate”, “believe” and similar expressions suggesting future outcomes or statements or their negative or other comparable words. Forward-looking statements include, but are not limited to, statements with respect to: future performance, business plans and prospects and expectations regarding economic conditions, our markets, legal proceedings and other future events. All such forward-looking statements are based on certain assumptions and analyses made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. These forward-looking statements are, however, subject to known and unknown risks and uncertainties and other factors. As a result, actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits will be derived therefrom. These risks, uncertainties and other factors include, among others, those set forth under the heading entitled “Item 3: Key Information – D. Risk Factors”.

Although we believe that the expectations reflected in such forward-looking information and statements are reasonable, we can give no assurance that such expectations will prove to be accurate. Accordingly, readers should not place undue reliance upon any of the forward-looking information and statements set out in this document. The forward-looking information and statements are made as of the date of this document and we assume no obligation to update or revise them except as required pursuant to applicable securities laws.

CURRENCY INFORMATION

The following table sets forth the exchange rates for the translation of United States dollars to Canadian dollars in effect at the end of each of the three most recent financial years. The exchange rates are based on the average daily rate of exchange as reported by the Bank of Canada.

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On April 28, 2025, the average daily rate of exchange for the translation of United States dollars and Euros to Canadian dollars were US$1.00 = $1.3850 and €1.00 = $1.5773, respectively.

NOTE ON FINANCIAL AND OTHER INFORMATION

Unless otherwise stated, all financial information presented herein has been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, referred to as “IFRS” and the “IASB”, respectively, which may not be comparable to financial data prepared by many U.S. companies.

Due to rounding, numbers presented throughout this document may not add up precisely to the totals we provide and percentages may not precisely reflect the absolute figures.

All websites referred to herein are inactive textual references only, meaning that the information contained on such websites is not incorporated by reference herein and you should not consider information contained on such websites as part of this document unless expressly specified.

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NON-IFRS FINANCIAL MEASURES

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This document includes “non-IFRS financial measures”, that is, financial measures that either exclude or include amounts that are not excluded or included in the most directly comparable measure calculated and presented in accordance with IFRS. Specifically, we make use of the non-IFRS measures “EBITDA”.

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EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Our management uses EBITDA as a measure of our operating results and considers it to be a meaningful supplement to net income as a performance measurement, primarily because we incur significant depreciation and EBITDA eliminates the non-cash impact.

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EBITDA is used by investors and analysts for the purpose of valuing an issuer. The intent of EBITDA is to provide additional useful information to investors and the measure does not have any standardized meaning under IFRS. Accordingly, this measure should not be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS. For a reconciliation of net income from continuing operations to EBITDA, please see “Item 5: Operating and Financial Review and Prospects – Results of Operations”.

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ITEM 1:  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

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ITEM 2:  OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

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ITEM 3:  KEY INFORMATION

A. [RESERVED]

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

An investment in our common shares of US$0.001 par value each, referred to as the “Common Shares”, involves a number of risks. You should carefully consider the following risks and uncertainties in addition to other information in this annual report on Form 20-F in evaluating our Company and our business before making any investment decisions. Our business, operating and financial condition could be harmed due to any of the following risks.

Risk Factors Relating to Our Business

Our financial results may fluctuate substantially from period to period.

We expect our business to experience significant periodic variations in its revenue and results of operations in the future. These variations may be attributed to varying iron ore prices and production levels at the mine underlying our royalty interest. Additionally, they may result from the fact that our merchant banking revenue is often earned upon the successful completion of a transaction, the timing of which is uncertain and beyond our control. In many cases, we may receive little or no payment for engagements that do not result in the successful completion of a transaction. Additionally, we seek to acquire undervalued assets where we can use our experience and management to realize upon the value. Often, we will hold or build upon these assets over time and we cannot predict the timing of when these assets’ values may be realized. As a result, we are unlikely to achieve steady and predictable earnings, which could in turn adversely affect our financial condition and results of operations.

A weakening of the global economy, including capital and credit markets, could adversely affect our business and financial results and have a material adverse effect on our liquidity and capital resources.

Our business, by its nature, does not produce predictable earnings and it may be materially affected by conditions in the global financial markets and economic conditions generally. As demand for our products and merchant banking services has historically been determined by general global macro-economic activities, demand and prices for our products and services have historically decreased substantially during economic slowdowns. A significant economic downturn may affect our sales and profitability and may adversely affect our suppliers and customers. Further, an economic downturn may impact the operations and production of the iron ore mine underlying our royalty interest. Depending on their severity and duration, the effects and consequences of a global economic downturn could have a material adverse effect on our liquidity and capital resources, including our ability to raise capital, if needed, and otherwise negatively impact our business and financial results.

A weakening of global economic conditions would likely aggravate the adverse effects of difficult economic and market conditions on us and on others in our industries. In particular, we may face, among others, the following risks related to any future economic downturn: reduced or volatile iron ore prices, increased regulation of our banking operations; compliance with such regulation may increase the costs of our banking operations, may affect the pricing of our products and services and limit our ability to pursue business opportunities; reduced demand for our products and services; inability of our customers to comply fully or in a timely manner with their existing obligations; and the degree of uncertainty concerning economic conditions may adversely affect the accuracy of our estimates, which, in turn, impact the reliability of the process and the sufficiency of our credit loss allowances.

Further, any disruption or volatility in the global financial markets could have a material adverse effect on us, including our ability to access capital and liquidity on financial terms acceptable to us, if at all. Market deterioration and weakness can result in a material decline in the number and size of the transactions that we execute for our own account or for our clients and a corresponding decline in our revenue. Any market weakness can further result in losses to the extent that we hold assets in such market. If all or some of the foregoing risks were to materialize, this could have a material adverse effect on us.

Our business is highly competitive.

Aspects of our business are highly competitive and we expect them to remain so.

Our competitors include merchant and investment banks, brokerage firms, commercial banks, private equity firms, hedge funds, financial advisory firms and mineral royalty companies. Some of our competitors have substantially greater capital and resources, including access to supply, than we do. We believe that the principal factors affecting competition in our business include transaction execution, our products and services, client relationships, reputation, innovations, credit worthiness and price.

The scale of our competitors has increased in recent years as a result of substantial consolidation. These firms may have the ability to offer a wider range of products than we do, which may enhance their competitive position.

Our earnings and, therefore, our profitability may be affected by price volatility in our various products.

A significant portion of our revenue in 2024 was derived from our iron ore royalty interest. Any revenues from our royalty interest are impacted by the price of iron ore. As such, our earnings are directly related to the price of iron ore and demand for steel products. There are many factors influencing the price and demand for these products, including: expectations for inflation; global and regional demand and production; international trade policy and developments; political and economic conditions; and production costs in major producing regions. These factors are beyond our control and are impossible for us to predict. Changes in the prices of our products may adversely affect our operating results.

Continued volatile global financial and geopolitical conditions may negatively impact us or our counterparties.

Global financial conditions have been characterized by ongoing volatility. Global financial conditions could suddenly and rapidly destabilize in response to future events, as government authorities may have limited resources to respond to future crises. Global capital markets have continued to display increased volatility in response to global events. Future crises may be precipitated by any number of causes, including natural disasters, geopolitical instability, civil unrest, changes to energy prices or sovereign defaults. Ongoing geopolitical challenges such as the Ukraine-Russia war, conflict in the Middle East, tensions between the United States and China, imposition of new tariffs by the U.S. government and related countermeasures and other proposed changes to international trade policies have contributed to volatility in global financial conditions.

The United States of America has recently enacted and proposed to enact significant new tariffs on Canada, China and other countries and certain of the countries have enacted countermeasures. These and related developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions, the stability of global financial markets and the price and demand for iron ore. The economic impact of tariffs and countermeasures on the Canadian, American and global economy could result in increased volatility in commodity prices and negatively impact capital markets and the operations of the iron ore mine underlying our royalty interest, which may negatively impact our business, results of operations, cash flows and financial condition.

We may face a lack of suitable acquisition, merger or other proprietary investment candidates, which may limit our growth.

In order to grow our business, we may seek to acquire, merge with or invest in new companies or opportunities. Our failure to make acquisitions or investments may limit our growth. In pursuing acquisition and investment opportunities, we face competition from other companies having similar growth and investment strategies, many of which may have substantially greater resources than us. Competition for these acquisitions or investment targets could result in increased acquisition or investment prices, higher risks and a diminished pool of businesses, services or products available for acquisition or investment.

We manage transaction risks through allocating and monitoring our capital investments in circumstances where the risk to our capital is minimal, carefully screening clients and transactions and engaging qualified personnel to manage transactions. Nevertheless, transaction risks can arise from our proprietary investing activities. These risks include market and credit risks associated with our operations. We intend to make investments in highly unstructured situations and in companies undergoing severe financial distress and such investments often involve severe time constraints. These investments may expose us to significant transaction risks. An unsuccessful investment may result in the total loss of such investment and may have a material adverse effect on our business, results of operations, financial condition and cash flow.

The operation of the iron ore mine underlying our royalty interest is generally determined by a third-party operator and we currently have no decision-making power as to how the property is operated. In addition, we have no or very limited access to technical or geological data respecting the mine, including as to mineralization or reserves. The operator’s failure to perform or other operating decisions could have a material adverse effect on our revenue, results of operations and financial condition.

The operator of the iron ore mine underlying our royalty interest generally has the power to determine the manner in which the property is operated. The interests of the operator and our interests may not always be aligned. Our inability to control the operations of the mine can adversely affect our profitability, results of operations and financial condition. In addition, we have no or very limited access to technical or geological data respecting the mine, including as to mineralization and reserves.

To the extent grantors of royalties and other interests do not abide by their contractual obligations, we may be forced to take legal action to enforce our contractual rights. Should any decision with respect to such action be determined adversely to us, such decision may have a material adverse effect on our profitability, results of operations and financial condition.

In addition, we have no or very limited access to technical or geological data relating to the mine and operations underlying our interest, including reserves data. Accordingly, we can provide no assurances as to the level of reserves at the mine. If the operator determines there are insufficient reserves to economically operate the mine, it may abandon, scale back or cease operations, which could have a material adverse effect on our profitability, results of operations and financial condition.

Our activities are subject to counterparty risks associated with the performance of obligations by our counterparties.

Our business is subject to commercial risks, which include counterparty risk, such as failure of performance by our counterparties. We seek to reduce the risk of non-performance by requiring credit support from creditworthy financial institutions where appropriate. We also attempt to reduce the risk of non-payment by customers or other counterparties by imposing limits on open accounts extended to creditworthy customers and imposing credit support requirements for other customers. Nevertheless, we are exposed to the risk that parties owing us or our clients and other financial intermediaries may default on their obligations to us due to bankruptcy, lack of liquidity, operational failure or other reasons. These counterparty obligations may arise, for example, from placing deposits, the extension of credit or guarantees in trading and investment activities and participation in payment, securities and supply chain transactions on our behalf and as an agent on behalf of our clients. If any such customers or counterparties default on their obligations, our business, results of operations, financial condition and cash flow could be adversely affected.

In addition, we evaluate the credit risk in respect of accounts receivable and other amounts owed to us by counterparties, including loss allowances. We may recognize losses on such amounts where, based on such evaluations, we determine that the related credit risk has increased significantly. Furthermore, while we take steps to mitigate such credit risks, our actual losses on such balances may differ from our assessments and currently anticipated loss allowances and, as a result, we may recognize impairments in the future.

Our risk management strategies may leave us exposed to unidentified or unanticipated risks that could impact our risk management strategies in the future and could negatively affect our results of operations and financial condition.

We use a variety of instruments and strategies to manage exposure to various types of risks. For example, we may use derivative foreign exchange contracts to manage our exposure and our clients’ exposure to foreign currency exchange rate risks. If any of the variety of instruments and strategies we utilize to manage our exposure to various types of risk are not effective, we may incur losses. Many of our strategies are based on historical trading patterns and correlations. However, these strategies may not be fully effective in mitigating our risk exposure in all market environments or against all types of risk. Unexpected market developments may affect our risk management strategies and unanticipated developments could impact our risk management strategies in the future.

If the fair values of our long-lived assets or their recoverable amounts fall below our carrying values, we would be required to record non-cash impairment losses that could have a material impact on our results of operations.

We review the carrying value of long-lived assets for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Should the markets for our products deteriorate, should we decide to invest capital differently or should other cash flow assumptions change, it is possible that we will be required to record non-cash impairment losses in the future that could have a material adverse effect on our results of operations.

A significant portion of our revenue comes from our iron ore royalty interest, which means that adverse developments at this project could have a more significant or lasting impact on our results of operations than if our revenue was less concentrated.

Approximately 57% of our revenue for the year ended December 31, 2024 came from our royalty interest in the Scully iron ore mine (the “Scully Mine”). We expect this interest to continue to represent a significant portion of our revenue going forward. This concentration of revenue could mean that adverse developments, including any adverse decisions made by the operator thereof could have a more significant or longer-term impact on our results of operations than if our revenue was less concentrated.

The value and revenue from our royalty interest are subject to many of the risks faced by the operator of the underlying project.

Our royalty interest generally generates revenue when the operator of the underlying project generates meaningful production. Ongoing revenue from our interest is dependent on the operator achieving sustained production levels. As such, we are subject to the risk factors applicable to the owners and operators of mining projects.

We are also subject to business risks that may impact the operator of the project underlying our royalty interest, including: failures to execute its business plans; any inability to obtain necessary financing on acceptable terms or at all, to finance operations; changes in mining taxes; litigation risks; permitting risks; title risks; general market risks and operational disruptions. These risks and others consistently faced by mine operators may adversely impact the value of our royalty and our financial results and position.

Mineral development and production generally involves a high degree of risk. Such operations are subject to all of the hazards and risks normally encountered in the exploration, development and production of metals, including weather related events, unusual and unexpected geology formations, seismic activity, environmental hazards and the discharge of toxic chemicals, explosions and other conditions involved in the drilling, blasting and removal of material, any of which could result in damage to, or destruction of, mines and other producing facilities, damage to property, injury or loss of life, environmental damage, work stoppages, delays in exploration, development and production, increased production costs and possible legal liability. Any of these hazards and risks and other acts of God could shut down such activities temporarily or permanently. Mineral development and production is subject to hazards such as equipment failure or failure of retaining dams around tailings disposal areas, which may result in environmental pollution and consequent liability for the owners or operators thereof. The exploration for, and development, mining and processing of, mineral deposits involves significant risks that even a combination of careful evaluation, experience and knowledge may not eliminate.

Derivative transactions may expose us to unexpected risk and potential losses.

We, from time to time, enter into derivative transactions that require us to deliver to the counterparty an underlying security, loan or other obligation in order to receive payment. Such derivative transactions may expose us to unexpected market, credit and operational risks that could cause us to suffer unexpected losses. Severe declines in asset values, unanticipated credit events or unforeseen circumstances may create losses from risks not appropriately taken into account in the structuring and/or pricing of a derivative transaction.

The operations of our banking subsidiary are subject to regulation, which could adversely affect our business and operations.

The operations of our regulated bank subsidiary, referred to as the “Bank”, are subject to a number of directives and regulations, which materially affect our businesses. The statutes, regulations and policies to which we are subject may be changed at any time. In addition, the interpretation and the application by regulators of the laws and regulations to which we are subject may also change from time to time. Extensive legislation affecting the financial services industry has recently been adopted in Europe that directly or indirectly affects our business and regulations are in the process of being implemented. The manner in which those laws and related regulations are applied to the operations of credit institutions is still evolving. Any legislative or regulatory actions and any required changes to our business operations resulting from such legislation and regulations could result in significant loss of revenue, limit our ability to pursue business opportunities in which we might otherwise consider engaging or provide certain products and services, affect the value of assets that we hold, require us to increase our prices and therefore reduce demand for our financial products, impose additional compliance and other costs on us or otherwise adversely affect our businesses. Accordingly, there can be no assurance that future changes in regulations or in their interpretation or application will not adversely affect us. Please see “Item 4: Information on the Company – B. Business Overview – Regulation” for further information.

Further, the operations of our Bank may involve transactions with counterparties in the financial services industry, including commercial banks, investment banks and other institutional clients. Defaults by, and even rumors or questions about the solvency of certain financial institutions and the financial services industry generally, have led to market-wide liquidity problems and could lead to losses or defaults by other institutions. We may enter into transactions that could expose us to significant credit risk in the event of default by one of our significant counterparties. A default by a significant financial counterparty, or liquidity problems in the financial services industry generally, could have a material adverse effect on us.

Any failure to remain in compliance with sanctions, anti-money laundering laws or other applicable regulations in the jurisdictions in which we operate could harm our reputation and/or cause us to become subject to fines, sanctions or legal enforcement, which could have an adverse effect on our business, financial condition and results of operations.

Our business has adopted policies and procedures respecting compliance with sanctions and anti-money laundering laws and we have adopted various policies and procedures to ensure compliance with specific laws applicable to it, including internal controls and “know-your-customer” procedures aimed at preventing money laundering and terrorism financing; however, participation of multiple parties in any given transaction can make the process of due diligence difficult. Further, because our Bank’s activities can be more document-based than other banking activities, it is susceptible to documentary fraud, which can be linked to money laundering, terrorism financing, illicit activities and/or the circumvention of sanctions or other restrictions (such as export prohibitions, licencing requirements or other trade controls). While we are alert to high-risk transactions, we are also aware that efforts, such as forgery, double invoicing, partial shipments of goods and use of fictitious goods may be used to evade applicable laws and regulations. If our policies and procedures are ineffective in preventing third parties from using our finance operations as a conduit for money laundering or terrorism financing without our knowledge, our reputation could suffer and/or we could become subject to fines, sanctions or legal action (including being added to any “blacklists” that would prohibit certain parties from engaging in transactions with us, including our banking subsidiary), which could have an adverse effect on our business, financial condition and results of operations. In addition, amendments to sanctions, anti-money laundering laws or other applicable laws or regulations in countries in which we operate could impose additional compliance burdens on our operations.

Fluctuations in interest rates and foreign currency exchange rates may affect our results of operations and financial condition.

Fluctuations in interest rates may affect the fair value of our financial instruments sensitive to interest rates. An increase or decrease in market interest rates may result in changes to the fair value of our fixed interest rate financial instrument liabilities, thereby resulting in a reduction in the fair value of our equity. Similarly, fluctuations in foreign currency exchange rates may affect the fair value of our financial instruments sensitive to foreign currency exchange rates.

Limitations on our access to capital could impair our liquidity and our ability to conduct our business.

Liquidity, or ready access to funds, is essential to companies engaged in our business. Failures of financial firms have often been attributable in large part to insufficient liquidity. Liquidity is of particular importance to our merchant banking business and perceived liquidity issues may affect our clients’ and counterparties’ willingness to engage in transactions with us. Our liquidity could be impaired due to circumstances that we may be unable to control, such as a general market disruption or an operational problem that affects our clients, counterparties, our lenders or us. Further, our ability to sell assets may be impaired if other market participants are seeking to sell similar assets at the same time.

We may require new capital to grow our business and there are no assurances that capital will be available when needed, if at all. It is likely such additional capital will be raised through the issuance of additional equity, which would result in dilution to our shareholders. A failure to obtain such additional capital could delay our ability to pursue our business plans in the future and adversely affect our future operations.

We may substantially increase our debt in the future.

It may be necessary for us to obtain financing with banks or financial institutions to provide funds for working capital, capital purchases, potential acquisitions and business development. Interest costs associated with any debt financing may adversely affect our profitability. Further, the terms on which amounts may be borrowed – including standard financial covenants regarding the maintenance of financial ratios, the prohibition against engaging in major corporate transactions or reorganizations and the payment of dividends – may impose additional constraints on our business operations and our financial strength.

As a result of our global operations, we are exposed to political, economic, legal, operational and other risks that could adversely affect our business, results of operations, financial condition and cash flow.

In conducting our business in major markets around the world, we are subject to political, economic, legal, operational and other risks that are inherent in operating in other countries. These risks range from difficulties in settling transactions in emerging markets to possible nationalization, expropriation, price controls, other restrictive governmental actions, and terrorism. We also face the risk that exchange controls or similar restrictions imposed by foreign governmental authorities may restrict our ability to convert local currency received or held by us in their countries into Canadian dollars, U.S. dollars, Euros or other hard currencies or to take those other currencies out of those countries. If any of these risks become a reality, our business, results of operations, financial condition and cash flow could be negatively impacted.

As we operate internationally, we are subject to the United States’ Foreign Corrupt Practices Act of 1977 and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by the United States and other business entities that have securities registered in the United States for the purpose of obtaining or retaining business. We have operations and agreements with third parties in countries known to experience corruption. Further international expansion may involve more exposure to such practices. Our activities in these countries create the risk of unauthorized payments or offers of payments by our employees or consultants that could be in violation of various laws including the Foreign Corrupt Practices Act of 1977, even though these parties are not always subject to our control. It is our policy to implement safeguards to discourage these practices by our employees and consultants. However, our existing safeguards and any future improvements may prove to be less than effective and our employees or consultants may engage in conduct for which we might be held responsible. Violations of the Foreign Corrupt Practices Act of 1977 may result in criminal or civil sanctions and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition.

We are exposed to litigation risks in our business that are often difficult to assess or quantify and we could incur significant legal expenses every year in defending against litigation.

We are exposed to legal risks in our business and the volume and amount of damages claimed in litigation against financial intermediaries are increasing. These risks include potential liability for advice we provide to participants in corporate transactions and disputes over the terms and conditions of complex trading arrangements. We also face the possibility that counterparties in complex or risky trading transactions will claim that we improperly failed to inform them of the risks involved or that they were not authorized or permitted to enter into such transactions with us and, accordingly, that their obligations to us are not enforceable. During a prolonged market downturn, we expect these types of claims to increase. We are also exposed to legal risks in our merchant banking and proprietary investing activities.

We seek to invest in undervalued businesses or assets often as a result of financial, legal, regulatory or other distress affecting them. Investing in distressed businesses and assets can involve us in complex legal issues relating to priorities, claims and other rights of stakeholders. These risks are often difficult to assess or quantify and their existence and magnitude often remains unknown for substantial periods of time. We may incur significant legal and other expenses in defending against litigation involved with any of these risks and may be required to pay substantial damages for settlements and/or adverse judgments. Substantial legal liability or significant regulatory action against us could have a material adverse effect on our financial condition and results of operations.

We rely significantly on the skills and experience of our executives and the loss of any of these individuals may harm our business.

Our future success depends to a significant degree on the skills, experience and efforts of our executives and the loss of their services may compromise our ability to effectively conduct our business. We do not maintain “key person” insurance in relation to any of our employees.

The loss of any of our management personnel could negatively affect our business operations. From time to time, we will also need to identify and retain additional skilled management and specialized technical personnel to efficiently operate our business. The competition for such persons is intense. Recruiting and retaining qualified personnel is critical to our success and there can be no assurance of our ability to attract and retain such personnel. If we are not successful in attracting and retaining qualified personnel, our ability to execute our business model and strategy could be affected, which could have a material adverse impact on our profitability, results of operations and financial condition.

We face various risks related to health epidemics, pandemics and similar outbreaks, which could have material adverse effects on our business, results of operations or financial position.

Health epidemics, pandemics and similar outbreaks could cause significant volatility and uncertainty in the global economy and financial markets, supply chain issues, labor shortages, and declines in metal prices, and such events could adversely affect the operations at the project underlying our royalty interest or our merchant banking operations. The effects of health epidemics, pandemics and similar outbreaks will ultimately depend on many factors that are outside of our control (including the severity and duration of such events and government and operator actions in response to such events) and could materially and adversely impact our business, results of operations or financial position.

Strategic investments or acquisitions and joint ventures, or our entry into new business areas, may result in additional risks and uncertainties in our business.

We may make strategic investments and acquisitions or joint ventures and similar transactions in the future. When we make strategic investments or acquisitions or enter into joint ventures, we expect to face numerous risks and uncertainties in combining or integrating the relevant businesses and systems, including the need to combine accounting and data processing systems and management controls and to integrate relationships with customers and business partners. The costs of integrating acquired businesses (including restructuring charges associated with the acquisitions, as well as other related costs, such as accounting, legal and advisory fees) could significantly impact our operating results.

Although we perform due diligence on the businesses we purchase, in light of the circumstances of each transaction, an unavoidable level of risk remains regarding the actual condition of these businesses. We may not be able to ascertain the value or understand the potential liabilities of the acquired businesses and their operations until we assume operating control of these businesses.

Furthermore, any acquisitions of businesses or facilities could entail a number of risks, including, among others: problems with the effective integration of operations; inability to maintain key pre-acquisition business relationships; increased operating costs; exposure to substantial unanticipated liabilities; difficulties in realizing projected efficiencies, synergies and cost savings; the risks of entering markets in which we have limited or no prior experience; and the possibility that we may be unable to recruit additional managers with the necessary skills to supplement the management of the acquired businesses.

In addition, geographic and other expansions, acquisitions or joint ventures may require significant managerial attention, which may be diverted from our other operations. If we are unsuccessful in overcoming these risks, our business, financial condition or results of operations could be materially and adversely affected.

Tax audits or disputes, or changes in the tax laws applicable to us, could materially increase our tax payments.

We exercise significant judgment in calculating our provision for income taxes and other tax liabilities. Although we believe our tax estimates are reasonable, many factors may affect their accuracy. Applicable tax authorities may disagree with our tax treatment of certain material items potentially causing an increase in tax liabilities. Due to the size, complexity and nature of our operations, various tax matters and litigation are outstanding from time to time, including relating to our former affiliates. Currently, based upon information available to us, we do not believe any such matters would have a material adverse effect on our financial condition or results of operations. However, due to the inherent uncertainty, we cannot provide certainty as to their outcome. If our current assessments are materially incorrect or if we are unable to resolve any of these matters favourably, there may be a material adverse impact on our financial performance, cash flows or results of operations.

Furthermore, changes to existing laws may also increase our effective tax rate. A substantial increase in our tax burden could have an adverse effect on our financial results. Please see “Item 8: Financial Information – A. Consolidated Statements and Other Financial Information” for further information.

Restrictions on the remittance of Renminbi into and out of China and governmental control of currency conversion may limit our ability to pay dividends and other obligations, and affect the value of your investment.

A portion of our assets held for sale consists of cash held in China in Renminbi, referred to as “RMB”. The government of the People’s Republic of China, referred to as the “PRC”, imposes controls on the convertibility of the RMB into foreign currencies and the remittance of currency out of the PRC. We may convert a portion of our revenues held by our subsidiary in the PRC into other currencies to meet our foreign currency obligations. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiary to remit sufficient foreign currency to pay dividends or other payments to us, or otherwise satisfy its foreign currency denominated obligations.

Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval of the PRC State Administration of Foreign Exchange, referred to as “SAFE”, as long as certain routine procedural requirements are fulfilled. However, approval from or registration with competent government authorities is required where the RMB is to be converted into foreign currency and remitted out of the PRC to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to utilize such funds for purposes outside of the PRC.

Failures or security breaches of our information technology systems could disrupt our operations and negatively impact our business.

We use information technologies, including information systems and related infrastructure as well as cloud applications and services to store, transmit, process and record sensitive information, including employee information and financial and operating data, communicate with our employees and business partners and for many other activities related to our business. Our business partners, including operating partners, suppliers, customers and financial institutions, are also dependent on digital technology. Some of these business partners may be provided limited access to our sensitive information or our information systems and related infrastructure in the ordinary course of business.

Despite security design and controls, our information technology systems, and those of our third-party partners and providers, may be vulnerable to a variety of interruptions, including during the process of upgrading or replacing software, databases or components thereof, natural disasters, terrorist attacks, telecommunications failures, computer viruses, cyber-attacks, the activities of hackers, unauthorized access attempts and other security issues or may be breached due to employee error, malfeasance or other disruptions. Any such interruption or breach could result in operational disruptions or the misappropriation of sensitive data that could subject us to civil and criminal penalties, litigation or have a negative impact on our reputation. There can be no assurance that such disruptions or misappropriations and the resulting repercussions will not negatively impact our cash flows and materially affect our results of operations or financial condition.

General Risks Faced by Us

Investors’ interests may be diluted and investors may suffer dilution in their net book value per share if we issue additional shares or raise funds through the sale of equity securities.

Our constating documents authorize the issuance of our Common Shares and preference shares, issuable in series. In the event that we are required to issue any additional shares or enter into private placements to raise financing through the sale of equity securities, investors’ interests in us will be diluted and investors may suffer dilution in their net book value per share depending on the price at which such securities are sold. If we issue any such additional shares, such issuances will also cause a reduction in the proportionate ownership of all other shareholders. Further, any such issuance may result in a change of control of our Company.

Certain factors may inhibit, delay or prevent a takeover of our Company, which may adversely affect the price of our Common Shares.

Certain provisions of our charter documents may discourage, delay or prevent third parties from effecting a change of control or changes in our management in a tender offer or otherwise engaging in a merger or similar type of transaction with us. If a change of control or change of management is delayed or prevented, the market price of our Common Shares could decline.

Any future weaknesses or deficiencies or failures to maintain internal controls or remediate weaknesses could impair our ability to produce accurate and timely financial statements.

If material weaknesses in our internal controls are discovered in the future, our ability to report our financial results on a timely and accurate basis could be impacted in a materially adverse manner, and, as a result, our financial statements may contain material misstatements or omissions. If we cannot maintain and execute adequate internal control over financial reporting that provides reasonable assurance of the reliability of the financial reporting and preparation of our financial statements for external use, we could suffer harm to our reputation, fail to meet our public reporting requirements on a timely basis, cause investors to lose confidence in our reported financial information or be unable to properly report on our business and the results of our operations, and the trading price of our Common Shares could be materially adversely affected.

Investors may face difficulties in protecting their interests, and their ability to protect their rights through United States courts may be limited, because we are incorporated under Cayman Islands law.

We are incorporated under the laws of the Cayman Islands and substantially all of our operations and assets are located outside the United States. Our corporate affairs are governed by our memorandum and articles of association, the Companies Law of the Cayman Islands (2020 Revision), as amended, referred to as the “Cayman Act” and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States.

There is no statutory recognition in the Cayman Islands of judgments obtained in the United States, although the courts of the Cayman Islands will in certain circumstances recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits. In addition, a majority of our directors and officers are nationals and residents of countries other than the United States. The Cayman Islands courts are also unlikely to recognize or enforce against us judgments of courts of the United States based on certain civil liability provisions of U.S. securities laws; and to impose liabilities against us, in original actions brought in the Cayman Islands, based on certain civil liability provisions of U.S. securities laws that are penal in nature.

As a result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States.

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ITEM 4:  INFORMATION ON THE COMPANY

A. History and Development of the Company

We are a company organized under the Cayman Act that was incorporated on June 5, 2017. Our office is located at c/o Room 2103 Shanghai Mart Tower, 2299 Yan An Road West, Changning District, Shanghai China 200336, and its telephone number is +1 844 331 3343. Our registered office is located at P. O. Box 31119 Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, KY1 – 1205 Cayman Islands. Our website address is www.scullyroyalty.com.

Our core asset is a net revenues royalty interest in the Scully Mine located in the Province of Newfoundland and Labrador, Canada. The royalty rate under this interest is 7.0% on iron ore shipped from the mine and 4.2% on iron ore shipped from tailings and other disposed materials. See “- B. Business Segments – Royalty” and “– D. Property, Plants and Equipment”.

We currently have two primary operating segments: (i) Royalty, which includes our interest in an iron ore mine; and (ii) Merchant Banking, sometimes referred to as “financial services”, which includes our merchant banking activities. We also have an “All Other” segment which includes other assets unrelated to our primary segments and otherwise not individually material. See “All Other” below for further information. The changes in segments resulted from dispositions of entities and businesses in previous years. Results for prior periods have been recast herein to reflect this change in presentation.

We file reports and other information with the Securities and Exchange Commission, referred to as the “SEC”. The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. Our filings with the SEC are available to the public over the internet at such website at http://www.sec.gov.

Please see “B. Business Overview” for further information regarding our business and recent developments.

B. Business Overview

The following is a brief description of our business and recent activities.

Recent Developments

Scully Mine Updates

The mine underlying our royalty interest produces a high-grade ore in excess of 65% iron content that also has other favourable characteristics, such as relatively low contaminant ratios. Globally, steelmakers value high grade iron ore with low contaminants (such as silica, alumina, and phosphorus) because they improve environmental and financial performance through more efficient raw material utilization, higher plant yields and lower emissions. Therefore, it is common and generally expected for 65% Fe iron ore, including the Scully Mine’s product, to sell 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 following table sets forth the total iron ore products (which include pellets, chips and concentrates) shipped from the mine based upon the amounts reported to us by the Scully Mine for the periods indicated:

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Production in 2024 was impacted by, among other things, wildfires in the Province of Newfoundland and Labrador, Canada in the summer of 2024.

In October 2023, the operator of the Scully Mine commenced proceedings under the Companies’ Creditors Arrangement Act (the “CCAA”). In September, 2024, it announced the closing of a transaction under the CCAA process led by an investor group including Cargill Incorporated, Millstreet Capital Management and O’Brien-Staley Partners. The transaction included a US$250 million equity injection, a strengthened balance sheet and an improved business plan. It also disclosed that it had entered into new union, sales offtake and rail transport arrangements.

Cash Dividend Policy

Our board of directors has adopted a dividend policy that is intended to maximize potential future dividends to holders of our Common Shares.

Based upon a review of our financial position, operating results, ongoing working capital requirements and other factors, our board of directors may from time to time and if deemed advisable by it, declare and pay dividends to holders. The timing, payment and amount of any dividends paid on our Common Shares may be determined by our board of directors from time to time.

During the year ended December 31, 2023, a dividend of $0.23 (US$0.17) per common share was paid in U.S. dollars on May 19, 2023 to shareholders of record on May 9, 2023.

On December 31, 2024, we announced that our board of directors declared a dividend of $0.37 (US$0.26) per common share paid on February 21, 2025 to shareholders of record on January 24, 2025.

The declaration, timing, record date and payment of future dividends will depend on, among other things, royalty payments received.

Change of Auditor

Effective December 5, 2024, AOGB CPA Limited was appointed our auditor. AOGB CPA is an independent registered public accounting firm headquartered at Suite 2501-3, Tesbury Centre, 28 Queen’s Road East, Admiralty, Hong Kong, Hong Kong. See “Item 16F: Change in Registrant’s Certifying Accountant”.

Rationalization of Non-Core Assets

Our board of directors has approved a plan to rationalize various underperforming assets to focus on our core asset, our iron ore royalty. To this end, in 2024, we determined to proceed towards the rationalization of certain assets and liabilities in our All Other segment. This process is ongoing and we currently believe it will be completed in 2025. See “Item 5. - Operating and Financial Review and Prospects – Rationalization of Non-Core Assets”.

Business Segments

Effective from January 1, 2024, we have revised our operating segments such that we have two primary operating segments, being, (i) Royalty, which includes our interest in an iron ore mine; and (ii) Merchant Banking, which includes merchant banking activities. As a result, we no longer present an Industrial segment in our financial statements. The assets and liabilities underlying this former segment are now reflected in our All Other segment. See “Item 5. - Operating and Financial Review and Prospects – Rationalization of Non-Core Assets”.

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We also have an “All Other” segment which includes other assets unrelated to our primary segments and otherwise not individually material. See “All Other” below for further information. The changes in segments resulted from dispositions of entities and businesses in previous years. Results for prior periods have been recast herein to reflect this change in presentation.

Royalty

We hold a net revenues royalty interest in the Scully Mine located in the Province of Newfoundland and Labrador, Canada. The royalty rate under this interest is 7.0% on iron ore shipped from the mine and 4.2% on iron ore shipped from tailings and other disposed materials.

In 2024, approximately 57% of our total revenues were derived from our royalty interest. As at December 31, 2024, our total assets were $438.1 million, of which $192.1 million was represented by our interest in the underlying iron ore mine. Please see Note 12 to our audited consolidated financial statements for the year ended December 31, 2024 for further information.

The operator of the mine has disclosed that the mine historically extracted approximately 11.8 million tonnes of raw iron per year from which approximately 4.1 million metric tonnes of iron concentrate were produced at an onsite milling facility. It further disclosed that upon-reactivation annual production capacity targeted a capacity of 6.25 million metric tonnes of iron concentrate, with production ranging from 5.80 million to 7.55 million metric tonnes over the subsequent years. Iron concentrate is transported by rail to the port facilities at Point Noire, Quebec, Canada, where it is unloaded, stockpiled and loaded on vessels for sale to the seaborne market.

Under the terms of the sub-lease, we are entitled to minimum royalty payments of $3.25 million per year, payable on a quarterly basis, which quarterly payments may be credited towards earned royalties relating to the same calendar year.

In October 2023, the operator of the Scully Mine commenced proceedings under the CCAA. In September 2024, it announced the closing of a transaction under the CCAA process led by an investor group including Cargill Incorporated, Millstreet Capital Management and O’Brien-Staley Partners. The transaction included a US$250 million equity injection, a strengthened balance sheet and an improved business plan. It also disclosed that it had entered into new union and rail transport arrangements. See “– Recent Developments - Scully Mine Update” for further information.

Merchant Banking

Our Merchant Banking segment, also referred to as “financial services”, comprises regulated merchant banking in Europe, including the activities of the Bank.

The Bank does not engage in general retail or commercial banking, but provides specialty banking services, focused on merchant banking, to our customers, suppliers and group members. Generally, the Bank earns fees from provisions of a range of financial and consultancy services to the customers and investment income.

In addition, we hold interests in two industrial real estate parks in Europe as investment property.

All Other

The All Other segment includes our corporate and small entities whose quantitative amounts generally are not expected to exceed 10% of any of the following: (a) our reported revenue, including both sales to external customers and intersegment sales or transfer; (b) the greater, in absolute amount, of our (i) combined reported profit of all operating segments that did not report a loss and (ii) combined reported loss of all operating segments that reported a loss; or (c) our total assets. Actual outcome may occasionally exceed these 10% thresholds, though the excess amounts are not expected to be material.

Competitive Conditions

Our business is intensely competitive and we expect it to remain so. We operate in a highly competitive environment in most of our markets and we face competition in all of our activities, principally from international banks, the majority of which are European or North American regulated banks, in our finance and fee-generating activities. Such competition may have the effect of reducing spreads on our financing activities.

Our business is small compared to our competitors in the sector. Many of our competitors have far greater financial resources, a broader range of products and sources of supply, larger customer bases, greater name recognition and marketing resources, a larger number of senior professionals to serve their clients’ needs, greater global reach and more established relationships with clients than we do. These competitors may be better able to respond to changes in business conditions, compete for skilled professionals, finance acquisitions, fund internal growth and compete for market share generally.

We believe that our experience and operating structure permit us to respond more rapidly to our clients’ needs than many of our larger competitors. These traits are important to small and mid-sized business enterprises, many of which do not have large internal corporate finance departments to handle their capital requirements. We develop a partnership approach to assist our clients. This often permits us to develop multiple revenue sources from the same client. For example, we may commit our own capital to make a proprietary investment in its business or capital structure.

Regulation

Our operations are international in nature and are subject to the laws and regulations of a number of international jurisdictions, as well as oversight by regulatory agencies and bodies in those jurisdictions.

The operator of the mine that is the subject to our iron ore royalty interest must comply with numerous environmental, mine safety, land use, waste disposal, remediation and public health laws and regulations promulgated by federal, provincial and local governments in Canada. Although we, as a royalty owner, are not responsible for ensuring compliance with these laws and regulations, failure by the operator to comply with applicable laws, regulations and permits can result in injunctive action, orders to suspend or cease operations, damages, and civil and criminal penalties on the operators, which could have a material adverse effect on our results of operations and financial condition.

In particular, the banking industry is subject to extensive regulation and oversight. The operations of our Bank are subject to the regulations and directives issued by governments. The Bank is subject to direct supervision by direct and indirect financial regulators in Europe. There are various regulations and guidelines that the Bank needs to adhere to but the most noticeable ones relate to capital requirements, liquidity and the funding and the Anti-Money Laundering and Anti-Terrorist Financing. As a Maltese credit institution, the Bank is subject to the Capital Requirements Directive and Regulatory Frameworks, referred to as the “CRD and CRR Framework” (as updated from time to time), through which the European Union implements the Basel Capital reforms. The CRD and CRR Framework, among other things, impose minimum statutory capital requirements based on risk adjusted credit exposures and requires extensive regulatory reporting on own funds, large exposures, liquidity requirements and various other regulatory requirements. Large exposures consist of credit exposures to a client or group of connected clients in excess of 10% of the Bank’s statutory capital base and such large exposures cannot exceed 25% of the Bank’s statutory capital base, after taking into account eligible credit risk mitigation. The main liquidity requirements imposed by the CRD and CRR Framework are the liquidity coverage ratio, referred to as “LCR”, which refers to the proportion of highly liquid assets held by the Bank to ensure its ongoing ability to meet short-term liquidity obligations. The Bank must maintain a minimum statutory LCR of 100%. The CRD and CRR Framework also establish a minimum Net Stable Funding Ratio (referred to “NSFR”) of 100%. Unlike the LCR, the NSFR is a liquidity standard requiring the Bank to hold enough stable funding to cover the duration of its long-term assets.

The Bank is currently working on the requirements of the revised CRD and CRR Framework, commonly referred to as the CRD6/CRR3 package, which will be wide-ranging, but is expected to include core Basel III components as well as market risk. However, the European Commission also introduces further initiatives in the package, which include: the revision of certain credit risk-weights used to determine the Bank’s statutory capital adequacy ratio; new capital calculation requirements relating to operational risk; governance and reporting requirements relating to environmental, social and governance (ESG) risks; and digital operational resilience (DORA).

A portion of our assets held for sale as at December 31, 2024 is in China in RMB. Under the 2008 Foreign Currency Administration Rules, if documents certifying the purposes of the conversion of RMB into foreign currency are submitted to the relevant foreign exchange conversion bank, the RMB may be convertible for current account items, including the distribution of dividends, interest and royalty payments, and trade and service-related foreign exchange transactions. Conversion of RMB for capital account items, such as direct investment, loans, securities investment and repatriation of investment, however, is subject to the approval of the government of SAFE and its local counterparts.

Under the 1996 Administration Rules of the Settlement, Sale and Payment of Foreign Exchange, foreign-invested enterprises may only buy, sell and/or remit foreign currencies at banks authorized to conduct foreign exchange business after providing valid commercial documents and, in the case of capital account item transactions, obtaining approval from SAFE or its local counterparts. Capital investments by PRC entities outside of China, after obtaining the required approvals from the relevant approval authorities, such as the Ministry of Commerce and the National Development and Reform Commission or their local counterparts, are also required to register with SAFE or its local counterparts.

C. Organizational Structure

The following table describes our material subsidiaries as at December 31, 2024, their respective jurisdictions of organization and our interest in respect of each subsidiary. The table excludes subsidiaries that only hold inter-company assets and liabilities and do not have active businesses or whose results and net assets do not materially impact our consolidated results and net assets.

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Please see Note 27 to our audited consolidated financial statements for the year ended December 31, 2024 for further information.

D. Property, Plants and Equipment

We have offices at c/o Room 2103 Shanghai Mart Tower, 2299 Yan An Road West, Changning District, Shanghai China 200336.

We believe that our existing facilities are adequate for our needs through the end of the year ending December 31, 2024. Should we require additional space at that time or prior thereto, we believe that such space can be secured on commercially reasonable terms.

Royalty Interest

Our core asset is a net revenues royalty interest in the Scully iron ore mine located in the Province of Newfoundland and Labrador, Canada. The royalty rate under this interest is 7.0% on iron ore shipped from the mine and 4.2% on iron ore shipped from tailings and other disposed materials. Under the terms of the sub-lease, we are entitled to minimum payments of $3.25 million per year. The mine site is located approximately three kilometers west of the town of Wabush and is connected by rail access to the Port of Sept-Îles, Quebec, Canada.

The royalty is payable by the operator to us pursuant to a mining sub-lease related to the lands on which the mine is situated. This lease commenced in 1956 and expires in 2055.

Pursuant to an Order of the Ontario Superior Court of Justice dated October 10, 2023, the operator of the Scully Mine underlying our royalty interest was granted protection under CCAA. A sales and solicitation process was initiated pursuant to the CCAA process on October 30, 2023. In September, 2024, it announced the closing of a transaction under the CCAA process led by an investor group including Cargill Incorporated, Millstreet Capital Management and O’Brien-Staley Partners. The transaction included a $250 million equity injection, a strengthened balance sheet and an improved business plan. It also disclosed that it had entered into new union and rail transport arrangements. See “– B. Business Overview – Recent Developments” for further information.

Iron ore is primarily used to make steel, which is considered to be a critical commodity for global economic development. As such, the demand and consequently the pricing of iron ore are dependent upon the raw material requirements of integrated steel producers. Demand for blast furnace steel is in turn cyclical in nature and is influenced by, among other things, the level of global economic activity.

The Scully Mine produces a high-grade ore in excess of 65% iron content that also has other favourable characteristics, such as relatively low contaminant ratios. Globally, steelmakers value high grade iron ore with low contaminants (such as silica, alumina, and phosphorus) because they improve environmental and financial performance through more efficient raw material utilization, higher plant yields, and lower emissions. Therefore, it is common and generally expected for 65% Fe iron ore, including the Scully Mine’s product, to sell 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.

Description of Scully Iron Ore Mine

As we are not the operator and generally not the owner of the property underlying our royalty interest, we have limited or no access to related exploration, development or operational data or to the properties itself. As such, the disclosure herein is based on information publicly disclosed by the operator of the Scully Mine. Although we do not have any knowledge that such information may not be accurate, there can be no assurance that such third-party information is complete or accurate.

The disclosure of scientific and technical information regarding the property underlying our royalty interest contained herein is presented in accordance with subpart 1300 of Regulation S-K under the Exchange Act, referred to as the “SEC Mining Rules”. The SEC Mining Rules requires a registrant that has mining operations to, among other things: (i) obtain a dated and signed “technical report summary” from a qualified person with respect to each material mining property, and (ii) file such technical report summary as an exhibit to the relevant registration statement or other prescribed filing with the SEC. We consider our royalty interest in the Scully mine, being the only mining interest we hold, as our material property for the purposes of the SEC Mining Rules. As we do not operate such property, for the purposes of this Annual Report on Form 20-F, we have relied on the exemption set forth in Item 1302(b)(3)(ii) of the SEC Mining Rules and have not obtained or filed a technical report summary as: (i) obtaining such report would result in an unreasonable burden or expense; and (ii) we have requested such technical report summary from the operators of the Scully mine and were denied the request.

The property information included herein contains information reported by the operator of the Scully mine under Canadian National Instrument 43-101 - Standards of Disclosure for Mineral Projects, referred to as “NI 43-101”. Specifically, unless otherwise stated, the information contained herein has been derived from a technical report prepared for the operator under NI 43-101 titled “Feasibility Study Technical Report – Update, Scully Mine Re-Start Projects, Wabush, Newfoundland & Labrador, Canada” with an effective date of May 31, 2021.

Under the SEC Mining Rules, we may not disclose such Mineral Resource and Mineral Reserve estimates herein unless the operator has filed a Technical Report Summary under Item 1300 of Regulation S-K or unless we have filed a Technical Report Summary containing such estimates. As a result of this requirement and the relief provided to holders of royalties and other similar interests under the SEC Mining Rules, the disclosure contained herein does not include estimates of Mineral Resources or Mineral Reserves that may have been prepared by the operator of the mine underlying our royalty interest.

Certain information regarding the Scully Mine as contemplated under the SEC Mining Rules has not been included herein on the basis that it is unavailable to us in our capacity as a royalty holder on the applicable properties and that obtaining such information would result in an unreasonable burden and expense. Such excluded information includes:

Measurement units presented in this document are metric units and converted to US standard units where applicable. There may be small rounding differences due to unit conversions. Additional specific information on the principal property is available under Material Properties, below.

Summary

The Scully Mine is production stage iron ore mine, which is operated as an open-pit operation. The mine is located in Newfoundland & Labrador, Canada. The mine site includes a concentration plant with a 6.0 million tonnes per year capacity. The geographic location of Scully is set forth below.

Figure 1. Scully Mine Location

Source: Google Earth (March, 2022)

The mine covers a Superior-type banded iron formation of mineralization. Key operating infrastructure at the mine comprises a 6 million tonne per annum iron ore concentrator plant producing iron ore concentrate.

The operator of the mine that is subject to our royalty interest must comply with environmental, mine safety, land use, waste disposal, remediation and public health laws and regulations promulgated by federal, state, provincial and local governments in Canada where we hold an interest. Although we, as a royalty interest owner, are not responsible for ensuring compliance with these laws and regulations, failure by the operator to comply with applicable laws, regulations and permits can result in injunctive action, orders to suspend or cease operations, damages, and civil and criminal penalties on the operators, which could have a material adverse effect on our results of operations and financial condition.

In general, we have no decision-making authority regarding the development or operation of the mineral property underlying our royalty interest. The operator makes all development and operating decisions, including decisions about permitting, feasibility analysis, mine design and mine operation, processing, plant, equipment matters, and temporary or permanent suspension of operations.

Location

Scully is an open-pit mine and mineral processing operation located in the southwest corner of Labrador, in the Province of Newfoundland and Labrador, Canada, at 52°54’26.7” N and 66°54’ 34.6” W. The nearest local communities are the Town of Labrador City (3.5 km or 2.2 miles north), Town of Wabush (2.5 km or 1.6 miles east), and Town of Fermont (Quebec; 18 km or 11 miles southwest). From Wabush, the City of Sept-Îles is located 320 km (or 199 miles) away (on the north shore of the St. Lawrence River), the City of St. John’s 1,200 km (or 746 miles) to the southeast, and the City of Montreal 1,020 km (or 634 miles) to the southwest.

The Scully Mine property lies in the sub-arctic region of northern Canada, in an area of undulating hills with an elevation high of 686 m (2,251 ft) and elevation low of 533 m (1,749 ft). There are several lakes within the mine property area. As for climate, temperatures range from-40°C to 25°C (-40°F to 77°F). In a wet year, Wabush can receive up to 1,185 mm (47 inches) of precipitation (Environment Canada, 2012). In a dry year, Wabush receives only 675 mm (27 inches) of precipitation.

Infrastructure

Access to the Scully Mine site is provided by a four km road from Highway 500. The latter is accessible via Highway 389 from Baie-Comeau on the north shore of the Saint Lawrence River. The Wabush airport is 2 miles or 3 km from the mine site, within the town limits of Wabush.

Rail access from the Scully Mine site to the port at Sept-Îles consists of two separate segments. The first segment uses the QNS&L railway from Wabush to Arnaud Junction in Sept-Îles. From there, the second section is from Arnaud junction to Pointe-Noire (Sept-Îles), property of “Les Chemins de Fer Arnaud”, Sept-Îles, Quebec, where the iron ore concentrate is unloaded, stockpiled, and loaded on sea-going vessels. The second rail segment is owned by the Government of Quebec through the Sociéte du Plan Nord, which acquired these assets from Cliffs Natural Resources, Inc. bankruptcy of Canadian assets. The second segment was owned originally by the Wabush Railway Company Limited.

The Scully Mine site is connected to the Newfoundland & Labrador Hydro electrical network. Electric power is generated at Churchill Falls, 200 km to the east. The Churchill power station has the second largest hydroelectric generating capacity in North America at 5,428 MW installed. An on-site 46-kV electrical grid electrifies the mine area and powers mine equipment and pumping stations.

The mine site contains necessary structures including: mine electrical infrastructure; a maintenance facility with five bays and cranes; warehouses; wash bay; explosive storage; machine shop; dewatering equipment; fuel storage; administration buildings; an iron ore concentrator plant; and required rail load-out and track infrastructure. The concentrator underwent some maintenance and installation of additional processing equipment prior to the restart.

A pumping station and water intake structure located east of the process facility provides water for iron ore beneficiation and potable water consumption.

Area of Interest

The Scully Mine property consists of five Mining Leases; namely Mining Lease Lot No. 1, Lot No. 2, Lot No. 3, Lot No. 4, and the Wabush Mountain Area (Figures 3 and 4). The Scully Mine Royalty pertains only to Newfoundland & Labrador Corp. Ltd. Mining Lease Lot No. 1 (“Mining Lease Lot No. 1”). The industrial site and open pits are located within the Mining Lease Lot No. 1 area, which is 14.43 square km (5.57 square miles or 3,565.73 acres) in area. The surface and mineral rights on this Mining Lease are leased from the Government of Newfoundland and Labrador. This 99-year lease expires in 2055.

Property Description

The Scully Mine is a production stage property consisting of an open pit mine and an iron ore concentrator plant.

The operation consists of a conventional surface mining method using an owner mining approach with electric and diesel hydraulic shovels and mine trucks. The open pit mine is designed with a 12 m to 24 m bench height and pit slopes of 32° to 46°. Mining is carried out by two hydraulic front shovels equipped with 24 m³ (31.3 yard³) buckets. The shovels are matched with a fleet of up to sixteen 211-tonne payload mine haulage trucks.

For the life of mine, the overall strip ratio will be 0.87:1 (waste to ore), with ore transiting through stockpiles for blending purposes and to balance mining and processing plant constraints. Waste rock storage is planned in waste dumps outside the pits and in depleted pits.

Iron ore concentrate is produced by processing iron ore through autogenous grinding mills and gravity and magnetic separation and a drying concentrator plant at a planned rate of up to 2,400 tonnes per hour. The concentrator plant produces iron ore concentrate with a grade of approximately 65.9% Fe, a level that exceeds the industry standard 62% benchmark and high-grade 65% benchmark. The concentrate also has low levels of deleterious elements (including silica and manganese) and very low moisture content.

From the Scully Mine iron concentrator, the iron ore concentrate is rail shipped to the Port of Sept-Îles for loading onto ships and transport overseas. Tacora has an agreement with Cargill, a leading independent iron ore trader, for purchase of 100% of the iron ore concentrate produced by the Scully Mine. Cargill has rolling options to extend this agreement over the life of the Scully Mine. The Scully Mine has a forecast mine life in excess of 25 years.

Tailings from the iron ore processing plant are stored in historical disposal areas to the north and south of the open pits. The tailings are considered low risk of acid generation and relatively coarse, allowing for use as material for future tailings storage area embankments.

Age and Condition of Infrastructure

The Scully Mine and concentrator was originally commissioned in the 1960s. The facilities were reactivated by the current operator in 2019.

Property History

The Scully Mine operated from 1965 to February 2014 with the mining and concentrating at Wabush and the subsequent stage of pelletizing done at Pointe Noire near the port of Sept-Îles, Quebec. Iron deposits were first reported in 1933. In 1956, Picklands began work on the project and started the first intensive geological, metallurgical and economic investigation. A pilot plant was built and successfully produced 100,000 tonnes of iron ore concentrate. From 1965 to 2014, the Scully Mine produced between 2.7 million and 6.1 million tonnes of iron ore concentrate annually. The following chart sets forth shipments of concentrate from the mine (as reported by the respective operators) for the years indicated.

The Scully Mine was operated by Picklands from 1965 to 1986 when Picklands was acquired by Cliffs Natural Resources Inc., who operated it from 1986 until 2014. The current operator acquired the mine in July 2017. It then restarted mining operations and commercial production at the mine, and shipped its first seaborne iron ore concentrate in August 2019. Such feasibility study was not completed under the SEC Mining Rules.

Permitting

The operator has disclosed that it is fully permitted to operate the mine. The most recent overall environmental study completed at the Scully Mine site is the Environmental Assessment Registration submitted by the operator to the Government of Newfoundland and Labrador on September 28, 2017. The Government placed the document on a public notice period, responded to public comments, and released the Scully Mine reactivation project from further environmental assessment on November 21, 2017. Such feasibility study was not completed under the SEC Mining Rules.

Property Geology

The deposit is a Proterozoic age Superior-type banded iron formation. The mine lies within the southern end of the Labrador Trough in Western Labrador. The Labrador Trough comprises a sequence of Proterozoic sedimentary rocks, including iron formations, volcanic rocks and mafic intrusions. The principal iron formation unit, the Sokoman Formation, forms a regionally continuous stratigraphic unit. The Sokoman Formation is more than 300 m thick near the mine and has been subjected to two episodes of folding and metamorphism during the Hudsonian and Greenville Orogenies, resulting in a complex structural pattern in the Wabush area.

Other iron deposits in the area of the Labrador Trough are Bloom Lake, Lac Jeannine, Fire Lake, Mounts Wright and Reed, Luce, and Humphrey. During high‐grade metamorphism, the iron oxides and quartz recrystallized to produce coarse‐grained sugary quartz, magnetite, specular hematite schists (meta‐taconites) that are of improved quality for processing and concentrating.

The deposit consists of folded and faulted stratigraphic beds of iron-bearing units within the Sokoman Iron Formation. The geological understanding of the deposit is based primarily on diamond drilling data and two-dimensional sectional interpretations by the prior operator. The ore minerals are hematite (specularite), magnetite, and martite hematite pseudomorphs after magnetite). The waste minerals are hydrated iron oxides, such as limonite and goethite, and quartz. Manganese oxides also occur in bands or are disseminated throughout the iron-bearing units.

The mine site includes electrical infrastructure, a maintenance facility with five bays and cranes, warehouses, a wash bay, explosive storage, a machine shop, dewatering equipment, fuel storage, administration buildings, a concentrator plant and rail load-out and track infrastructure.

Production

The following table sets forth the total iron ore products shipped from the mine based upon the amounts reported to us by the mine operator in 2024 and 2023:

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Production in 2024 was impacted by, among other things, wildfires in the Province of Newfoundland and Labrador, Canada in the summer of 2024.

Other Interests

We own two industrial real estate parks in Germany, which primarily lease out space for storage and production facilities. One of these parks is located in Arneburg, Germany and is 1,553,113 square meters, currently houses approximately 27 buildings and offers developed industrial and commercial land for greenfield investments as well as warehouses, production halls, workshops and offices. The property has railway, road and harbour connections. The other industrial park is located in Dessau, Germany and is a 109,804 square meter development property that currently houses approximately 21 buildings and offers office and administrative buildings, production halls and warehouses and land for industrial investments. The property has connections to railway and roads. Both of these industrial parks are part of the security package for the €25.0 million in principal amount of bonds issued by a subsidiary in 2019, and to the extent that any sales of these properties, in whole or in part, cause the security to fall below a certain ratio, proceeds of said sale, up to an amount of the collateral shortfall, are required to be placed as cash collateral with the bondholder trustee until maturity.

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ITEM 4A:  UNRESOLVED STAFF COMMENTS

None.

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ITEM 5:  OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion and analysis of our financial condition and results of operations for the years ended December 31, 2024, 2023 and 2022 should be read in conjunction with our audited consolidated financial statements and related notes included elsewhere herein.

General

Our core asset is an interest in a mining sub-lease of the lands upon which the Scully Mine is situated in the Province of Newfoundland and Labrador, Canada. Pursuant to this sub-lease, which expires in 2055, we hold a 7.0% net revenues royalty interest on iron ore shipped from the mine and a 4.2% net revenues royalty interest on iron ore shipped from tailings and other disposed materials. Under the terms of the sub-lease, we are entitled to quarterly minimum royalty payments of $3.25 million per year, which quarterly payments may be credited towards earned royalties relating to the same calendar year.

We specialize in markets that are not adequately addressed by traditional sources of supply and finance, with an emphasis on providing solutions for small and medium sized enterprises. We operate in multiple geographies and participate in industries including manufacturing, natural resources and medical supplies and services.

As a supplement to our operating business, we commit proprietary capital to assets and projects where intrinsic values are not properly reflected. These investments can take many forms, and our activities are generally not passive. The structure of each of these opportunities is tailored to each individual transaction.

Our results of operations have been and may continue to be affected by many factors of a global nature, including economic and market conditions, the availability of capital, the level and volatility of equity prices and interest rates, currency values, asset prices and other market indices, technological changes, the availability of credit, inflation and legislative and regulatory developments. Our results of operations may also be materially affected by competitive factors. Our competitors include firms traditionally engaged in merchant banking such as investment banks, along with other capital sources such as hedge funds, private equity firms and insurance companies on a global basis.

Our results of operations for any particular period may also be materially affected by our realization on proprietary investments. These investments are made to maximize total return through long-term appreciation and recognized gains on divestment. We realize on our proprietary investments through a variety of methods including sales, capital restructuring or other forms of divestment.

As previously announced, our management is committed to a plan to rationalize non-core assets, and substantial progress has been made. These assets have not produced returns commensurate to that of our royalty interest, and our Board of Directors believes that these actions provide compelling benefits to our shareholders and to all aspects and business segments of the Company. It simplifies the Company’s corporate structure by separating its non-strategic assets and allows the independent business lines to focus on pursuing and operating their respective businesses.

Business Environment

Our financial performance is, and our consolidated results in any period can be, materially affected by economic conditions and financial markets generally, including the availability of capital, the availability of credit and the level of market and commodity price volatility. Our results of operations may also be materially affected by competitive factors. Our competitors include firms traditionally engaged in merchant banking as well as other capital sources such as hedge funds and private equity firms and other companies engaged in similar activities in Europe, Asia and globally.

The average price of 62% iron ore, as reported by Platts, was US$109 per tonne in 2024, compared to US$120 per tonne in 2023. Overall, the average iron price for 65% Fe iron ore, as reported by Platts was US$123 per tonne in 2024, compared to US$132 per tonne in 2023.

Our financial performance is, and our consolidated results in any period can be, materially affected by economic conditions and financial markets generally, including the availability of capital, the availability of credit and the level of market and commodity price volatility. Our results of operations in our merchant banking segment may also be materially affected by competitive factors. Our competitors include firms traditionally engaged in merchant banking as well as other capital sources such as hedge funds and private equity firms and other companies engaged in similar activities in Europe, Asia and globally.

We operate internationally and therefore our financial performance and position are impacted by changes in the Canadian dollar, our reporting currency, against the other functional currencies of our international subsidiaries and operations, particularly the Euro. As at December 31, 2024, the Canadian dollar had depreciated by approximately 9% against the Euro from the end of 2023. We recognized a $6.2 million currency translation adjustment gain in accumulated other comprehensive income within equity in 2024, compared to a currency translation adjustment loss of $1.2 million in accumulated other comprehensive income within equity in 2023. In addition, we recognized net losses of $0.8 million on exchange differences on foreign currency transactions in our consolidated statement of operations in 2024, compared to $0.4 million on exchange differences on foreign currency transactions in our consolidated statement of operations in 2023.

Rationalization of Non-Core Assets

As part of our ongoing strategy to streamline our operations and concentrate our efforts on our core asset - our iron ore royalty – in 2024, we initiated a process to rationalize certain underperforming or non-core assets and their associated liabilities classified within our “All Other” segment. This strategic refocusing reflects our intent to simplify our corporate structure, reduce operating complexity, and unlock shareholder value by concentrating capital and management attention on our core asset.

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As a result of this initiative, we determined that the criteria for classification as “held for sale” under IFRS 5 were met with respect to certain assets and related liabilities as at December 31, 2024. As a result, the assets and related liabilities relating to these businesses were classified as held for sale as at December 31, 2024.

Our management, when exercising its judgments in terms of the assets’ contribution to net loss, total assets and net assets, concluded that these assets did not constitute a separate major line of business or geographical area of operations. In aggregate, the assets held for sale represented approximately 20% (after recognition of impairment losses) of our consolidated total assets as at December 31, 2024. These assets held for sale generated revenue from third parties of $9.0 million, loss before taxes of $3.3 million and a net loss of $4.5 million in 2024.

The following sets forth a breakdown of the assets held for sale and related liabilities as of December 31, 2024.

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All intercompany assets and liabilities were eliminated in connection with this classification. We recognized a non-cash provision for impairment loss of $18.6 million in connection with the classification of these assets and liabilities as held for sale. The disposal group is presented in our All Other reportable segment.

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In late 2024, we announced that we entered into an agreement to rationalize these assets and liabilities. This transaction is not expected to have any material impact on our net book value. Upon the closing of this transaction as currently anticipated, we expect to recognize approximately $15 million of securities and approximately $55.4 million as an equity method investment. For illustrative purposes, if this rationalization had completed on December 31, 2024, our shareholders’ equity would have remained at approximately $302.3 million.

Results of Operations

The following table sets forth certain selected operating results and other financial information for each of the years ended December 31, 2024, 2023 and 2022:

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Note:

The following table provides a breakdown of revenue for each of the years ended December 31, 2024, 2023 and 2022:

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Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023

The following is a breakdown of our revenue by segment for each of the years indicated:

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In 2024, 64% of our revenues were from the Americas, 22% was from Europe and 14% were from Africa, Asia and other regions. In 2023, 74% of our revenues were from the Americas, 16% was from Europe and 10% were from Africa, Asia and other regions.

Based upon the average exchange rates for 2024, the Canadian dollar was weaker by 2% in value against the Euro compared to the average exchange rates for 2023.

Revenue for 2024 decreased to $35.3 million from $54.9 million in 2023, mainly as a result of the disposition of our energy interests in March 2023 and decreased royalty income in 2024. A customer in the Royalty segment located in Canada represented approximately 57% and 64%, respectively, of our total revenue for the years ended December 31, 2024 and 2023.

Revenue for our Royalty segment for 2024 decreased to $20.1 million from $35.3 million in 2023 primarily as a result of lower production at the mine and volatility in iron ore prices.

Revenue for our Merchant Banking segment for 2024 decreased to $6.2 million from $7.4 million in 2023. The decrease primarily resulted from decreased merchant banking activities.

Revenue for our All Other segment was $9.0 in 2024 compared to $12.2 million in 2023. The decrease primarily resulted from the disposition of hydrocarbon assets in the first half of 2023.

In 2024, total revenues include revenues of $24.3 million from royalty, goods and products and services, of which 83% was from our iron ore royalty and 17% was from energy. In 2023, total revenues included revenues of $43.3 million from royalty, goods and products and services, of which 84% was from our iron ore royalty and approximately 16% was from energy.

Costs of sales and services decreased to $7.1 million in 2024 from $19.1 million in 2023, primarily as a result of a merchant banking gain included in costs of sales and services, a fair value gain on our investment property and the disposition of certain energy assets in March 2023. The following is a breakdown of our costs of sales and services for each of the years indicated:

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We recognized a net fair value gain on investment property of $2.0 million in 2024, compared to a net fair value loss of $0.1 million in 2023. The gain in 2024 primarily resulted from increased industrial real estate pricing in the area and additional activity on our investment property. In 2024, we recognized a gain of $1.2 million in change in fair value of a loan payable measured at FVTPL.

We recognized a net loss on securities primarily relating to trading securities of $0.2 million in 2024, compared to $2.8 million in 2023. These losses primarily related to realized and fair value losses on certain trading securities and a fair value gain on an unlisted security measured at fair value through profit and loss, which was reclassified to equity method securities in 2024.

We also recognized $5.1 million of other costs relating to medical and real estate sectors in 2024, compared to $4.5 million in 2023.

In 2024, we recognized an impairment on assets held for sale of $18.6 million, which related to the classification of assets held for sale. See “– Rationalization of Non-Core Assets”. In 2023, we recognized a reversal of previous impairments of $1.2 million.

We recognized a net gain on the disposition of a subsidiary of $3.6 million in 2024, compared to $nil in 2023. The net gain on disposition of a subsidiary consisted of the difference between the book value of such net assets and the consideration received.

Selling, general and administrative expenses increased to $25.3 million in 2024 from $24.2 million in 2023 primarily due to the stronger Euro against the Canadian dollar and other expenses.

In 2024, we recognized a net foreign currency transaction loss of $0.8 million compared to $0.4 million in 2023, in our consolidated statement of operations. The foreign currency transaction loss represents exchange differences arising on the settlement of monetary items or on translating monetary items into our functional currencies at rates different from those at which they were translated on initial recognition during the period or in previous financial statements.

In 2024, finance costs were $2.5 million compared to $1.8 million in 2023. These related primarily to the increase interest rates and costs due on a subsidiary’s publicly listed bonds in connection with the bond maturity extension completed in 2024.

In 2024, we recognized credit losses of $22,000 on receivables, compared to $0.5 million on receivables in 2023.

We recognized an income tax recovery (other than resource property revenue taxes) of $2.6 million in 2024, compared to an income tax expense (other than resource property revenue taxes) of $1.9 million in 2023. Excluding resource property revenue taxes, we paid $0.3 million in income tax in cash during 2024 and, excluding resource property revenue taxes, we paid $0.4 million in income tax in cash during 2023. We also recognized a resource property revenue tax expense of $3.9 million in 2024, compared to $6.9 million in 2023.

Overall, we recognized an income tax expense of $1.3 million (income tax recovery of $2.6 million and resource property revenue tax expense of $3.9 million) in 2024, compared to an income tax expense of $8.8 million (income tax expense of $1.9 million and resource property revenue tax expense of $6.9 million) in 2023.

In 2024, our net loss attributable to shareholders was $20.6 million, or $1.39 per share on a basic and diluted basis, compared to net income attributable to shareholders of $1.4 million, or $0.09 per share on a basic and diluted basis attributable to shareholders in 2023.

In 2024, our EBITDA loss was $9.3 million, compared to EBITDA of $19.9 million in 2023. Our EBITDA loss in 2024 included a non-cash impairment of $18.6 million in 2024 relating to the classification of assets held for sale in the period and, in 2023, included a non-cash reversal of impairment of assets held for sale of $1.2 million.

The following is a reconciliation of our net (loss) income to EBITDA (loss) for each of the years indicated:

Note:

Please see “Non-IFRS Financial Measures” for additional information.

Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022

The following is a breakdown of our revenue by segment for each of the years indicated:

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