Metals Royalty Co Inc.
For the period ended May 7, 2026. Filed May 7, 2026.
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May 7, 2026 · Filed May 7, 2026
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Contents
EX-99.1 · Sample Calculation
Sample Calculation
| 1. | Definitions |
As used in this Conveyance:
| i. | “Attributable Final Product Shipments” means, for each calendar quarter, the quantity (measured in metric tons) of Final Products produced from the Subject Minerals. The Attributable Final Product Shipments shall be calculated as the product of (i) the Final Product Shipments for such calendar quarter multiplied by (ii) the quotient of (x) the Subject Minerals mined during such calendar quarter (measured in metric tons) divided by (y) the Ore Mined during such calendar quarter. |
| ii. | “Base Pellet Royalty Amount” means, for each calendar quarter: (i) prior to the Step Down Date, the greater of (A) the simple average of the Reference Iron Pellet Price over such calendar quarter multiplied by 1% or (B) $1.50 per metric ton; and (ii) from and after the Step Down Date, the greater of (A) the simple average of the Reference Iron Pellet Price over such calendar quarter multiplied by 0.25% or (B) $0.375 per metric ton. |
| iii. | “Final Product Shipments” means, for each calendar quarter, the total shipments from the Project of the Final Products, regardless of the source of the Minerals used to make such Final Products. |
| iv. | “Mineral Royalty Amount” has the meaning set forth in Paragraph 2 of this Annex 1. |
| v. | “Ore Mined” means, for each calendar quarter, the sum of (i) the total Minerals, measured in metric tons, that are mined at the Landowners’ Nashwauk mine (the “Project”) during such calendar quarter whether mined on the Burdened Leases, Lands and Mineral Tracts or otherwise and (ii) any other Minerals which are delivered to the Project for processing at the Project during such calendar quarter, measured in metric tons. |
| vi. | “Overage Pellet Royalty Amount” means, for each calendar quarter: (i) prior to the Step Down Date, the greater of (A) the simple average of the Reference Iron Pellet Price over such calendar quarter multiplied by 0.25% or (B) $0.375 per metric ton; and (ii) from and after the Step Down Date, the greater of (A) the simple average of the Reference Iron Pellet Price over such calendar quarter multiplied by 0.0625% or (B) $0.09375 per metric ton. |
| vii. | “Reference Iron Pellet Price” shall mean the “Direct Reduction Pellet 67.5% Fe Free On Board Brazil (US dollars per dry metric ton) (IODBR00)” price index as published by S&P Platts, a 3rd party Price Reporting Agency, and/or its successors (“Platts”); provided that if Platts discontinues or suspends the price index named above for any reason, then the Reference Iron Ore Price shall be calculated using the following formula: |
(a)the Platts “65% Fe concentrate delivered Cost and Freight to Qingdao, China (US dollars per dry metric ton) (IOPRM00)” price index (the “65% Fe Iron Ore Price”) which number shall bemultiplied by68% (reflecting the expected pellet grade from the Assignor’s Project)divided by65%;plus
(b)the Platts “Direct Reduction 67.5% Fe Pellet Premium (US dollars per dry metric ton) (IODRP00)” price index (the “DR Grade Pellet Premium”);minus
(c)the Platts “Tubarao, Brazil to Qingdao, China capesize (170,000 tons) shipping price index (USdollars per wet metric ton)” price index (the “C3 Index”);
provided further, except as specifically set forth above, to the extent that this Conveyance incorporates prices, rates or other information from a specific source or publication and that source or publication fails (whether due to market disruption events or otherwise) or ceases to publish such information, or ceases publication altogether without a successor publication, or changes the heading or format under which such information is published, or changes the source of information which it publishes under such heading or format, then such source shall be the same source as shall have been designated by the Landowners and the Assignor under the Existing Royalty Agreement as a mutually acceptable comparable and reasonable alternative source for the price per metric ton of Direct Reduction grade iron ore pellets (*i.e.,*pellets with an iron grade of >67% Fe) exported from Brazil.
By way of example, if (i) the “Direct Reduction Pellet 67.5% Fe Free On Board Brazil (US dollars per dry metric ton) (IODBR00)” is no longer published by Platts, (ii) the 65% Fe Iron Ore Price is $100 per metric ton, (iii) the DR Grade Pellet Premium is $50 per metric ton, and (iv) the C3 Index is $20 per metric ton, then the Reference Iron Pellet Price would be $134.62 per metric ton (i.e.,$100/t * (68% / 65%) + $50/t – $20/t).
Notwithstanding anything to the contrary herein, any pricing herein pursuant to a reference to a source or publication may vary from time to time.
| 2. | Calculation of Royalty Amounts. |
| i. | For each calendar quarter, the value payable in respect of the Royalty Minerals (the “Mineral Royalty Amount”) shall be calculated as the sum of: (A) the product of the Base Pellet Royalty Amount for such calendar quarter, multiplied by the Attributable Final Product Shipments for such calendar quarter that are attributable to the annual production up to 8.5 million metric ton per annum (the “Base Attributable Shipments”); plus (B) the product of the Overage Pellet Royalty Amount for such calendar quarter, multiplied by the Attributable Final Product Shipments for such calendar quarter that are attributable to the annual production in excess of 8.5 million metric ton per annum (the “Overage Attributable Shipments”). |
| ii. | By way of example, if (A) prior to the Step Down Date, (B) the Base Pellet Royalty Amount for a calendar quarter is $1.50 per metric ton, (C) the Overage Pellet Royalty Amount for such calendar quarter is $0.375 per metric ton, (D) the Base Attributable Shipments for such calendar quarter equal 2,125,000 metric tons, and (E) the Overage Attributable Shipments for such calendar quarter equal 500,000 metric tons, then the value payable pursuant to Article III of this Conveyance would be $3,375,000, calculated as ($1.50/metric ton × 2,125,000 metric tons) + ($0.375/metric ton × 500,000 metric tons). |
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