Hey there Francis.
First off, Labrador Iron Ore is a royalty company that simply has an interest in the Iron Ore Company of Canada. So much like our Bull List Stock A&W Royalty, it simply takes top-line royalties from IOCC and pays out a set distribution.
So, when prices of iron ore are high, LIF will pay out more as it will inevitably get more royalty payments from IOCC. This is why you see a very high, and likely unsustainable yield.
A purchase of Labrador Iron Ore is essentially a play on the price of iron ore with a juicy distribution attached to it. I've attached an image for you to highlight how closely Labrador has tracked the price of iron ore over the last decade. You can see it follows it almost in unison. So, this is why when iron ore spiked massively in late 2021, Labrador Iron Ore's price shot up to nearly $50. And, as we are seeing now with falling iron ore prices, LIF's share price is taking a bit hit.
It's hard for me to decide whether or not LIF is a solid buy right now, as it is solely dependent on where the price of iron ore goes. However, there is no doubt the company has provided significant value for those who aren't too worried about the price of the underlying shares and instead want to soak up the distribution. LIF has returned 10.25% annually since 2013, pretty much solely from the distribution.
Could LIF go to $20 again? Very possible, if commodity prices cool and iron ore continues to fall. Could it go to $50 again? In that situation, we'd likely need iron ore to break its highs again. I'm sorry this isn't necessarily a cut and dry answer. With cyclicals.... It's very hard to come up with one. It's provided strong distributions in the past, and likely will in the future. So, if income is your goal, likely not a bad buy and hold.