Scully Royalty Ltd Value Stock - Dividend - Research Selection

Business Segments

Our business is divided into three operating segments:

(i) global supply chain, which includes our marketing activities and captive supply assets;

(ii) trade finance and services, which includes structured solutions, financial services and proprietary investing activities; and

(iii) all other, which encompasses our corporate and other investments and business interests, including our medical supplies and servicing business.

Global Supply Chain

Our supply chain business is globally focused and includes our integrated operations and interests. We conduct such operations primarily through our subsidiaries based in Austria, Germany, Luxembourg, Norway, the United States, Latin America and Canada. We supply various products, including minerals, ferrous and non-ferrous metals, chemicals, plastics, refractory and ceramic materials and wood products. These are sourced from our directly or indirectly held interests in resource projects, or are secured by us from third parties.

Since entering the global supply chain business in 2010, we have implemented a long-term growth strategy to achieve critical mass by increasing our revenues through expanding our geographic reach and diversifying our product offerings. Over the last three years, we have completed several strategic acquisitions to support this long-term strategy, including the following acquisitions:

• FESIL - On April 1, 2014, we acquired a 100% interest in FESIL, a vertically integrated supply chain management company and one of the world's leading producers of ferrosilicon through its production plant in Mo i Rana. This acquisition further expanded our sales presence in Europe, the United States and China through FESIL's various sales offices and longstanding relationships with customers that include established steelworks, aluminum and iron foundries and chemical groups. FESIL's operations include sales offices in Germany, Luxembourg, Spain, Norway, United States, South Africa, Ukraine and China. The purchase price of approximately $84.6 million was based on the net tangible asset value of FESIL as of September 30, 2013 and is subject to certain adjustments, which have yet to be finalized as of the date hereof. As of December 31, 2014, the purchase price allocation was provisional. In addition, there is a two-year base royalty on tiered ferrosilicon production at the Mo i Rana facility, which is expected to equal approximately 2.9% of FESIL's ferrosilicon revenue per annum at full production. The acquisition did not include FESIL's interests in Mo Industripark AS. Elsner - In March 2014, we acquired Elsner, which further increased the footprint of our global supply chain business through Elsner's offices in Austria, China, Dubai, Croatia, Albania, Serbia and the United States and increased our product offerings to include steel and related products. Elsner has longstanding relationships with various steel mills in Eastern and Southern Europe, as well as the Baltic States and the Commonwealth of Independent States, and is focused on steel products, including slabs, booms, billets, hot rolled steel plates, hot and cold rolled coils and sheets, reinforcing bars, galvanized material, pipes, tubers and merchant bars. Pursuant to the transaction, we indirectly acquired all of the outstanding share capital of Elsner for nominal consideration (including contingent payments between the parties over a 10-year period based on current inventories and accounts receivables, existing legal actions and the utilization of certain tax loss carry-forwards). In connection with the acquisition, the existing credit facilities of Elsner were amended and we issued guarantees to secure payment obligations under such credit lines and Elsner's finance derivative transactions with the same party to such credit lines.

• MFCR and Possehl - In 2012, we acquired MFC Resources Inc. (formerly ACC Resources Co., L.P.), referred to as “MFCR”, and Possehl Mexico S.A. de C.V., referred to as “Possehl”, which increased our exposure and presence in the North American and Latin American markets and expanded our global supply chain platform to include refractory and ceramic materials and other products. In April 2014, we entered into a share purchase agreement with the minority shareholder and Managing Director of Possehl, pursuant to which we acquired his 40% ownership interest in Possehl in consideration for the delivery of up to 1,109,820 of our common shares. In June 2014, the parties amended this agreement to reduce the total number of shares deliverable to 1,059,820 of our common shares, with: (i) 509,820 common shares deliverable upon receipt of requisite stock exchange approval; and (ii) 50,000 common shares deliverable on an annual basis over up to 11 years in the event that Possehl achieves certain net income targets in each respective year. As a result of the transaction, we now hold a 100% ownership interest in Possehl and 509,820 of our common shares were issued in June 2014.

• MFC Energy - In the third quarter of 2012, we expanded our integrated activities to the energy sector through the acquisition of MFC Energy. These activities include the development, production and processing of natural gas, NGLs and, to a far lesser degree, crude oil in Canada. The majority of such operations are located in the central fairway of the Western Canada Sedimentary Basin, primarily situated in the Province of Alberta. In the second quarter of 2014, we entered into a construction contract for the installation of a 16.5 MW natural gas power plant at MFC Energy's sour gas processing plant. For further information regarding our natural gas and oil facilities, please see “Item 4: Information on the Company — D. Property, Plants and Equipment – Natural Gas Interests”.

Our integrated operations include sourcing and supplying various products. To a lesser extent, we also act as an agent for our clients. Our operations often utilize innovative strategies and financing structures. We currently engage in purchases and sales with producers who are unable to effectively realize sales due to their specific circumstances.

Further, producers and end customers often work with us to better manage their internal supply chain, distribution risk and currency and capital requirements. In such operations, we try to capture various product, financing and currency spreads. Through our operations, we have been able to develop long-standing relationships with producers, end customers and financiers and integrate them into our financial activities.

We generally source from Asia, Africa, Europe, North America, South America and the Middle East and we sell in global markets.

We provide supply chain services, logistics and other trade and finance services to producers and consumers of our products. These activities provide cost effective and efficient transportation, as well as payment terms accommodating working capital requirements for our customers and partners. They are supported by strategic direct and indirect investments in assets operating in our core businesses.

Our global supply chain business employs personnel worldwide and our main marketing office is located in Vienna, Austria. We also maintain offices in Canada, the United States, Mexico, Argentina, China, the United Arab Emirates, Croatia, Albania, Serbia, Norway, Germany, Luxembourg and Spain. In addition, we establish relationships with and seek to further market our products through agents located worldwide. Our marketing and other business activities in this segment are supported by a global network of agents and relationships, which provides us with worldwide sourcing and distribution capabilities.

We indirectly derive royalty revenue from a mining sub-lease of the lands upon which the Wabush iron ore mine is situated in Newfoundland and Labrador, Canada, which commenced in 1956 and expires in 2055. The mine is operated by Cliffs Natural Resources Inc., referred to as “Cliffs”, which, in late 2014, announced the closure of the mine and, in the first quarter of 2015, commenced proceedings under the Companies' Creditors Arrangement Act (Canada), referred to as “CCAA”, with respect to its Canadian operations, including the subsidiary that holds a majority interest in its Wabush mine joint venture. While the Wabush mine is not directly a party to the CCAA proceedings, Cliffs has publicly disclosed that it may be included in any sales process.

Pursuant to the sub-lease, we are entitled to minimum lease payments of C$3.25 million per year until termination thereof. If Cliffs terminates the sub-lease, we intend to exercise our step-in rights and acquire the mine property pursuant to the terms thereof. In such event, under the terms of the sub-lease, we can elect to purchase certain infrastructure onsite at a then reasonable market price. There can be no assurance as to when and if the operator will provide notice of such termination. We are currently exploring opportunities for this asset with stakeholders and third parties. Please see Note 15 to our audited consolidated financial statements for the year ended December 31, 2014 for further information.

Investors are cautioned that we have not completed any technical reports, including reserve or resource estimates under Canadian National Instrument 43-101, referred to as “NI 43-101”, with respect to the mine. No final production decision has been made regarding the project in the event we re-take the mine property and any such decision will be based on studies demonstrating economic and technical viability.

We hold a 50% interest in the Pea Ridge Iron Ore Mine, located near Sullivan, Missouri, U.S.A., approximately 70 miles southwest of St. Louis, Missouri, U.S.A, which has not operated since 2001. In 2012, we completed an updated independent NI 43-101 compliant technical report, referred to as the “Pea Ridge Technical Report”. We are currently conducting additional analysis and investigations in respect of the project. In 2014 and 2013, we invested $0.9 million and $2.0 million of capital, respectively, to progress the project.

Readers should refer to the full text of the Pea Ridge Technical Report, titled “Technical Report on the PRR Mining Pea Ridge Property” dated August 13, 2012, for further information regarding the Pea Ridge Mine, a copy of which is available under our profile at www.sedar.com. The report was co-authored by Betty L. Gibbs, MMSA, and Derek Rance, P. Eng, of Behre Dolbear and Company (USA), Inc., both of whom are “qualified persons” and “independent” of our company, as such terms are defined in NI 43-101.

We are a global supply chain company which utilizes innovative finance alongside sophisticated customized structured solutions to facilitate the working capital and other requirements of our customers. Our global business activities are supported by captive sources and products secured from third parties.

As a supplement to our internal growth initiatives, we seek out and evaluate strategic acquisition and financing candidates to further expand our global supply chain and trade finance and services businesses.

Corporate Information

We are a corporation organized under the laws of the Province of British Columbia, Canada. We were originally incorporated in June 1951 by letters patent issued pursuant to the Companies Act of 1934 (Canada). We were continued under the Canada Business Corporations Act in March 1980, under the Business Corporations Act (Yukon) in August 1996 and under the Business Corporations Act (British Columbia) in November 2004. Our name was changed from “Terra Nova Royalty Corporation” to “MFC Industrial Ltd.” on September 30, 2011 to better reflect our focus on the global supply chain business.

Our principal executive office is located at Suite 1860 - 400 Burrard Street, Vancouver, British Columbia, Canada V6C 3A6 and its telephone number is +1 604-683-8286. Our registered office is located at Suite 1000 – 925 West Georgia Street, Vancouver, British Columbia, Canada, V6C 3L2.