Callinan Royalties Agrees to $1 Million Investment into Golden Dory and Acquisition of Option to Acquire Royalty Interests on the Iron Horse Property
VANCOUVER, Nov. 8, 2012 /CNW/ - Callinan Royalties Corporation ("Callinan") has signed an agreement with Golden Dory Resources Corp. ("Golden Dory") whereby Callinan has agreed to invest $1 million by way of private placement into Golden Dory and, concurrent with closing the financing, Callinan will acquire two royalty options from Golden Dory on the Iron Horse Property owned by the Golden Dory-Metals Creek Joint Venture. Golden Dory is the project operator and can earn up to 70% interest in the Iron Horse Property located in western Labrador, Canada where intersections of iron formation have been reported by Golden Dory from recent drilling programs. Golden Dory has agreed to spend $1 million in exploration on the Iron Horse Property before the end of 2013.
The first option will allow Callinan to purchase a 1% royalty for $1 million. A second option will allow Callinan to purchase up to an additional 1.1% royalty at a price to be calculated by an independent third party based on information from the final bankable feasibility study used for mine construction. The royalty options will be exercisable at any time up to 180 days following 180 days of continuous commercial production.
Under Golden Dory's private placement, Callinan will acquire 14,285,714 units of Golden Dory at a price of $0.07 per unit. Each unit under the private placement will consist of one common share and one common share purchase warrant. Each warrant will entitle Callinan to purchase one additional common share of Golden Dory at an exercise price of $0.10 for a period of two years following the closing of the private placement. However, Golden Dory will not issue, during the term of the warrants, shares upon exercise of the warrants held by Callinan that will result in Callinan holding more than 19% of the issued and outstanding shares of Golden Dory. Closing of the private placement and grant of royalty options is expected to occur on or about November 12, 2012.
Callinan is pleased to enter this mutually beneficial agreement with Golden Dory, which has demonstrated exploration success on an early stage property. Callinan will become a significant shareholder in Golden Dory while holding royalty options in Canada's premier iron ore mining region.
On Behalf of the Board of Directors,
Roland Butler, CEO
About Golden Dory
Golden Dory Resources Corp. (TSX.V-GDR) is primarily focused on iron ore exploration at the Iron Horse Project in Newfoundland & Labrador, Canada; and in the Long Canyon district (Pequop South), and Reef properties in the state of Nevada, USA.
Callinan Royalties is a Canadian company that creates and acquires mineral royalties. The company uses its royalty income to provide alternative financing options to mineral exploration and development companies with attractive projects. Callinan's strategy is to create shareholder value over the long term by generating a portfolio of profitable mineral royalties.
The Corporation currently has two producing royalties. Callinan holds a 6⅔% net profits interest royalty and a $0.25 per ton royalty on lands that include the 777 Mine owned by HudBay Minerals Inc. located in Flin Flon, Manitoba, Canada as well as the adjacent 777 North Mine scheduled for production in 2012. Callinan also holds the 777 Deeps (War Baby) property and an associated royalty option on the property, which is located adjacent to the 777 Mine.
Callinan is a dividend paying Tier 1 company listed on the TSX Venture Exchange under the symbol CAA. The Corporation has a strong financial position with no debt, approximately $29 million in cash and approximately 48.2 million shares outstanding.
Cautionary Statement on Forward-Looking Information
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Certain of the information presented in this News Release may constitute "forward-looking statements" or "forward-looking information" within the meaning of Canadian securities legislation (together referred to as "forward-looking statements"). The forward-looking statements are subject to risks, uncertainties and other factors that may cause actual results to be materially different from those expressed or implied by such forward-looking statements, including any delays in the receipt of consents or approvals. Although Callinan Royalties has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained in this News Release and in any document referred to in this News Release. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made and Callinan Royalties undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law.
SOURCE: Callinan Royalties CorporationFor further information:
For more information, please visit www.callinan.com or contact:
Roland Butler, CEO
Callinan Royalties Corporation
+1 709 535 3433
Tamara Edwards, CFO
Callinan Royalties Corporation
+1 604 605 0885
1110 - 555 West Hastings Street
Canada, V6B 4N4