Callinan Royalties and Northern Shield Enter Into an Investment and Royalty Agreement
VANCOUVER, Nov. 15, 2012 /CNW/ - Callinan Royalties Corporation ("Callinan") has signed an agreement with Northern Shield Resources Inc. ("Northern") whereby Callinan has invested $700,000 in Northern by way of a non-brokered private placement.
Under the agreement, Callinan has acquired 6,363,636 units of Northern at a price of $0.11 per unit. Each unit under the private placement consists of one common share and one half common share purchase warrant. Each whole warrant entitles Callinan to purchase one additional common share of Northern at an exercise price of $0.22 for a period of two years.
In addition, Callinan has paid Northern $300,000 to acquire a royalty option on one of six properties in Northern's Storm property group located in northern Ontario. The properties have in recent years demonstrated the potential for volcanic-hosted massive sulfide base metal deposits over a large area and are also considered prospective for magmatic platinum group element deposits and other mineral deposit types.
The royalty option allows Callinan to acquire a 1% Net Smelter Returns royalty by paying Northern $2 million at any time up to the later of five years or the mine development stage. Northern has also granted to Callinan a Right of First Refusal on the sale of any royalties on the Storm property group owned by Northern.
Callinan is pleased to enter this mutually beneficial arrangement with Northern. A key part of Callinan's royalty creation strategy is to invest with select exploration companies such as Northern that apply the prospect generation business model to explore new regions. Callinan will become a significant shareholder in Northern while holding a royalty option in an emerging significant mineral district in Canada.
On Behalf of the Board of Directors,
Roland Butler, CEO
About Northern Shield
Northern Shield is a Canadian-based mineral exploration company concentrating on Platinum group elements and base metals in under-explored regions of Canada and its common shares are listed on the TSX Venture Exchange. Significant industry shareholders of Northern Shield include HudBay Minerals Inc. and Anglo Pacific Group. The company also has a joint venture with Impala Platinum.
About Callinan Royalties
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:
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