Callinan Royalties Releases Q3 Financial Statements and Announces Quarterly Dividend Payment Date

TSXV: CAA

VANCOUVER, May 29, 2013 /CNW/ - Callinan Royalties Corporation ('Callinan', the 'Company') (TSXV: CAA) announces its financial results for the three and nine months ended March 31, 2013. The unaudited financial statements and Management Discussion and Analysis are available on Callinan's website (www.callinan.com) and on SEDAR (www.sedar.com).

Net income for the 9 month period ended March 31, 2013 net of income tax expense is $7,229,874 and $1,881,047 for the quarter ended March 31, 2013, compared to $17,412,110 and $3,442,149 respectively, for the same period last year.  Income per share for basic and fully diluted is $0.15 compared to $0.35 for basic and $0.35 fully diluted for the same period last year.

A summary of the financial information is included in the following table:

  3 months
   March 31, 2013   
3 months
   March 31, 2012   
9 months
   March 31, 2013   
9 months
   March 31, 2012   
Income    $3.22 million    $5.38 million    $13.29 million    $18.67 million
Net Income    $1.88 million    $3.44 million    $7.23 million    $17.41 million
Net Income /
Share Fully Diluted
   $0.04    $0.07    $0.15    $0.35
Cash Flow from Operation    $(0.65) million    $2.15 million   $8.23 million    $11.88 million

The following are highlights from the quarter:

  • Interim quarterly royalty payments for the quarter ended March 31, 2013 totaling $2.30 million from HudBay Minerals Inc. (compared to $4.00 million in the same quarter last year)
  • Cash on hand at March 31, 2013 was $24.58 million (compared to $27.84 million at March 31, 2012)

Roland Butler, CEO commented, "The third quarter saw lower royalty revenue largely due to lower metal prices and higher costs at the 777 Mine, which may be temporary. While no new royalty agreements were signed this quarter, numerous opportunities were evaluated and we are generating new business on a regular basis."

777 Mines Royalties

On May 1, 2013 HudBay Minerals Inc. ("HudBay") reported its financial results for the last quarter for its 777 mine. Ore production for the first quarter 2013 was up 4% compared to the same period in 2012 due to ore production from the 777 North ramp. Copper, zinc, gold and silver grades were lower by 15%, 20%, 4% and 17%, respectively, due to the sequencing of production stopes.

In addition, the operating costs per tonne of ore in the last quarter were 21% higher compared to the same period in 2012, primarily due to increased contractor costs and additional ground support requirements.

Subsequent to March 31, 2013, Callinan received interim quarterly royalty payments totaling $2,298,145 from HudBay Minerals Inc. (compared to $4,001,294 in the same quarter last year). The royalty payments include a payment of $2,187,395 from the 6⅔% Net Profits Interest Royalty and $110,750 from the production royalty of $0.25 per ton of ore for the quarter ended March 31, 2013. This amount is net of 25% holdback by HudBay which is paid to Callinan in July of each year as per the agreement.

For more information regarding the 777 mine, please see www.hudbayminerals.com.

Financial Performance

During the 9 month period ended March 31, 2013, the Company received and accrued $12,681,087 (2012 - $18,446,392) for its $0.25 per ton production royalty and its 6⅔% Net Profits Interest ("NPI") royalty in the Callinan Mine located in Flin Flon, Manitoba.  Of that amount, $346,441 represents the production royalty payment (2012 - $315,280) for the 1,385,764 tons mined during the period, and $12,334,646 (2012 - $18,131,112) for the 6⅔% NPI for the period.  Additionally, $247,741 was received for interest revenue (2012 - $221,598), and $360,000 was accrued for interest on the Company's debentures, for total revenues of $13,288,828 (2012 - $18,667,990).

Cash on hand at March 31, 2013 was $24,584,446, which is $3,256,563 lower than the same period last year. As per the Company's cash management policy, excess cash is invested in short-term term deposits and bankers acceptance not exceeding ninety days, so as to secure capital and earn a reasonable return.

Update on Independent Audit

The Board of Directors of Callinan has undertaken and completed a review to determine the next course of action with respect to outstanding issues with HudBay. Alternatives include, but may not be limited to, providing notice in writing to HudBay and proceeding with litigation or engaging in discussions with a view to a resolution of outstanding issues.

As litigation remains an option to be considered by the Board of Directors, the Company does not intend to disclose information from the incomplete audit work conducted or report any developments with respect to the review unless and until its Board of Directors has approved a course of action that requires disclosure or otherwise deems that disclosure of developments is appropriate.

Quarterly Dividend

The board of directors of Callinan Royalties Corporation has declared a quarterly cash dividend for the quarter ending June 30, 2013 on its common shares of two cents per common share to all shareholders of record at the close of business on June 28, 2013. The ex-dividend date will be June 26, 2013 and it is expected that the dividend will be paid on or about July 15, 2013.

It is anticipated that future quarterly dividends will be payable approximately 15 days following each fiscal quarter. The declaration, timing, and payment of future dividends will largely depend on the Company's financial results as well as other factors. Dividends paid by Callinan Royalties Corporation are eligible dividends for Canadian income tax purposes unless otherwise stated.

On Behalf of the Board of Directors,

Roland Butler

Roland Butler, CEO

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 production 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 $25 million in cash and approximately 49.1 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 Corporation

For further information:

For more information, please visit www.callinan.com or contact:

Roland Butler, CEO
Callinan Royalties Corporation
+1 709 535 3433
shareholder@callinan.com

Tamara Edwards, CFO
Callinan Royalties Corporation
+1 604 605 0885
shareholder@callinan.com

Corporate Office:
1110 - 555 West Hastings Street
Vancouver, BC
Canada, V6B 4N4

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Callinan Royalties Corporation

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