VANCOUVER, Feb. 26, 2013 /CNW/ - Callinan Royalties Corporation
('Callinan', the 'Company') (TSXV: CAA) announces its financial results
for the three and six months ended December 31, 2012. 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 6 month period ended December 31, 2012 net of income
tax expense is $5,348,827 and $2,892,704 for the quarter ended December
31, 2012, compared to $13,969,961 and $5,145,062 for the same period
last year. Income per share for basic and fully diluted is $0.11
compared to $0.28 for basic and $0.27 fully diluted for the same period
last year. Prior year results included a one-time recovery of
$6,038,000 in deferred taxes realized from the spin-out of the
exploration properties in 2011.
A summary of the financial information is included in the following
December 31, 2012
December 31, 2011
December 31, 2012
December 31, 2011
Net Income /
Share Fully Diluted
Cash Flow from
The following are highlights from the quarter:
Interim quarterly royalty payments for the quarter ended December 31,
2012 totaling $3.94 million from HudBay Minerals Inc. (compared to
$5.08 million in the same quarter last year)
Cash on hand at December 31, 2012 was $26.43 million (compared to
$27.23 million at December 31, 2011)
Completed 5 transactions
Roland Butler, CEO commented: "The last quarter of 2012 was a very
productive quarter for Callinan. With five transactions completed, we
are actively seeking attractive royalty opportunities in a challenging
financing environment. While we continue to seek producing royalties at
attractive valuations, we remain attracted to royalty creation though
exploration financing. We particularly like companies that adhere to
the prospect generator model as we see our business strategies as
777 Mines Royalties
On February 20, 2013 HudBay Minerals Inc. ("HudBay") reported its
financial results for the last quarter for its 777 mine. Ore production
from the last quarter of 2012 was up 5% compared to the same period in
2011, while the copper, zinc, gold and silver grades were lower by 36%,
9%, 14% and 20%, respectively, due to the sequencing of production
In addition, the operating costs per tonne of ore in the last quarter
were 20% higher compared to the same period in 2011, primarily due to
the timing of maintenance spending and increased contractor costs.
Subsequent to December 31, 2012, Callinan has received interim quarterly
royalty payments totaling $3,939,810.00 from HudBay Minerals Inc.
(compared to $5,075,950.50 in the same quarter last year). The royalty
payments include a payment of $3,825,586.00 from the 6⅔% Net Profits
Interest Royalty and $114,224.00 from the production royalty of $0.25
per ton of ore for the quarter ended December 31, 2012. This amount is
net of 25% holdback by HudBay which is paid to Callinan in July of each
year as per the agreement.
HudBay also published its guidance for 2013 is a production of 1.62
million tonnes of ore with a grade of 2.18% copper, 4.41% zinc, 1.94
g/tonne gold and 30.89 g/tonne silver, with unit operating costs of
For more information please see www.hudbayminerals.com.
Development and Exploration Royalties
During the three months ended December 31, 2012, Callinan closed a
number of transactions with the following groups:
(See news releases and website for more information.)
Evrim Resources: In October 2012, Callinan signed an agreement with Evrim Resources
Corp. ("Evrim") for a four year, C$1.5 million regional exploration
alliance (the "Alliance") in Mexico. The Alliance will initially focus
on generating gold and silver targets within a 40,000 square kilometer
Area of Interest (AOI) in prospective mineral belts with a firm
commitment of C$500,000 in year one.
Projects acquired within the AOI during the term of the Alliance will be
100% owned by Evrim and subject to a 1.5% Net Smelter Return (NSR)
royalty in the case of precious metals and a 1.0% NSR royalty in the
case of base metals to Callinan.
For more information see www.evrimresources.com.
Northern Shield Resources: In November, Callinan signed an agreement with Northern Shield
Resources Inc. ("Northern Shield") whereby Callinan invested in
Northern by way of a non-brokered private placement and acquired a
royalty option on one of six properties in Northern's Storm property
group located in northern Ontario.
For more information see www.northern-shield.com.
Golden Dory Resources: In December, Callinan finalized the acquisition of units of Golden
Dory Resources Corp. ("Golden Dory") and of two options to purchase
royalty interests on Golden Dory's Iron Horse Property, Newfoundland &
Labrador. The agreement was announced on November 8.
For more information see www.goldendoryresources.com.
Wallbridge Mining: In December, Callinan completed the transaction previously announced
on November 20, 2012 with Wallbridge Mining Company Limited
("Wallbridge"). Callinan has invested $1.5 million in Wallbridge by way
of a non-brokered private placement and provided Wallbridge with a line
of credit for $2.0 million to fund potential mining development of the
Broken Hammer copper, nickel and platinum group metals project.
For more information see www.wallbridgemining.com.
Adventus Exploration Ltd.: In December, Callinan signed an agreement with Adventus Exploration
Ltd., a private mineral exploration company based in Ireland. Callinan
agreed to subscribe for shares of Adventus for a total subscription
price of 400,000 Euros representing a 19.9% equity interest in
Adventus. Proceeds of the investment will be used by Adventus to
undertake mineral exploration targeting and project acquisition for
base metals and precious metals within selected Areas of Interest
("AOI") in Western Europe. Any project acquired in the AOI within two
years or until funds are expended, whichever is later, will become
subject to a 2% NSR royalty in favour of Callinan.
During the 6 month period ended December 31, 2012, the Company received
and accrued $9,653,821 (2011 - $13,146,118) 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,
$235,692 represents the production royalty payment (2011 - $210,922)
for the 942,768 tons mined during the period, and $9,418,129 (2011 -
$12,935,196) for the 6⅔% NPI for the period. Additionally, $188,889
was received for interest revenue (2011 - $143,043), and $225,000 was
accrued for interest on the Company's debentures, for total revenues of
$10,067,710 (2011 - $13,289,161).
Cash on hand at December 31, 2012 was $26,429,691, which is $802,829
lower than 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
Callinan reports that the independent audit by Grant Thornton of the NPI
calculations cannot be completed as planned. Audit work for the four
initially selected years as well as a partial audit of 2011 had been
protracted as much of the source material evidencing entries from the
originally selected early years is not available from HudBay.
Therefore, the audit work conducted is incomplete and inconclusive in
The Board of Directors of Callinan will undertake a review to determine
the next course of action. Alternatives include, but may not be
limited to, conducting additional audit work, 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.
Callinan announced that it extended into 2013 its normal course issuer
bid (the "Bid") and has filed a further Notice of Intention to Make a
Normal Course Issuer Bid with the TSX Venture Exchange ("TSXV").
Under the Bid in 2013, a total of up to 2,411,451 of its common shares
may be purchased through the facilities of the TSXV and any such
purchases will be at market prices. The Bid commenced on or after
January 1, 2013 and will end on December 31, 2013 or on such earlier
date as Callinan may complete its purchases pursuant to the Bid or as
it may otherwise determine.
Callinan is continuing to engage in the Bid because it believes that the
market price of its common shares does not properly reflect its
The board of directors of Callinan Royalties Corporation has declared a
quarterly cash dividend for the quarter ending March 31, 2013 on its
common shares of two cents per common share to all shareholders of
record at the close of business on March 28, 2013. The ex-dividend date
will be March 26, 2013 and it is expected that the dividend will be
paid on or about April 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, 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 48.9 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:
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