VANCOUVER, July 31, 2012 /CNW/ - Callinan Royalties Corporation
("Callinan") has entered into an agreement with Gold Royalties
Corporation whereby Callinan will provide C$5.4 million to Gold
Royalties Corporation ("GRC") via a convertible debenture.
The financing is provided to facilitate in part the purchase by GRC of
royalty interests located in the Yukon Territory, Canada.
The convertible debenture will carry an interest rate of 10% per annum
and mature on July 30, 2016. Interest payments shall accrue quarterly
and are deferred until the maturity date. The principal and interest
are secured by the royalties and corporate assets of GRC.
At Callinan's option and at any time before or on the maturity date,
Callinan has the right to convert the principal and accrued interest to
60% of the royalty interests or into share units of GRC comprised of 1
common share of GRC at $0.80 and 1 warrant priced at $1.20. The accrued
interest will be converted into shares issued at market price.
If neither conversion option is exercised by Callinan, the full
principal and interest will be repaid in cash. In addition, GRC will
hold an early repayment option for $8,600,000 after offering Callinan
the right to convert the loan to shares.
Callinan Royalties Corporation is pleased to provide this flexible and
alternative form of financing to Gold Royalties Corporation and to find
a common interest in facilitating the growth plans of each company.
On Behalf of the Board of Directors,
Roland Butler, CEO
About the Royalty Interests
The Eagle Zone Gross Smelter Royalty
The Eagle Zone gross smelter royalty (the "Eagle Zone GSR"), known
otherwise as the Mar Gold Zone, is a 2% gross smelter royalty on the
Eagle Zone gold deposit being advanced by Victoria Gold Corp. The
project is located approximately 85 km NE of Mayo, Yukon, Canada. The 2% gross smelter royalty, which comes with
advance royalty payments, reverts to a 1% gross smelter royalty after
payment of $1,000,000, of which approximately $420,000 has been
received by the third-party vendor to-date. There is no royalty
buy-back provision afforded to the operator with the Eagle Zone GSR.
The Lynx Zone Net Smelter Royalty
The Lynx Zone net smelter royalty (the "Lynx Zone NSR"), known otherwise
as the Len Property, is a 1% net smelter royalty, which comes with
advance royalty payments, on claims being advanced by Victoria Gold
Corp. The project is located NE of Mayo, Yukon, Canada. The Lynx Zone NSR may be repurchased by the operator at a rate
of $100,000 per 0.15%, either pro-rata or in whole, for a total of
$1,500,000, less advance royalty payments made to-date to the royalty
About Gold Royalties Corporation
Gold Royalties Corporation is a growth-orientated royalty business,
which acquires and holds mining royalty assets for investment purposes.
The company acquires small-to-mid tier net smelter return and metal
stream royalties, with a focus on gold royalties, securely located
within North America. Gold Royalties Corporation currently holds net
smelter return royalties on seven mining projects, including four
royalties in Ontario and one each in British Columbia, Québec and the
Yukon. The Corporation continues to use an established business model
to acquire royalty interests with the clear objective of delivering
accretive value for shareholders. See www.goldroyalties.ca for more information.
Callinan Royalties Corporation is a mineral royalty company based in
Canada. Its principal business activities centre on creating mineral
royalties through financing and royalty acquisition while diligently
managing its royalty interests and investments.
The Corporation currently has two producing royalties. Callinan holds a
6⅔% net profits interest royalty and another $0.25 per ton royalty on
lands that include the 777 Mine owned by HudBay Minerals Inc. located
at 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 located on that
property, which is located adjacent to the 777 Mine.
Callinan is a dividend paying Tier 1 company listed on the TSXV under
the symbol CAA. The Corporation has a strong financial position with
no debt, approximately $30 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 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