VANCOUVER, March 24, 2014 /CNW/ - Callinan Royalties Corporation ('Callinan', the 'Company') (TSXV: CAA) notes that on March 18, 2014, Wallbridge Mining Company Ltd.'s board of directors announced that it approved a production decision for the Broken Hammer copper and platinum group metals project near Sudbury, Ontario, Canada.
As described by Wallbridge Mining in its press release, the Broken Hammer project is projected to extract copper, nickel and platinum group metals mineralization from an open pit where bulk sampling was conducted in 2011. Construction and subsequent production is expected by Wallbridge Mining to commence in April 2014 with open-pit mining to be completed within 10 to 12 months at an average daily rate of approximately 800 tonnes per day. Wallbridge Mining announced on March 24, 2014 that it had entered into a custom milling agreement.
Callinan reports that Wallbridge Mining has subsequently drawn the full amount of $2 million from the line of credit having previously drawn $750,000 in accordance with an agreement with Callinan reported in November 2012. The line of credit bears an interest calculated as the greater of 10% per annum or a 1.5% Net Smelter Returns ("NSR") royalty prorated on the funds drawn. The term will be 3 years or until completion of the extraction and processing of mineral produced from the Broken Hammer project, whichever occurs first.
In addition, Callinan also has the right to buy an additional 1% NSR royalty on the Broken Hammer property for $2 million with inflation adjustment. As reported by Wallbridge Mining on December 17, 2013, the distal extensions of the Broken Hammer project and adjacent areas are part of the Wisner properties that are subject to a joint venture agreement with Lonmin plc, which is funding exploration for platinum group metals.
The line of credit is expected to generate short term cash flow for Callinan. In addition, the agreement with Wallbridge Mining provides Callinan with a royalty option on the Broken Hammer project for further upside potential. Callinan is a shareholder of Wallbridge Mining and holds additional royalty options on properties that exhibit potential for copper, nickel and platinum group metals deposits located in the Sudbury area, which is one of the most productive mining districts in Canada.
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 CAD $0.25 per ton production royalty on lands that include the 777 mine and 777 North mine owned by Hudbay Minerals Inc. located in Flin Flon, Manitoba, Canada. 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 49.2 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: For more information, please visit www.callinan.com or contact: Roland Butler, CEO, Callinan Royalties Corporation, +1 709 535 3433, [email protected]; Tamara Edwards, CFO, Callinan Royalties Corporation, +1 604 424 8639, [email protected]; Corporate Office: 770 - 475 West Georgia Street, Vancouver, BC, Canada, V6B 4M9