VANCOUVER, July 4, 2011 /PRNewswire/ - The Manitoba Court of Queens Bench (the Court) has
issued an interlocutory judgment in Callinan's ongoing action
against HudBay Minerals, the operator of the 777 Mine in which
Callinan holds a 6 2/3% Net Profits Interest.
Callinan's statement of claim, filed in March of 2007, sought an
order compelling Hudbay to make available to Callinan all books,
records, and accounts concerning the 777 Mine. According to the
agreement between Callinan and HudBay, the calculation of payments
due to Callinan under the Net Profits Interest Agreement is to be
audited annually by an independent auditor, and the results of the
audit are to be furnished to Callinan. It is Callinan's position,
as confirmed by this recent ruling, that all material used to
produce the annual audits of Callinan's Net Profits Interest
including the working papers of HudBay's auditors are relevant and
should be furnished to Callinan for use as evidence.
The judgment, rendered by Chief Justice
Joyal, is the first ruling since the case has been referred
to "Case Management," a process designed to expedite the pre-trial
process. The appeal ruling overturns a previous ruling by a Master
of the Court denying Callinan's access to working papers prepared
by Deloitte to conduct annual audits of Callinan's Net Profits
Interest. The ruling also denies a HudBay motion to strike
affidavit evidence given by Callinan's expert witness, accountant
Mark Lotz.
In his reasons for judgment, Justice
Joyal explained, "I have determined that it would indeed be
unfair to deprive Callinan of the benefit of Deloitte's work effort
in preparation for the eventual discoveries. It is reasonable to
suppose that the nature of the documents in question will include
what Callinan anticipates to be detailed calculations and analyses
in relation to the Net Profits Interest calculation."
It remains the company's intention and priority to conduct a
full and transparent independent audit of all books, records, and
accounts of the 777 and Callinan
Mines to ensure the proper and timely payment of its NPI and
royalty interests both in the past and for the life of the
project.
On behalf of the Board of Directors
Mike
Muzylowski
Mike
Muzylowski
President and CEO
Neither 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.
Some statements in this news release contain
forward-looking information. These statements address future
events and conditions and, as such, involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements to be materially different
from any future results, performance or achievements expressed or
implied by the statements. Such factors include, among others, the
timing and amount of expenditures. Callinan does not assume the
obligation to update any forward-looking statement, except as
required by applicable law.
SOURCE Callinan Mines Ltd.