Callinan Releases Q1 Financial Statements, Updates Independent
Audit and Announces Quarterly Dividend Payment Date
TSXV: CAA
VANCOUVER, Nov. 29, 2012 /CNW/ - Callinan Royalties reports
strong financial performance in the three months ended September 30, 2012.
Callinan holds a 6⅔% Net Profits Interest
("NPI") royalty and another $0.25 per
ton royalty on its royalty 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 late 2012.
The Company's net earnings attributable to
shareholders for the period ended September
30, 2012 is $2,456,123
compared to $9,634,348 for the same
period last year, or $0.05 per share
compared to $0.19 per share last
year. The current period earnings include accrued interest of
$90,000 resulting from the reported
financing agreement with Gold Royalties Corporation. Prior
year results included a one-time recovery of $5,032,168 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 table:
|
|
Three Months
Ended |
|
|
September 2012 |
September 2011 |
Operating Summary |
|
$ |
$ |
|
|
|
|
Revenue |
|
4,586,398 |
6,476,937 |
|
|
|
|
Net earnings (After taxes) |
|
2,456,123 |
9,634,348 |
|
|
|
|
Diluted earnings per share |
|
0.05 |
0.19 |
|
|
|
|
Net cash flow from operating activities |
|
7,108,527 |
8,961,979 |
|
|
|
|
The following are highlights from the first
fiscal quarter:
- Callinan Royalties Corporation has received interim quarterly
royalty payments totaling $3,359,471.50 from HudBay Minerals Inc.
- The board of directors of the Company declared a regular
quarterly cash dividend for the first fiscal quarter on its common
shares of two cents per common share.
The dividend was paid on October 15,
2012.
- As previously announced on July
31, Callinan entered into an agreement with Gold Royalties
Corporation whereby Callinan provided C$5.4
million to Gold Royalties Corporation ("GRC") via a
convertible debenture. The financing was provided to facilitate in
part the purchase by GRC of royalty interests on the Eagle gold
project located in the Yukon Territory,
Canada. 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.
Update on Independent Audit
The independent audit by Grant
Thornton of the NPI calculations continues towards
completion. Audit work has been protracted as much of the source
material evidencing entries from the originally selected early
years is not available from HudBay. In addition, a partial audit of
2011 for comparison purposes has been initiated. Once this
phase of work has been completed Grant
Thornton will report to the Board of Directors of
Callinan.
On September 09, 2011, Callinan
reported that it had executed a standstill agreement with Hudson
Bay Mining & Smelting Co., Limited ("HudBay"), a wholly-owned
subsidiary of HudBay Minerals Inc., which placed in abeyance
Callinan's law suit in respect of its Net Profits Interest and
Royalty agreement with HudBay dated January
1, 1988 while Callinan conducted an independent audit.
In the law suit, which was commenced in 2007 in the Manitoba Court of Queen's Bench, Callinan
alleged that HudBay had not properly accounted to Callinan for the
net profits interest ("NPI"). The law suit was prolonged
while Callinan pursued an application against Deloitte &
Touche, LLP ("Deloitte"), HudBay's auditor for production of
Deloitte's working papers prepared in connection with Deloitte's
annual audit of the NPI and opinion to the effect that the NPI had
been properly calculated. Although the application did not
initially succeed, Callinan prevailed on appeal and production of
the working papers was ordered by the Manitoba court.
Under the standstill agreement, Callinan initially planned to
audit the NPI calculations for four selected years, namely 1993,
2003, 2004 and 2007. Callinan retained Grant Thornton LLP to
conduct the independent audit. HudBay agreed to cooperate with the
auditors and to supply all available documents reasonably requested
for the audit. In return, Callinan had agreed to hold the law
suit in abeyance during the conduct of the audit while retaining
the right at its sole discretion to terminate the audit and proceed
with the law suit on reasonable notice in writing to HudBay of not
less than 30 days.
Quarterly Dividend
The board of directors of Callinan Royalties Corporation has
declared a quarterly cash dividend for the quarter ending
December 31, 2012 on its common
shares of two cents per common share
to all shareholders of record at the close of business on
December 31, 2012. The ex-dividend
date will be December 27, 2012 and it
is expected that the dividend will be paid on or about January 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 $29 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