TSXV: CAA
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 table:
|
3 months
December 31, 2012 |
3 months
December 31, 2011 |
6 months
December 31, 2012 |
6 months
December 31, 2011 |
Royalty Income |
$5.22 million |
$6.73 million |
$9.65 million |
13.15 million |
Net Income |
$2.89 million |
$4.34 million |
$5.35 million |
13.97 million |
Net Income /
Share Fully Diluted |
$0.06 |
$0.09 |
$0.11 |
$0.27 |
Cash Flow from
Operation |
$1.78 million |
$0.76 million |
$8.88 million |
$9.73 million |
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 complimentary."
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 stopes.
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 $38-42
/tonne.
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.
Financial Performance
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 nature.
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.
Corporate Update
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 underlying value.
Quarterly Dividend
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
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