TSXV: CAA
VANCOUVER, Dec. 23, 2014 /CNW/ - Callinan Royalties
Corporation ("Callinan," the "Company") (TSXV: CAA) is pleased to
announce that Gold Royalties Corporation ("Gold Royalties") and the
Company have agreed to the early repayment of the C$5.4 million principal of the convertible
debenture plus its accrued interest since July 2012. The
convertible debenture was originally scheduled to mature in
July 2016. The consideration for
redemption will be approximately C$6.9
million in cash and a 9.9% equity interest in Gold
Royalties. The closing of the transaction is subject to TSX Venture
approval for the issuance of Gold Royalties shares and to closing
of the recent Eagle Gold royalties transaction, which Gold
Royalties announced by press release earlier
today.
Callinan actively manages its portfolio of production and
generative royalty interests, as demonstrated by this repayment.
Prior to this transaction, our option to convert to share units was
at a conversion price significantly above the market, and
converting to a 60% royalty interest was declined given the
development stage of the projects. Based on this background, the
early repayment in cash offers a positive outcome, as it
significantly strengthens the balance sheet and removes any
uncertainty associated with the debenture over the remaining year
and a half until maturity. The retention of a 9.9% equity interest
makes Callinan a significant shareholder of Gold Royalties,
standing to benefit from this equity stake.
Since November 2014, Callinan has
monetized some non-core indirect royalty assets including early
prepayment of the Wallbridge Line of Credit and this debenture.
These two items will significantly increase the treasury, which
will be redeployed to seek new value-creating royalty opportunities
for shareholders. With strong technical and financial
expertise we will be the partner-of-choice in
a competitive industry.
About Callinan Royalties
Callinan Royalties Corporation is one of the oldest public
listings in Canada and one of the
first contributors to the development of the Flin Flon, Manitoba copper-zinc district.
Callinan currently holds a portfolio of royalties including its
cornerstone 6⅔% net profits interest royalty on the Hudbay 777
Mines which will be converted to a 4% NSR at January 1, 2015.
The Company invests its royalty income to provide alternative
financing options to mineral exploration and development companies
with attractive projects and excellent management.
Callinan is a dividend paying Tier 1 company currently listed on
the TSX Venture Exchange under the symbol CAA, and has received
conditional approval for graduation to the Toronto Stock Exchange.
The Corporation has a strong financial position with no debt,
recurring annual cash flow from the 777 royalties 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