Callinan Royalties and Excelsior Mining Close Investment Agreement

TSXV: CAA

VANCOUVER, Aug. 1, 2013 /CNW/ - Callinan Royalties Corporation ("Callinan", the "Company") (TSXV: CAA) has completed the transaction previously announced on July 23, 2013 with Excelsior Mining Corp ("Excelsior"). Callinan has invested C$1 million by way of a private placement in Excelsior and C$2 million to purchase a 0.5% Gross Revenue Royalty (a "GRR") on the Gunnison Copper Project in Arizona, USA. Callinan was granted options to acquire up to 3.0% GRR on the Gunnison Copper Project for a total of $19M following completion of key development and construction milestones. For more details on the transaction, please refer to the news release dated July 23, 2013.

Under the Share Purchase and Royalty Option Agreement between Callinan, Excelsior Mining Corp. ("Excelsior") and James L. Sullivan Trust (the "Agreement"), Callinan

(a)	purchased 6,250,000 common shares of Excelsior Mining Corp. at a price of $0.16 per common share for aggregate consideration of $1,000,000 (the "Placement Shares"), and
(b)	acquired a royalty which it is entitled to put to Excelsior (the "Royalty Put Option") in exchange for up to $2,000,000 of common shares of Excelsior at a price of $0.25 per common share, totaling 8,000,000 common shares (the "Royalty Put Shares").  The Royalty Put Right will expire at the earliest of 24 months from the Closing Date or the exercise of the first royalty option granted to Callinan pursuant to the Agreement.

The Placement Shares represent 10.6% of Excelsior's issued and outstanding common shares after giving effect to the issuance of the Placement Shares.  Pursuant to the Agreement, the issuance of the Royalty Put Shares cannot result in Callinan owning more than 19.9% of the issued and outstanding common shares after such issuance.

Callinan has sole ownership and control of the Placement Shares and the Royalty Put Option, and does not have any direct or indirect interest in any other securities of Excelsior.  The securities acquired under the Agreement were acquired for investment purposes, and Callinan has no intention at this time to acquire ownership or control over additional securities of Excelsior.

The securities acquired by Callinan pursuant to the Agreement were acquired in reliance on the $150,000 "minimum amount exemption" in section 2.10 of National Instrument 45-106 of the Canadian Securities Administrators.

On Behalf of the Board of Directors,

Roland Butler

Roland Butler, CEO

About Excelsior

Excelsior is an exploration company with a copper project located within the Copper Porphyry Belt of Arizona. The Gunnison Copper Project is located close to the required infrastructure and its oxide copper resource has the potential to be mined using in-situ recovery methods. The Excelsior team consists of experienced professionals with proven track records of advancing projects towards production.

Further details about Excelsior can be found at: http://www.excelsiormining.com.

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 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 49.1 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 more information, please visit www.callinan.com or contact:

Roland Butler, CEO
Callinan Royalties Corporation
[phone]
[email protected]

Tamara Edwards, CFO
Callinan Royalties Corporation
[phone]
[email protected]

Corporate Office:
1110 - 555 West Hastings Street
Vancouver, BC
Canada, V6B 4N4