punch in link to new news letter !!!!!CALLINAN MINES : Both a short term as well as a long term “ !!! B U Y !!! “
CHINA, as the top BRIC , wants stability and sustained growth. It appears to have an insatiable demand for the commodities that Canada produces. It has Trillions of surplus cash and only a 16% of GNP debt burden. There is also the possibility of a U.S. recovery, although they have to deal with an almost 100% of GNP debt burden. The thrust towards alternative clean electrical energy will place continued demands on base metals, particularly on copper. This bodes well for Callinan’s profit outlook. Consequently, Callinan is making the right moves at the right time:
Callinan as split into two companies: Royalty Co. & Exploration Co.
THE ROYALTY COMPANY (CALLINAN)
Consists of the 6 2/3% NPI royalty from the HudBay operated 777 Mine plus the $ .25 / ton royalty. This also includes potential royalty payments from approx. 80 additional leases in close proximity to the 777 Mine. In addition, it will also include the War Baby leases which are contiguous to the 777 and are believed to contain an “enriched” extension of the 777 ore body. Previous diamond drilling, by Callinan , revealed 32’ of 3.64% Copper ( including 5 meters of 6.67% copper, as well as 30.6’ of 2.08% copper. The Royalty company will be headed by Roland Butler, a co-founder of Altius Minerals corporation. When the separation is complete, the company should have expanding revenue, no debt, and MINIMAL OVERHEAD. A dividend payment to shareholders is a distinct possibility. On a comparative basis with other royalty companies, or by a calculation of 10-20 x earnings, the shares should trade in excess of $ 4.00 / share.
STRATEGIC ADVANTAGE:
In view of the Manitoba Court’s rulings re. Callinan’s litigation against HudBay concerning the redress of unpaid royalty payments plus damages, the Royalty Co., devoid of the exploration properties, provides a clear takeover target. HudBay knows or has known better than anyone, the true value of the NPI . In addition, they also are cognizent of the War Baby’s intrinsic value as well as its addition to the 777 Mine’s life. Also, HudBay’s newly appointed CEO, David Garofalo, has made public statements to the effect that he will improve HudBay’s culture in the field of transparency and corporate governance. Current speculation has it that HudBay could be hit by a court decision of, in excess of $100 million, not to mention the bigger hit by the “law of unintended consequences.” A settlement to this aggravation looks like common sense.
THE EXPLORATION COMPANY: (NEWCO)
Callinan shareholders will receive shares, the formula to be determined, in NEWCO. The company will be well financed and led by one of Canada’s top geological teams. It will include: 15 Manitoba properties, 1 Saskatchewan property and the huge Coles Creek claims in B.C. These prospects have all been selected by Mike Muzylowski, who has spent most of his geological years examining the hills and valleys of Manitoba. Mike has been recognized as one of Canada’s leading ‘Mine Finders’.
As former Canadian Prime Minister Trudeau said, “ The universe will unfold as it should.” The shroud of secrecy appears to be lifting on the NPI mystery, thereby casting a new fresh light on a new day in the previously confrontational life of HudBay/ Callinan relations and inevitable enhanced fortunes for Callinan shareholders.
Trading Symbol: CAA: TSX venture
Closing price: $ 3.20 Jan.7, 2011
Detailed information: www.callinan.com
***MOST RECENT ANALYSIS( Jan 7, 2011): Hallgarten & Co. cecclestone@hallgartenco.com
METAL AUGMENTOR: “ Royalty Company Report” ( thorough analysis)
www.hallgartenco.com