news mining

As the mining world departs the annual PDAC conference a quiet day on the news front. Here are two news releases that did catch my attention.

Altius Minerals and Callinan Royalties - (ALS:TSX and CAA:TSXV) - Altius has made an offer to acquire all the shares of Callinan for for 0.163 of an Altius common share and C$0.203 in cash (equivalent of $2.27 per Callinan share). The deal represents a 26% percent premium on the 20 day volume weighted average price. Altius will now have 13 production based royalties on 9 different commodities in the portfolio. The deal to me looks like a win/win as Callinan shareholders get immediate cash ($0.203) and potential future upside in Altius shares. Altius recieves a nice cash flowing royalty on the 777 mine and upside potential on deals Callinan has made. In the CEO.ca chat users 'PamplonaTrader' and 'Oliver' where discussing the royalty CAA had on Excelsior Mining's Gunnison project. As of December 31 Callinan had $27.8 million in cash on the balance sheet. When you net out the cash ALS is paying about ~$85 million for the assets of Callinan.

Read: Altius and Callinan combination to create a diversified mining royalty company leader

Related: ALS - Altius bets the farm on Sherritt's Canadian coal and potash royalties

Goldsource Mines - (GXS:TSXV) - Goldsource has started initial construction at the Eagle Mountain Gold project in Guyana. After completing a $7.1 million dollar financing in December the project is fully financed for the small $5.9 million capex. The plan is to build a small mine at 1000 tpd and ramp up to 4,000 tpd that will produce 168,700 ounces over 8 years at an all in cash cost of $630 per ounce.  Full production of phase 1 is expected middle to end of this year. At $1250 gold the project generates an after tax IRR of 63%. The management team is experienced with a proven track record and is the same team behind Silvercrest Mines.

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This is not investment advice. All facts are to be checked and verified by reader. As always please do your own due diligence