Having signed a lucrative new deal with Hudbay, Callinan Royalties Corp. is both an undervalued company and a takeover target, speculates an article on the investor website Seeking Alpha.
“I think the company is a takeover target for a larger streamer/royalty company,” read the
Dec. 11 article.
“Callinan has a strong cash balance, zero debt, and is cash flowing, which allows it to pay a generous dividend...”
The Vancouver-based Callinan has an agreement with Hudbay that pays the former company a share of profits from 777 mine in Flin Flon.
The two companies recently reached a deal in which Hudbay will also pay up to $19 million to Callinan in the coming years.
Under the deal, Callinan will not only drop its years-old lawsuit against Hudbay, but also let the company explore Flin Flon’s promising War Baby claim by way of an option agreement.
The settlement gives Hudbay the chance to obtain full ownership of War Baby, also known as 777 Deeps, over a four-year period.
