Callinan receives $2.36-million from Hudbay

2008-02-12 18:15 ET - News Release

Mr. Mike Muzylowski reports

CALLINAN RECEIVES 6 2/3% NET PROFITS INTEREST FROM HUDBAY MINERALS INC. 777 MINE FOR COMPLETE 4TH QUARTER

Callinan Mines Ltd. has received an interim payment of $2,36,8127 from Hudbay Minerals Inc. representing 75 per cent of Hudbay's estimate of 6-2/3 per cent of net profits from Hudbay's 777 mine in Flin Flon, Man., for the quarter ended Dec. 31, 2007. Today's payment is the first time that Hudbay's quarterly payment represents Callinan's 6-2/3-per-cent net profits interest in the 777 mine for a full three-month period.

The net profit payment is derived from an agreement made between Callinan and Hudbay dated Jan. 1, 1988. Under the agreement, Hudbay was entitled to recover all its capital, operating and other costs incurred on the 777 mine (formerly, the Callinan mine), plus interest, before Callinan was entitled to receive any net profits. The remaining 25 per cent of the quarterly payment will be based on actual net profits as defined in the agreement and is payable not more than 130 business days following the completion of Hubay's fiscal year. All future payments are due 30 business days following the end of each fiscal quarter.

Mike Muzylowski, president of Callinan, stated: "We are pleased to finally be sharing in Hudbay's profitable operations at the 777 mine which we sold to Hudbay's predecessor in 1988. The future quarterly revenues will enable Callinan to continue extensive exploration programs on its numerous advanced polymetallic exploration properties in British Columbia, Manitoba and Saskatchewan without further dilution to the shareholders."