Callinan increases Butler placement to $4.38-million

Callinan Mines Ltd (C:CAA)
Shares Issued 46,642,121
Last Close 1/24/2011 $2.78
Tuesday January 25 2011 - News Release

Mr. Mike Muzylowski reports

CALLINAN AMENDS TERMS OF PRIVATE PLACEMENT

Callinan Mines Ltd., further to its news release in Stockwatch dated Oct. 25, 2010, has amended the pricing terms of its private placement of two million units to Roland Butler. In October, 2010, Mr. Butler was appointed vice-president of Callinan Mines and to its board of directors and, upon closing the private placement, he will become a significant shareholder of Callinan Mines.

Spinout proposal

Following a proposed reorganization of Callinan's assets (the spinout proposal) whereby Callinan will form a new exploration company (NewCo), Callinan plans to continue as a royalty company with Mr. Butler as the chief executive officer. Callinan's strategy will be to engage in early-stage royalty creation through prospect generation and financing, complemented by selective royalty acquisitions.

Under the terms of the spinout proposal, existing Callinan shareholders will receive the same percentage interest in Newco as they presently hold in Callinan such that, following the implementation of the spinout proposal, the shareholders will hold shares in two companies, the existing Callinan and newly incorporated Newco. Callinan's royalty assets and its War Baby mineral claim will be held by Callinan, and its current exploration assets will be held by Newco. The spinout proposal is subject to regulatory and shareholder approval.

Private placement

Each unit of the private placement will be priced at $2.19 to raise total proceeds of $4.38-million and each warrant will be exercisable to purchase a common share of Callinan for a period of five years at the price of $2.58. All other terms of the private placement remain the same. The private placement is subject to final acceptance for filing by the TSX Venture Exchange.