The purchase will create a diversified mining royalty company.
Altius, which is based in Newfoundland, will acquire each outstanding Callinan share for 0.163 of an Altius share and C$0.203 in cash, valuing each Callinan common share at C$2.27 based on Altius' closing share price on the Toronto Stock Exchange as of March 4, the companies said in a statement today.
This represents a 28 percent premium to Callinan's closing price on March 4.
Upon completion of the deal, Callinan will become a wholly-owned unit of Altius and existing Altius shareholders and Callinan shareholders will own approximately 81 percent and 19 percent, respectively, of the outstanding Altius shares.
Callinan, which is based in British Columbia, will be entitled to nominate one member to the Altius board of directors upon closing of the deal.
"Callinan Management recently successfully converted the 777 mine net-profit interest royalty to a lower risk net-smelter return royalty, while enhancing the exploration upside of the Hudbay 777 mine by optioning key mineral lands to the operator," Altius’ chief executive officer Brian Dalton said in the statement.
"This achievement was a significant motivating factor for Altius in pursuing this business combination. A combined Altius and Callinan creates a leading diversified mineral royalty company, with a stronger consolidated balance sheet and shareholder base from which to further expand and diversify its royalty portfolio."
The deal will be completed in the second quarter.