Why the Calidus (ASX:CAI) share price is dipping today

The Calidus (ASX: CAI) share price is dipping lower today after the company purchased life of mine royalties in the Warrawoona Gold Project.
The post Why the Calidus (ASX:CAI) share price is dipping today appeared first on The Motley Fool Australia. –

asx share price fall represented by lady in striped tshirt making sad face against orange background

The Calidus Resources Ltd (ASX: CAI) share price has slipped lower today. This comes after the company purchased Warrawoona profit royalty in a bid to free up cash flow for the life of the gold mine.

At the time of writing, the Calidus share price is 1.04% lower to 47.5 cents. In comparison, the S&P/ASX 200 Materials Index (ASX: XMJ) is following a similar fate, down 0.6% to 16,401 points.

What did Calidus announce?

Calidus told the market today it has bought a 1.25% profit royalty over two tenements located in the Warrawoona Gold Project.

The company paid $45,000 and issued 750,000 Calidus shares to the executors of the estate for life of mine royalty.

Calidus said there remained one other 1.25% profit royalty over the tenements. This is the only non-statutory royalty on granted mining leases at Warrawoona.

More on the Warrawoona Gold Project

Situated in the East Pilbara district of the Pilbara goldfield region of Western Australia, the project has been marred historically with disjointed ownership.

Now controlled by Calidus, the entire Warrawoona Greenstone Belt covers a total of 780sq km. The project itself is regarded as one of the highest margins and significant gold projects within Australia.

Callidus managing director Dave Reeves, welcomed the purchase decision, saying:

The purchase of this life of mine royalty not only generates additional cash flow for the company but reduces the amount of time required to administer the royalty, allowing more focus on the core aspects of production.

The parties associated with the royalty have a long association with Warrawoona and we welcome them as shareholders to Calidus.

Calidus share price snapshot

The Calidus share price has climbed higher since the beginning of last year, reflecting gains of more than 90%.

The company’s shares reached a multi-year low of 17 cents in March in the COVID-19 fallout. However, moving in small peaks and troughs, the Calidus share price gradually regained ground to hit a high of 73 cents in mid-October.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Calidus (ASX:CAI) share price is dipping today appeared first on The Motley Fool Australia.

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