VANCOUVER, Sept. 3, 2013 /CNW/ - Sandstorm Metals &
Energy Ltd. ("Sandstorm Metals" or the "Company") (TSX-V: SND) is
pleased to announce that it has converted its copper stream (the
"Copper Stream") along with Sandstorm Gold Ltd.'s ("Sandstorm
Gold") gold stream (the "Gold Stream") on the Bracemac-McLeod Mine
("Bracemac-McLeod") into a 3% net smelter returns royalty ("NSR")
based on 100% of production from Bracemac-McLeod. Bracemac-McLeod
is located in Matagami, Quebec and
is owned and operated by a subsidiary of Glencore Xstrata plc
("Glencore"). The 3% NSR will be split between Sandstorm Metals and
Sandstorm Gold (together "Sandstorm") based on the respective funds
contributed to Donner Metals Ltd. ("Donner") in relation to the
Copper Stream and Gold Stream, resulting in Sandstorm Metals
receiving 80% of the proceeds from the 3% NSR (equivalent to a 2.4%
NSR) and Sandstorm Gold receiving 20% of the proceeds from the 3%
NSR (equivalent to a 0.6% NSR).
Sandstorm Metal's Copper Stream agreement with
Donner entitled the Company to purchase 24.5% of the copper
produced from Bracemac-McLeod at US$0.80 per lb. Donner held a 35% participating
interest in Bracemac-McLeod (the "Joint Venture") but recently
announced its inability to meet the cash calls under their
Development and Operating Agreement with Glencore (see Donner press
release dated August 13, 2013).
Sandstorm Metals had the option to remedy the default by making the
cash call payments to Glencore however this would have required
Sandstorm Metals to raise a significant amount of equity. In
order to avoid diluting shareholders, Sandstorm Metals and
Sandstorm Gold have agreed the following with Donner and
Glencore:
- Glencore has issued a 3% NSR to Sandstorm Metals on 100% of
production from Bracemac-McLeod, which will be split 80% Sandstorm
Metals and 20% Sandstorm Gold, in exchange for Donner's 35%
participating interest in the Joint Venture and an option to
acquire the Donner shares held by Sandstorm Metals.
- Sandstorm Metals and Sandstorm Gold have relinquished the
Copper Stream and the Gold Stream respectively.
- Sandstorm Metals will issue 1,333,334 shares of Sandstorm
Metals (at a deemed price of $1.50
per share) to Donner and Donner has provided each of Glencore and
Sandstorm Metals with an irrevocable and unconditional release and
discharge of any claim by Donner against Glencore or Sandstorm
Metals and Donner agreed to an orderly completion of the
transactions.
- After the proceeds from the 3% NSR exceed $49 million, from that point forward, Sandstorm
will pay a 1% NSR to Donner out of the proceeds of the 3% NSR.
Sandstorm's President and CEO Nolan Watson commented, "Although Sandstorm had
the ability to assume and maintain ownership of the 35% joint
venture in the event of a Donner default, the ongoing capital
requirements would have required raising a considerable amount of
capital resulting in significant dilution for shareholders. This
transaction allows us to avoid dilution and the 3% NSR will begin
generating cash flow in the fourth quarter of this year,
transitioning Sandstorm Metals into a cash flowing company."
ABOUT SANDSTORM METALS & ENERGY
Sandstorm Metals & Energy Ltd. is the
world's first diversified streaming company. Sandstorm provides
upfront financing to resource companies that are looking for
capital and in return, receives a commodity streaming agreement.
This agreement gives Sandstorm the right to purchase a percentage
of the commodity produced, for the life of the asset, at a fixed
price. Sandstorm has acquired a portfolio of three commodity
streams and two NSR royalties in copper, palladium, zinc-lead and
natural gas. Sandstorm plans to grow its production base through
the acquisition of additional commodity streams.
Sandstorm Metals & Energy is focused on low
cost operations with excellent exploration potential and strong
management teams. Sandstorm has completed royalty and commodity
purchase agreements with Canadian Zinc Corp., Colossus Minerals
Inc., a subsidiary of Glencore Xstrata plc, Entrée Gold Inc. and
Thunderbird Energy Corp.
For more information visit:
www.sandstormmetalsandenergy.com
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
Except for the statements of historical fact
contained herein, the information presented constitutes
"forward-looking information" or "forward-looking statements"
within the meaning of applicable Canadian securities legislation.
Forward-looking statements can generally be identified by the use
of forward-looking terminology such as "may", "will", "expect",
"intend", "estimate", "anticipate", "believe", "continue", "plans",
or similar terminology. Forward-looking information is based on
reasonable assumptions that have been made by Sandstorm as at the
date of such information and is subject to known and unknown risks,
uncertainties and other factors that may cause the actual results,
level of activity, performance or achievements of Sandstorm to be
materially different from those expressed or implied by the
forward-looking information, including but not limited to: the
impact of general business and economic conditions; the absence of
control over operations from which Sandstorm will purchase
commodities and risks related to those operations, including risks
related to international operations, government and environmental
regulation, actual results of current exploration activities,
conclusions of economic evaluations and changes in project
parameters as plans continue to be refined; problems inherent to
the marketability of commodities; industry conditions, including
fluctuations in the price of commodities, fluctuations in foreign
exchange rates and fluctuations in interest rates; stock market
volatility; competition; as well as those factors discussed in the
section entitled "Risks to Sandstorm" in Sandstorm's annual report
for the financial year ended December 31,
2012. Although Sandstorm has attempted to identify important
factors that could cause actual results to differ materially from
those contained in forward-looking information, there may be other
factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such information will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such information.
Accordingly, readers should not place undue reliance on
forward-looking information. Sandstorm does not undertake to update
any forward-looking information that is contained or incorporated
by reference herein, except in accordance with applicable
securities laws. Sandstorm does not provide any representation as
to its comparability with other companies in its industry
including, but not limited to, Franco-Nevada Corporation, BHP
Billiton and Rio Tinto.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Sandstorm Metals & Energy Ltd.