PR Newswire
VANCOUVER, Jan. 19, 2016
VANCOUVER, Jan. 19, 2016 /PRNewswire/ - Sandstorm Gold Ltd. ("Sandstorm" or the "Company") (NYSE MKT: SAND, TSX: SSL) is pleased to announce that it has agreed to acquire 56 royalties (the "Royalty Package") from Teck Resources Limited and its affiliates (collectively, "Teck") for total consideration of US$22 million (C$32 million), payable in US$1.4 million (C$2 million) in cash and US$20.6 million (C$30 million) in common shares of the Company (the "Common Shares") (the "Transaction"). Certain royalties in the Royalty Package are subject to rights of first offer and first refusal as well as the requirement for various transfer consents and as a result, the Transaction will have a number of closing dates, with today being the first such closing date.
As consideration for the royalties, Sandstorm has issued a total of 8,365,863 Common Shares priced at C$3.57 per share, the price of the Common Shares being based on the ten (10) day volume weighted average price of the Company's Common Shares traded on the Toronto Stock Exchange. A portion of the Common Shares will be held in escrow to be released on subsequent closing dates.
— TRANSACTION HIGHLIGHTS
— ROYALTY PORTFOLIO: KEY ASSETS
The Royalty Portfolio includes the following key assets:
"The acquisition of this royalty package from Teck materially enhances Sandstorm's existing portfolio while allowing the Company to maintain a strong balance sheet," said Sandstorm's President & CEO Nolan Watson. "We believe this deal enhances, on a per share basis, the Company's production growth, cash flow growth, NAV, diversification and precious metal optionality. With over 130 streams and royalties now in our portfolio, we believe Sandstorm is well positioned for an exciting future."
Hot Maden – 2.0% NSR
The Hot Maden gold-copper project is located approximately 20 kilometres ("km") southeast of Artvin and 130 km northeast of Erzurum in north-eastern Turkey. A highly successful 2015 drill campaign led to the release, by Mr. Stewart Coasts from RungePincockMinarco, of a maiden mineral resource estimate for the high-grade mineralisation at Hot Maden as follows:
High grade gold-copper mineralisation was first intersected at Hot Maden in the Phase I diamond drill program, which was completed in January 2015 and included the following key intercepts (not true widths):
The immediate focus for exploration at Hot Maden is to continue with resource delineation drilling within, and around, the main mineralised zone. Future work will include geophysics and new target generation activities along an extended portion of the Hot Maden Fault Zone.
Hackett River – 2.0% NSR
The Hackett River property is located in Nunavut, Canada, approximately 480 km northeast of Yellowknife. Hackett River is a silver-rich volcanogenic massive sulphide project and is one of the largest undeveloped projects of its kind. The property is made up of four massive sulphide deposits that occur over a 6.6 km strike distance.
A preliminary economic assessment updated in 2010 evaluated a possible large-scale open pit and underground operation, processing up to 17,000 tonnes per day. The most recent Technical Report, completed in 2013, contained a mineral resource estimate prepared by Sabina Gold and Silver Corporation, with technical support from Xstrata Canada Corporation, now Glencore plc. The updated resource reported 25.0 million tonnes of indicated resources containing 4.2% zinc and 130.0 g/t silver plus 57.0 million tonnes of inferred resources with 3.0% zinc and 100.0 g/t silver.
Sandstorm's 2.0% NSR royalty covers 7,141 hectares of the Hackett River property including the licenses where the mineral resources have been defined.
Lobo-Marte – 1.75% NSR (on 60% of production)
The Lobo-Marte project contains two potential open-pit gold resources located in the Maricunga Gold District of Chile. The resources are seven kilometers apart, and are located 60 km south of Kinross's La Coipa mine, and 60 km north of Kinross's Refugio mine, 100 kilometres east of Copiapó.
Kinross completed a prefeasibility study at Lobo-Marte that contemplated a heap-leach operation and submitted an environmental and social impact study to Chilean authorities. Kinross has since withdrawn its permit application due to changes in the plan of operations, project economics, and other factors. As a result of the permit withdrawal, much of the historic 7.0 million ounces of measured and indicated gold resources, contained in 185.4 Mt @ 1.2 g/t gold, were reclassified from historic mineral reserves. Future development and operations at Lobo-Marte will require the re-initiation of the permitting process.
Sandstorm holds a 1.75% net smelter return royalty on 60% of future production at Lobo-Marte, up to a maximum of US$40 million.
Copper Mountain – 5.0% NSR on copper, 2.5% NSR on other metals
The Copper Mountain mine is a large-scale, open pit copper-gold-silver mine, operated by Copper Mountain Mining Corporation. The mine is located 300 km east from the port of Vancouver, in southern British Columbia. Mining began in 2011 and with the recent addition of a secondary crusher to the project, the mine has been able to achieve production rates up to 40,000 tonnes per day from multiple open pits. During the full year 2014, Copper Mountain produced 81 million pounds of copper, 22,600 ounces of gold and 443,800 ounces of silver at an operating cost of $1.49/pound, net of by-products.
Sandstorm holds a 5.0% NSR on copper, and a 2.5% NSR on all other metals produced from the Alabama and Virginia pits, located to the north of the Copper Mountain Superpit. The copper royalty is a sliding scale royalty and is a 5.0% NSR at copper prices above US$1.20 per pound. Mining operations are active at the Virginia pit and Sandstorm expects to receive cash flow from this royalty in 2016.
Ağı Dağı/Kirazli – US$10/ounce
The Ağı Dağı and Kirazlı gold development projects are located in the Çanakkale Province of northwestern Turkey. A positive pre-feasibility study (PFS) was completed by Dr. Dennis Ferrigno, CAF & Associates, LLC et al. on Ağı Dağı and Kirazli in 2012 with both projects evaluated for a potential stand-alone open-pit, heap-leach operation. The PFS evaluated production for an average 99,000 ounces of gold per year over a 5 year mine life at Kirazli. The PFS at Ağı Dağı evaluated production for an average of 143,000 ounces of gold per year over a 7 year mine life. Initial production from Ağı Dağı is projected to commence approximately 18 months after first production at Kirazli.
Sandstorm holds a US$10/ounce production royalty payable by Newmont, subject to a maximum of 600,000 ounces from Ağı Dağı and a maximum of 250,000 from Kirazli.
Öksüt – 0.5%-1.5% NSR
The Öksüt property contains an epithermal precious metals resource, located on the Anatolian Plateau in south-central Turkey, near the city of Develi. The property is owned and operated by Centerra. In July 2015, Centerra completed a feasibility study which evaluated a conventional truck and shovel, open pit, heap leach mining operation. The property contains probable reserves of 26.1 Mt @ 1.4 g/t gold, containing 1.16 million ounces of gold. The Öksüt feasibility study evaluates a mine plan that incorporates two open pits that are operated over an eight year mine life. Centerra has received environmental permits and pending final permits proposes to begin construction in mid-2016 with heap leach processing to begin in the first quarter of 2017.
Sandstorm holds a 0.5% to 1.5% NSR royalty based on cumulative production at the mine. The 0.5% NSR royalty begins after 250,000 ounces have been produced at Öksüt. Centerra has a right of first offer on the sale of the Öksüt royalty.
— OTHER ROYALTIES
Below is a list of the other assets that make up the Royalty Package.
PROJECT |
OPERATOR |
LOCATION |
STATUS |
TERMS |
Sheerness |
Westmoreland Coal Company |
Canada |
Producing |
5% GRR |
Magmont |
The Doe Run Resources Corporation |
USA |
Producing |
1.25% NSR |
Altintepe |
Bahar Madencilik Sanayi ve Ticaret A.S. |
Turkey |
Producing |
1.5% NSR |
Ajax |
KGHM Polska Miedz |
Canada |
Development |
1.5% NSR |
Keno Hill |
Alexco Resources Corp. |
Canada |
Development |
25% NPI |
Ruddock Creek |
Imperial Metals Corporation |
Canada |
Development |
1% NSR |
Los Verdes |
Minera Alamos Sonora S.A. de C.V. |
Mexico |
Development |
2% NSR |
Box |
Fortune Bay Corp |
Canada |
Advanced Exploration |
1.5% NSR |
Homestake Ridge |
Homestake Resource Corporation |
Canada |
Advanced Exploration |
2% NSR |
Railroad |
Gold Standard Ventures Corporation |
USA |
Advanced Exploration |
3% NSR |
Whistler |
Brazil Resources Inc. |
USA |
Advanced Exploration |
2% NPI |
Karaagac |
Anadolu Export Maden Sanayi ve Ticaret A.S. |
Turkey |
Advanced Exploration |
1.5% NSR |
Tac/Corak |
Cengiz Kaya |
Turkey |
Advanced Exploration |
1.5%-2% NSR |
Tavsan (Red Rabbit) |
Ariana Resources plc |
Turkey |
Advanced Exploration |
2% NSR |
Abitibi/Sarah Lake |
Commander Resources Ltd. |
Canada |
Exploration |
1% NSR |
Big Bulk |
LCT Holdings Inc. |
Canada |
Exploration |
1.5% NSR |
Butterfly Lake |
North Arrow Minerals Inc. |
Canada |
Exploration |
0.71% GOR |
Caramelia |
Huakan International Mining Inc. |
Canada |
Exploration |
2% NSR |
CT |
Kreft Resources Ltd. |
Canada |
Exploration |
0.75% NSR |
Lorrain |
Canadian Silver Hunter Inc. |
Canada |
Exploration |
2% NSR |
Mainstreet |
Beaufield Resources Inc. |
Canada |
Exploration |
1.2% NSR |
New Afton |
New Gold Inc. |
Canada |
Exploration |
2% NSR |
Rossland |
Rossland Resources Inc. |
Canada |
Exploration |
1%-2% NSR |
Snip 2 |
Colorado Resources Ltd. |
Canada |
Exploration |
2% NSR |
Summit Lake |
Rainy Mountain Royalty Corp. |
Canada |
Exploration |
1.9% NSR |
Ten Mile Creek |
Bernie Kreft |
Canada |
Exploration |
1.5% NSR |
Tsacha |
Independence Gold Corp. |
Canada |
Exploration |
2% NSR |
Wrigley |
Devonian Metals Inc. |
Canada |
Exploration |
2% NSR |
Aurora |
Carlin Resources LLC |
USA |
Exploration |
2% NSR |
Big W |
Barrick Gold U.S. Inc. |
USA |
Exploration |
3% NSR |
Cabin Creek |
McEwen Mining Inc. |
USA |
Exploration |
10% NPI |
Cherry Creek |
McEwen Mining Inc. |
USA |
Exploration |
1.5% GOR |
Lichen |
Silver Phoenix Resources Inc. |
USA |
Exploration |
2% NSR |
Shotgun |
TNR Gold Corp. |
USA |
Exploration |
5% NPI |
Van Stone |
Equinox Resources (WASH) Inc. |
USA |
Exploration |
1.5% NSR |
Amapari |
Mineracao Amapari S.A. |
Brazil |
Exploration |
3% NPI |
Rio Novo South |
Rio Minas Mineracao S.A. |
Brazil |
Exploration |
0.75% NSR |
Gatita |
Compania Minera Potosi S.A. |
Peru |
Exploration |
1% NSR |
Huajoto |
Alturas Minerals Corp. |
Peru |
Exploration |
0.5%-1% NSR |
Mario |
Fortuna Silver Mines Inc. |
Peru |
Exploration |
2% NSR |
Arcas |
Altius Minerals Corporation |
Chile |
Exploration |
1% NSR |
Celeste |
Coro Mining Corp. |
Chile |
Exploration |
2% NSR |
Pampa Lina |
Sierra Gorda Sociedad Contractual Minera |
Chile |
Exploration |
0.3% NSR |
Kiskama |
Talga Resources Ltd. |
Sweden |
Exploration |
1% NSR |
Masugnsbyn |
Talga Resources Ltd. |
Sweden |
Exploration |
1% NSR |
Vittangi |
Talga Resources Ltd. |
Sweden |
Exploration |
1% NSR |
Hasandagi |
Newmont Mining Corporation |
Turkey |
Exploration |
2% NSR |
Muratdagi |
Kenz Enerji ve Madencilik San. Ve Tic A.S. |
Turkey |
Exploration |
2% NSR |
Tombul |
Elazig Baskil Madencilik A.S. |
Turkey |
Exploration |
2% NSR |
— RESERVES AND RESOURCES
Hot Maden
The following table contains the most recent historic mineral resource estimate for Hot Maden. The historic mineral resource is included in Technical Report titled "Hot Maden Gold Copper Project, Artvin Province, Turkey" with an effective date of September 30, 2015.
Grade |
Contained Metal | ||||||
Indicated Resources |
Tonnes |
Au |
Cu |
AuEq |
Au |
Cu |
AuEq |
Main Zone - Ultra High Grade |
1,031,000 |
29.2 |
4.0 |
35.4 |
967,000 |
41,000 |
1,174,000 |
Main Zone - High Grade |
3,199,000 |
5.2 |
1.8 |
8.0 |
537,000 |
56,000 |
822,000 |
Main Zone - Low Grade |
481,000 |
0.9 |
1.0 |
2.4 |
14,000 |
5,000 |
37,000 |
Total |
4,710,000 |
10.0 |
2.2 |
13.4 |
1,518,000 |
102,000 |
2,033,000 |
Grade |
Contained Metal | ||||||
Inferred Resources |
Tonnes |
Au |
Cu |
AuEq |
Au |
Cu |
AuEq |
Main Zone - Ultra High Grade |
326,000 |
36.2 |
3.3 |
41.4 |
379,000 |
11,000 |
434,000 |
Main Zone - High Grade |
2,291,000 |
3.1 |
2.0 |
6.2 |
228,000 |
45,000 |
455,000 |
Main Zone - Low Grade |
819,000 |
0.8 |
1.0 |
2.4 |
21,000 |
8,000 |
62,000 |
Peripheral Lodes |
218,000 |
1.8 |
0.4 |
2.4 |
13,000 |
1,000 |
17,000 |
Total |
3,654,000 |
5.5 |
1.8 |
8.2 |
640,000 |
65,000 |
968,000 |
Hackett River
The following table contains the most recent historic mineral resource estimate for the Hackett River project, as described in the Technical Report dated July 31, 2013.
Grade | |||||||
Category |
Million |
Zn (%) |
Pb (%) |
Cu (%) |
Ag (g/t) |
Au (g/t) | |
Indicated Resources |
25 |
4.2 |
0.6 |
0.5 |
130 |
0.3 | |
Inferred Resources |
57 |
3.0 |
0.5 |
0.4 |
100 |
0.2 |
Lobo-Marte
The following table contains the most recent historic mineral resource estimate that was prepared by Kinross Gold Corp. with an effective date of December 31, 2014. This resource estimate is not compliant with NI 43-101 requirements.
Category |
Tonnes (kt) |
Grade Au |
Contained Au | |
Measured Resources |
96,646 |
1.13 |
3,525,000 | |
Indicated Resources |
88,720 |
1.22 |
3,489,000 | |
Measured & Indicated Resources |
185,366 |
1.18 |
7,014,000 | |
Inferred Resources |
2,003 |
1.07 |
69,000 |
Copper Mountain
The following table contains the most recent historic mineral resource estimate for the Virginia and Alabama pits at the Copper Mountain property:
Grade |
Contained Metal | ||||||||
Category |
Pit |
Tonnage |
Copper |
Gold |
Silver |
CuEq |
Copper |
Gold |
Silver |
Measured & Indicated |
Virginia |
12,197 |
0.34% |
0.15 |
1.23 |
0.35 |
91,339 |
58,819 |
482,317 |
Alabama |
19,113 |
0.25% |
0.10 |
1.47 |
0.25 |
105,312 |
61,477 |
903,276 | |
Inferred Resources |
Virginia |
11,888 |
0.27% |
0.13 |
0.94 |
0.27 |
70,743 |
49,685 |
356,262 |
Alabama |
12,372 |
0.23% |
0.09 |
1.23 |
0.21 |
62,716 |
35,798 |
489,237 |
Ağı Dağı/Kirazli
The following table contains the most recent historic mineral resource estimate that was reported by Alamos Gold Corp. in the Company's 2014 Mines and Projects-Reserves and Resources statement, dated December 31, 2014.
Grade |
Contained Metal | ||||
Indicated Resources |
Tonnes (kt) |
Gold (g/t) |
Silver (g/t) |
Gold (Oz) |
Silver (Oz) |
Kirazli |
32,734 |
0.72 |
8.74 |
757,877 |
9,201,790 |
Agi Dagi |
90,052 |
0.59 |
4.09 |
1,694,736 |
11,849,336 |
Total |
122,786 |
0.62 |
5.33 |
2,452,613 |
21,051,126 |
Grade |
Contained Metal | ||||
Inferred Resources |
Tonnes (kt) |
Gold (g/t) |
Silver (g/t) |
Gold (Oz) |
Silver (Oz) |
Kirazli |
5,689 |
0.59 |
8.96 |
107,635 |
1,638,365 |
Agi Dagi |
16,760 |
0.46 |
2.85 |
245,214 |
1,533,608 |
Total |
22,449 |
0.49 |
4.40 |
352,849 |
3,171,973 |
Öksüt
The following table contains the most recent historic mineral reserve and resource estimate for the Öksüt property as of June 30, 2015.
Category |
Tonnes |
Grade Au |
Contained Au | |
Proven Resources |
- |
- |
- | |
Probable Resources |
26,137 |
1.4 |
1,162,000 | |
Proven & Probable Resources |
26,137 |
1.4 |
1,162,000 | |
Measured Resources |
2,100 |
0.7 |
46,000 | |
Indicated Resources |
4,698 |
0.7 |
111,000 | |
Measured & Indicated Resources |
6,798 |
0.7 |
157,000 | |
Inferred Resources |
2,380 |
0.8 |
64,000 |
Keith Laskowski (MSc), Sandstorm's Vice President, Technical Services is a Qualified Professional (#01221QP) of the Mining and Metallurgical Society of America and a Qualified Person as defined by Canadian National Instrument 43-101. Mr. Laskowski has not independently verified the resource estimates contained in this disclosure. He has reviewed and approved the technical information in this press release.
ABOUT SANDSTORM GOLD
Sandstorm Gold Ltd. is a gold streaming and royalty company. Sandstorm provides upfront financing to gold mining companies that are looking for capital and in return, receives the right to a percentage of the gold produced from a mine, for the life of the mine. Sandstorm has acquired a portfolio of 132 streams and royalties, of which 19 of the underlying mines are producing. Sandstorm plans to grow and diversify its low cost production profile through the acquisition of additional gold streams and royalties.
For more information visit: www.sandstormgold.com
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
This press release contains "forward-looking statements", within the meaning of the U.S. Securities Act of 1933, the U.S. Securities Exchange Act of 1934, the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, concerning the business, operations and financial performance and condition of Sandstorm. Forward-looking statements include, but are not limited to, statements with respect to the future price of gold, the estimation of mineral reserves and resources, realization of mineral reserve estimates, and the timing and amount of estimated future production. 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 statements are made based upon certain assumptions and other important factors that, if untrue, could cause the actual results, performances or achievements of Sandstorm to be materially different from future results, performances or achievements expressed or implied by such statements. Such statements and information are based on numerous assumptions regarding present and future business strategies and the environment in which Sandstorm will operate in the future, including the price of gold and anticipated costs. Certain important factors that could cause actual results, performances or achievements to differ materially from those in the forward-looking statements include, amongst others, gold price volatility, discrepancies between actual and estimated production, mineral reserves and resources and metallurgical recoveries, mining operational and development risks relating to the parties which produce the gold Sandstorm will purchase, regulatory restrictions, activities by governmental authorities (including changes in taxation), currency fluctuations, the global economic climate, dilution, share price volatility and competition.
Forward-looking statements are subject to known and unknown risks, uncertainties and other important 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 such forward-looking statements, including but not limited to: the impact of general business and economic conditions, the absence of control over mining operations from which Sandstorm will purchase gold and risks related to those mining 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, risks in the marketability of minerals, fluctuations in the price of gold, fluctuation in foreign exchange rates and interest rates, stock market volatility, 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, 2014 available at www.sedar.com. Although Sandstorm has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Sandstorm does not undertake to update any forward looking statements that are contained or incorporated by reference, except in accordance with applicable securities laws.
SOURCE Sandstorm Gold Ltd.