RE: RE: Donner Metals Ltd.: Increased Upfront Paym Here's the NR from SSL (came out an hour later is all) This NR explains what the original deal was and clarifies the streaming details a little better than the Donner release.
Sandstorm Metals' Bracemac-McLeod Cu share now 24.5%
2012-11-01 15:17 MT - News Release
Mr. Nolan Watson reports
SANDSTORM METALS & ENERGY INCREASES COPPER STREAM WITH DONNER METALS
Sandstorm Metals & Energy Ltd. has increased its copper stream agreement with Donner Metals Ltd. to purchase an amount of copper equal to 24.5 per cent of the copper produced from the Bracemac-McLeod mine, operated by Xstrata Canada Corp. Previously, Sandstorm had completed a copper stream agreement with Donner, announced July 13, 2011, to purchase 17.5 per cent (now amended to 24.5 per cent) of the copper produced from the Bracemac-McLeod mine.
Sandstorm will make an upfront cash payment to Donner of $7-million (U.S.) to increase the Copper Stream, and will make continuing per-pound payments equal to the lesser of 80 U.S. cents per pound of copper and the then-prevailing market price of copper. If the spot price of copper falls below $2.75 (U.S.) per pound, the per-pound payments will decrease, and be equal to the lesser of 55 U.S. cents per pound of copper and the then-prevailing market price of copper. In consideration for the increased copper stream, Donner has agreed to waive its option to repurchase up to 50 per cent of the initial stream. Additionally, Sandstorm has agreed to provide Donner with a $2-million (U.S.) loan through a drawdown facility, bearing 7-per-cent interest and expiring on Feb. 1, 2014. The provision of the drawdown facility is contingent upon certain financing conditions by Donner.
"The increased copper stream with Donner will materially increase the near-term cash flow for Sandstorm Metals & Energy," said president and chief executive officer Nolan Watson. "Xstrata has been operating base metal mines in the region for decades, and we expect production to ramp up quickly in 2013."
As part of the transaction, Sandstorm Gold Ltd. has agreed to increase its gold stream to purchase 24.5 per cent of the gold and gold equivalent of silver from the Bracemac-McLeod mine, in exchange for making a payment to Donner (through a back-to-back agreement between Sandstorm Gold, and Sandstorm Metals & Energy) of $3-million (U.S.). Sandstorm Gold will make continuing per-ounce payments equal to the lesser of $350 (U.S.) per ounce of gold or gold equivalent and the then-prevailing market price of gold. In addition, Sandstorm Gold has agreed to provide Donner with a $2-million (U.S.) loan through a drawdown facility, bearing 7-per-cent interest and expiring on Feb. 1, 2014.