GREY:STTYF - Post by User
Comment by
materialsgirlon Apr 06, 2014 1:35pm
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Post# 22417694
RE:Sandstorm Metals: Destroying Shareholder Value For 3 Years
RE:Sandstorm Metals: Destroying Shareholder Value For 3 Yearspogohere;
You said that their streaming business proved to be a failure. The business model is still valid in my opinion but SND will not be able to get going becuse of the past.
100% of their investments were eithr total disasters (most of them) or just bad ( a few)
The specific royalty investments they made were poorly thought out. They obviously know this now.
They ignored the basic pillars for success
1 choose a solid company one that is relatively large (e g $billions in future sales)
2 choose very safe jurisdictions
3 base investment only on a BFS not on an imagined dream such as CSI
4 make sure that no money goes into the operation until at least 60% of capex has been spent and that there is a clear path for financing the balance needed for capex and working capital
5 thoroughly check out management
6 make sure that royalties account for less than 20% of capex and that royalties do not take away more than about 8% of revenue. Otherwise the company may choke
7 skip all companies that are merely junior partners that have no control over the operation. That would include Donner and the likes of NML and AME (just examples)
In fairness to SND the market for base metal companies has been tanking since SND started and if the market has been strong then many of the investments would have worked out
SND would now be very wise in allocating $100m to royalty investments but of course the till is empty. They may have to hold the course for 5 to 10 years until the share price is $2 or better and then do a large public offering (50m shares at $2)
Mat