Sandstorm Metals & Energy Ltd STTYF

RE: DONNER Metals UPDATE

[elmothefearless]

Donner's up front CAPEX totals ~$40 million.  Total spent to date is ~$29 million and they have ~$11 million in the bank as of May 31, 2012 (cash and tax credits receivable).  This means that they have just enouhg capital to cover their cost of CAPEX.  Throw in the cost of drilling other areas of the JV lands and management overhead, they will probably be a few million in debt by Q1 2013 when Bracemac comes on stream.

 

What are the odds of them repurchasing 50% of the stream?  Not too likely I would guess.  It absolutely does not make sense from a share issuance perspective... $14 million would lead to significant dilution.  Their only other option is debt.  Could they come up with a convertible debenture at a high interest rate to repurchase the stream?  We'll have to wait and see.