Sandstorm Metals & Energy Ltd STTYF

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https://www.smallcapcanada.com/articles/?p=245

Can Sandstorm Metals and Energy (TSX: SND) Realize Potential Expressed by President and CEO?

Shares of Sandstorm Metals and Energy (TSX: SND) have climbed to a 52-week high of 0.51 on Monday and trading volume in the company, which focuses “on low cost operations with excellent exploration potential and strong management teams, topped the 1.6 million mark by mid afternoon in today’s session.

The push to a new 52-week high comes more than a month after SND issued their last press release, a release that announced a proposed restructuring of Novadx Ventures Corp. which included new management, an equity offering, a restructuring of the coal stream agreement and a change in company name; essentially a complete overhaul.

In the words of Sandstorm President and CEO Nolan Watson, “We are confident that through the recapitalization and adjustments to the management team, Novadx has the opportunity to achieve long-term success.”

Boosting interest in SND may have been an article published by Bloomberg in which Watson, who co-founded Sandstorm Gold with intent to buy bullion from mining companies by paying in advance for a percentage of output at a discounted fixed price and then selling the gold for spot price, boasted about the potential surrounding SND, particularly how it is designed to capitalize on the opportunities that exist in non-precious metals, oil and gas.

In reference to SND Watson was quoted as saying “I firmly believe it will be the larger of the two entities in the long run just because the space is so much larger.” Considering the success that Sandstorm Gold has had this is a pretty significant endorsement for SND’s plan of operations. That being said, the endorsement is still coming from SND’s president and CEO.

Whether or not SND finds the same kind of success that Sandstorm Gold has established remains to be seen but they are implementing the same philosophy that has produced favorable results for the larger company, that being “to complete commodity purchase agreements with companies that have advanced stage development or operating projects.” These commodity purchase agreement involves Sandstorm making an upfront cash payment to its partners and in exchange, Sandstorm receives the right to purchase a percentage of the commodity produced for the life of the asset, at a fixed price per unit.”

Exceeding or even matching the level of success seen by Sandstorm Gold may sound a bit optimistic considering the stability of gold compared to the non-precious metals, oil and gas markets which often fluctuate and could lead to varying margins that may not always appear that favorable.

Much of SND’s success will be dependent upon the strength of the companies involved in their commodity purchase agreements and just how active SND will be in the activities of those companies. Clearly their efforts with Novadx Ventures Corp. has indicated their approach will be hands-on but Watson surely doesn’t want to divert too much attention away from what has delivered the results thus far, that being gold.

What does attract investors to SND is the simple fact that Watson has tasted success and recognizes the importance of strong management teams overseeing advanced stage developments. The companies that SND are interested in are positioned to deliver production near-term and aren’t as susceptible to incurring exorbitant costs as found with early stage development companies, meaning they can see a quicker payoff on their capital investment.