RE: SND's chart is looking bad! I've read that Sandstorm doesn't expect production from the new stream until 2022. From a numbers perspective, I'm not unhappy with this stream, as usual. Here are some numbers to consider:
- a small portion of HNE is still expected to be mined. NPV per ETG website is $130 million. Based on my calc.'s about 75% of the value of that $130 million is copper. So $130 million x 2.5% = ~$3 million that SND should realize in the next 1-2 years from the stream. This brings our net investment to ~$2 million.
- assuming the stream pays out ~$4 million a year 10 years from now for >40 years, the PV of this stream is ~$40 million based on a 10% discount factor. Yeap, $40 million.
- if we discount that $40 million back to today (10 years before the cash flow begins), the NPV is $15 million.
- if we reduce the NPV by the $2 million we won't earn back in the next 2 years, the NPV is $13 million. So not bad.
Another way to look at it, of course, is that we are paying $2 million net, for a $4 million / year stream for > 40 years.
The numbers are fantastic, frankly. Of course, this is where potential geographical and political risks come in to play... we'd never get a deal like this done in Canada. But considering it accounted for 3.6% of our market cap., it's definitely not going to make or break us.
All in all, a deal that makes sense.
Makes you wonder, though, why Nolan just didn't pay in cash. We have the money. Leads one to believe we have a new deal on the horizon that they are saving for.