Email from DH
I wrote DH a rather strong email asking what was going on. He emailed:
"I understand where you’re coming from with your comments."
Nolan has always said the majority of the streams would be in politically safe regions, "but if the right deal came along, that we would be willing to take on political risk as a small part of our overall portfolio. The Entrée deal was an opportunity to get exposure to a world class asset, operated by one of the largest mining companies in the world, that will generate significant returns and free cash flow for decades. We were able to complete a deal at a compelling valuation but also build in provisions in the contract to protect us from the expropriation risk. If the Mongolian government was to expropriate a portion of Entrée’s 20% joint venture, our stream would be adjusted on a pro-rata basis and we would be refunded the pro-rata portion of our upfront payment.
Entrée has not received any official notice from the Mongolian government regarding the mining licenses, but their 20% carried joint venture interest and Sandstorm’s stream with Entrée is not necessarily at risk if this speculation is confirmed. As we get more details in the coming days, we will communicate the information to our shareholders.
...our management team is committed to building fundamental value through accretive streams that will generate strong cash flow for our shareholders. Not every deal is going to work out, but our track record is strong and I firmly believe in our management team’s ability to add value in the future."