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Sandstorm Gold Ltd T.SSL

Alternate Symbol(s):  SAND

Sandstorm Gold Ltd. is a Canada-based precious metals-focused streaming and royalty company. The Company is focused on acquiring royalties and gold and other metals. The Company holds a portfolio of over 230 royalties, of which 41 of the underlying mines are producing. Its segments include Antamina, Aurizona, Blyvoor, Bonikro, Caserones, Cerro Moro, Chapada, Fruta del Norte, Hounde, Mercedes, Vale Royalties, and others. Antamina open-pit copper mine located in the Andes Mountain range of Peru, approximately 270 kilometers (km) north of Lima. Aurizona mine is in Brazil. The Blyvoor gold mine is located on the Witwatersrand gold belt, South Africa. The Bonikro gold mine is located in Cote d’Ivoire. Caserones open pit mine is in the Atacama region of Chile. Chapada mine is located 270 km northwest of Brasilia in Goias State, Brazil. Mercedes gold-silver mine in Sonora, Mexico. Black Fox mine and Froome mine are located in Ontario, Canada.


TSX:SSL - Post by User

Bullboard Posts
Comment by zentrarianNZon Oct 24, 2013 8:22pm
344 Views
Post# 21847316

RE:Hmmmm ...

RE:Hmmmm ...Thanks, kidl2. This looks to me like much more of a problem for the bigger streamers (SLW and FNV) than for Sandstorm, and even there the effect is probably very limited. The fact remains, as SLW's Smallwood stated, streaming deals are still much more like non-debt financing than debt: no fixed payments, no interest, companies don't start "paying" until they have more than adequate income (which limits the risk of default), etc. If a large mining company (big enough for the S&P to care about it) wants to do a deal, it isn't going to let this ruling stop them.

If anything, it could have a slight beneficial effect on Sandstorm. As NW said in the recent interview (thanks, thasis), the "perfect storm" is still ahead of us, as financing partners are starting to come back to the table, but options are still tight enough that the company can get very favorable terms for its part in the deal. Anything that limits partners' options further is bound to tip the tables more in Sandstorm's favor, provided it doesn't cut them out altogther.

I am expecting a small number of extremely lucrative deals in 2014, with - what's most important - very limited downside risk, because Sandstorm will have a lot of cash and will have had an unusually long time to evaluate streaming candidates. In addition, the company has built up a sizable stable of rights of first refusal and royalties that could easily turn into streams in a rebounding gold market.

BTW with regard to risk: I'm beginning to look at Oyu Tolgoi much differently, and not because the project seems to be moving forward, albeit haltingly. (As I've stated elsewhere, even if OT turns out to be a very profitable deal, as we all hope it will, I will still maintain that it was a poor bet based on the political reality at the time it was negotiated.) The reason is rather that it may well turn out to be a decisive turning point in management's investing strategy. Judging by virtually all of NW's comments on OT in the interim, the company got the message loud and clear from shareholders and that kind of high-risk/high reward deal is going to truly be a one-off. In that case, even if we sunk the whole 45 mil (and that's unlikely with Ann Mason as a backstop) it will be worth it in evaluating risk in future deals.
Bullboard Posts