Sandstorm Metals & Energy Ltd STTYF

Should I stay or should I go?

[bargainhunts]

Greetings. Long time lurker, first time posting. 

What a debacle with Colossus. I have been pondering this weekend what to do with my very large SND position (I had almost a third of my portfolio in it - now underwater almost 70%).

The way I see it, here are the pros and the cons:

PROS:
- We should have 10 million cash within 6 months, as per the recent conference call
- The Donner NSR cash flows 4 million a year conservatively. With a little upside in the stated mine life of 7 years (10-20 is more realistic I think) and a recovery at some point in commodity prices, this NSR alone is probably worth close to the current market cap of 40 million. 
- Possible recoveries from Thunderbird, Colossus, etc
- Colossus is not dead yet - they may still get financing (Colossus shareholders are toast, but that's not our problem)
- All of the above means we have more than enough to pay the bills and hunker down for a couple of years if needed until the market turns. 
- Streaming is a great business model. Mangement is smart (although I question this recently) and has plenty of skin in the game (Nolan recently bought more shares).

CONS: 
- ALL our major streams have now blown up spectacularly. Even if the commodity market were to suddenly turn around in 2014, SND is not going to have enough cash to do new deals (Canadian Zinc stream etc) and take advantage of it (this is REALLY unfortunate as there will be potential to do some spectacular deals, I am sure).
- Raising more capital at this share price would be extremely dilutive. 
- Bad decisions by management. What on earth were they doing lending so much to Colossus before we even had an N 43-101 to derisk the project? Sure, this is a once in several decades perfect storm that nobody foresaw, but risk management seems to have gone out the window.
- Still no signs at all of a turnaround in the financing environment, and hard to see that happening any time soon with the Fed likely to taper in January, etc.

Bottom line: I am going to hold, but I am certainly not buying more at this price. (different story if we fell another 20-30%). I still think this is going to be a good investment on a 10 year horizon, but I think it's going to take a few years for the company to dig itself out of a very deep hole.