Sandstorm Metals & Energy Ltd STTYF

Donner Metals deal

[greenandgold]

The copper deal looks worse at first glance. Sandstorm pays $20 million for 17.5% of Bracemac mine's measured and indicated 84 million pounds of copper. Copper is relatively expensive at $4.35 per pound, not at historical lows like natural gas.

84 million pounds x 17.5% x ($4.35 per pound minus unit payment of
.80 per pound = $3.55 per pound) = $52 million in revenue for Sandstorm.

Positive considerations: there are additional inferred resources at the mine. Could this add another 50 million pounds of copper? That would mean an additional $28 million in revenue for Sandstorm. The quality of the mine is also rock-solid. The Matagami camp, which Bracemac is a part of, has been around for 50 years and the infrastructure, operator, permitting and facilities are all in place. Xstrata, the operator, is very large, experienced and successful. The danger of this deposit not becoming an economic mine is minimal.

Sandstorm pays more upfront for the safe returns from this project.

[greenandgold]

Sorry, I left out the bonus shares of Donner Metals that Sandstorm receives. 6.4 million shares at current price of 30 cents a shares, plus $1.4 million worth of Donner shares to be delivered next year. If this mine goes into production, as Sandstorm is betting, these 10 million Donner shares should go through the roof. That makes the copper deal look better.How much cash will Sandstorm have after

[bopa]

1. 6.4 million shares wil cost 0.35 eachfrom donner PR releaseUnder the terms of the Metal Purchase Agreement, Donner will receive an upfront purchase deposit from Sandstorm in the amount of US$17.75 million on a date expected to be on or before July 18, 2011 and a second purchase deposit of US$5 million, subject to certain Donner funding conditions, on or before June 30, 2012. In addition