Sandstorm Metals & Energy Ltd STTYF

NovaDx, Sandstorm close Tennessee properties purch

[Thundersole]

NovaDx, Sandstorm close Tennessee properties purchase

https://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aSND-2029356&symbol=SND&region=C

[funkshow33]

Is this not just throwing good money after bad?  Coal will continue to struggle IMO

[bob4977]

Investing in coal seems a bit of a risk but sometimes you have to trust management. Nolan Watson thinks they can make money in coal over the long term and most of us here have high regard for his judgement. Bob

[thasis]

Not sure it really matters if the underlying commodity struggles. After all we are only paying $65 per ton and possibly less under the new deal? To address your concern simply check what the price of coal is today and you should have your answer. Good money after bad: Funding is needed to complete an active producing stream. We simply continued to show financial support for this asset and

[elmothefearless]

Actually under the new deal we have foregone our streaming deal with NovaDX for about a 55% equity stake in the company (assuming a deal gets done to recapitalize it), a $10 million debenture, and a $4.50 royalty / tonne on coal produced (falling to $2.00), for the previous investment of ~$30 million plus an additional $7 million investment (it says $5 million but we also advanced a $2 million

[carinthian]

Hi Elmo! Anny suggestions what might happen to the price of met coal or at what price production (of course only if the deal to recapitalize gets done) would be economic for that company to be able to at least pay the debenture? I personally think that they would not accept such a deal if they are not confident that the company can generate profit with prices maybe even lower than the current

[elmothefearless]

Hey carinthian you posed some very good questions that I don't have the answers to so I sat down for about 45 minutes and took a read through the technical reports on the NovaDX website.  Here is what I have come up with:   Rosa (the small met. coal mine): Cash costs estimated to be in the $70 range.  Not sure if this includes a transportation charge.  NDX bought this asset

[elmothefearless]

Oops I goofed on the SND share ownership number :)   Our previous investment of $30 million converts as follows:   - $10 million turns into the royalty at $4.50, falling to $2.00 / tonne after we recover $10 million - $10 million into a debenture bearing interest at 8%, convertible at $0.10 / share - $10 million into equity at $0.05   Then we are putting in another $7 million at $0

[elmothefearless]

Article on met coal dated Jan 2 2013:   https://www.northernminer.com/news/rising-indian-steel-production-to-support-coking-coal-prices/1001965202/

[carinthian]

Hi Elmo!   Thanks a lot for the very detailed response.   I agree with you that there can only be a educated guessed range of where their all in costs will be but what I took out of this transaction(s) is that the entity is viable at current and highly probable with 10-20% lower prices too. As I am from Austria I am not into the North American Coal Marketet but as far as I could get

[zentrarianNZ]

Likewise, thanks for the detailed analysis of the NovaDX/Blackpaw situation, elmo. It seems to me there are too many variables and unknowns to nail down much of an estimate on what the company is actually worth. But at a minimum you have made a good case for why Watson & Co. decided to continue to support the company (for a price) rather than merely - as some posters have suggested - "