VANCOUVER, July 3, 2017 /CNW/ - Sandstorm Gold Ltd.
("Sandstorm" or the "Company") (NYSE MKT: SAND, TSX: SSL) is pleased to announce that the Scheme of Arrangement (the "Scheme") to
acquire Mariana Resources Limited ("Mariana") has become effective in accordance with its terms, following the sanction of the
Scheme by the Guernsey Court on June 26, 2017 and the delivery of the sanction court order to the
Guernsey Registry earlier today. Accordingly, the acquisition has been completed and Mariana has become a wholly owned subsidiary
of Sandstorm.
Under the terms of the Scheme, Scheme shareholders on the register at the Scheme Record Time, being 5.00 p.m. (London time) on June 28, 2017 will
receive 0.2573 Sandstorm shares and 28.75 pence in cash for each Scheme share held, subject to
rounding for fractional entitlements. Sandstorm has made applications to the Toronto Stock Exchange and NYSE MKT for the new
Sandstorm shares to be admitted to trading and such admission is expected to occur within 14 days. The total consideration paid
was approximately US$175 million including 32,832,813 new Sandstorm shares issued under the Scheme
(at a price of US$3.87 as of the close of trading on June 30, 2017)
and cash consideration of approximately US$48 million.
— Transaction Highlights
- 100% increase in production for 19% dilution;
-
- Hot Maden anchor asset is expected to increase the Company's attributable gold equivalent ounces to more than 135,000
by 2022, increasing operating cash flow to more than US$100 million (based on a US$1,250 per ounce gold price).
- Hot Maden is a high-grade, low-cost asset with significant exploration upside;
-
- Preliminary Economic Assessment (effective date of March 1, 2017) projects after-tax NPV
and IRR of US$1.37 billion and 153% respectively (100% basis) with estimated
all-in-sustaining costs of less than $400 per gold equivalent ounce.
- Indicated Mineral Resource of 3.43 million gold equivalent ounces (7.1 million tonnes at 12.2 grams per tonne gold and
2.3% copper) is based on approximately 15,000 metres of drilling from 52 drill holes using a 0.2 gram per tonne gold
equivalent cut-off. More than 60 drill holes have been completed subsequent to the release of the Indicated Resource
estimate, with many assay results returning significant mineralization.
- Total land package is 74 km2 in size with the current focus being a 7 kilometre alternation zone. The
majority of the exploration drilling has been over 1 kilometre of the alternation zone and several exploration targets have
been identified along strike and parallel to the identified orebody.
- Majority operator Lidya Madencilik Sanayi ve Ticaret A.S. ("Lidya") is a strong local partner with experience exploring,
developing, permitting and operating projects in Turkey.
-
- Lidya is part of a large Turkish conglomerate called Çalık Holding and is currently partnered with Alacer Gold Corp. on
several projects in Turkey including the producing Çöpler mine and the development-stage
Gediktepe and Kartaltepe projects.
- Acquisition of Mariana includes exploration properties in Côte d'Ivoire, Turkey, and
Argentina. Sandstorm has begun the process to spin-out the exploration properties into a
separate public company and will retain net smelter return royalties as well as equity in the spin-out. The spin-out process is
expected to be completed within 6 to 12 months and has the potential to add incremental value to the acquisition.
For additional information and management commentary on Hot Maden and the Mariana acquisition, visit http://www.sandstormgold.com/hot-maden-acquisition .
Sandstorm's President & CEO, Nolan Watson remarked, "Today is an exciting day for Sandstorm
shareholders as this deal is truly transformative for the Company. Hot Maden is one of the highest grade undeveloped projects in
the world and will add high-margin ounces to Sandstorm's production profile. Opportunities to acquire anchor assets like Hot
Maden are rare and with the exploration potential that we see on the property, we anticipate that our 30% interest will continue
to grow in value over time."
Watson added, "Now that the transaction is closed and we are no longer under the marketing restrictions imposed by the U.K.
Takeover Code, we are glad to be able to speak more candidly about Hot Maden and the impact that it will have on Sandstorm's
future growth. Encouragingly, a number of high-profile institutional investors have been building positions in the Company
including multi-billion dollar asset managers like Blackrock, Fidelity, MAN GLG, and Setanta Asset Management."
"We are fortunate to be in a strong financial position with no debt, cash on the balance sheet and an undrawn $110 million credit facility available to us. In the short-term we intend to buy-back our shares but we are
also working on a number of acquisition opportunities in order to continue to grow the Company. I encourage all of you to join
our upcoming webcast as we will be providing a thorough review of the acquisition rationale and Sandstorm's plans to continue
building shareholder value."
— Webcast and Conference Call Details
A conference call will be held on Thursday, July 6, 2017 starting at 8:00am PDT to further discuss the acquisition. To participate in the conference call and question and answer
period, use the following dial-in numbers and conference ID, or join the webcast using the link below:
Local/International: (+1) 416 764 8688
North American Toll-Free: (+1) 888 390 0546
Conference ID: 90936462
Webcast URL: http://ow.ly/1bm530dc7ts
QUALIFIED PERSON
Keith Laskowski (MSc), Sandstorm's Vice President, Technical Services is a Qualified
Professional (#01221QP) of the Mining and Metallurgical Society of America and a Qualified Person as defined by Canadian National
Instrument 43-101. Mr. Laskowski has not independently verified the resource estimates contained in this disclosure. He has
reviewed and approved the technical information in this press release.
To review the complete Hot Maden Preliminary Economic Assessment and other technical information visit www.sedar.com and see the Mariana Resources profile.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of such securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
BMO Capital Markets has advised Sandstorm during this period.
ABOUT SANDSTORM GOLD
Sandstorm Gold Ltd. is a gold royalty company. Sandstorm provides upfront financing to gold mining companies that are looking
for capital and in return, receives the right to a percentage of the gold produced from a mine, for the life of the mine.
Sandstorm has acquired a portfolio of 160 streams and royalties, of which 20 of the underlying mines are producing. Sandstorm
plans to grow and diversify its low cost production profile through the acquisition of additional gold royalties.
For more information visit: www.sandstormgold.com
CAUTIONARY STATEMENTS TO U.S. SECURITYHOLDERS
The financial information included or incorporated by reference in this press release or the documents referenced herein has
been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards
Board, which differs from US generally accepted accounting principles ("US GAAP") in certain material respects, and thus are not
directly comparable to financial statements prepared in accordance with US GAAP.
Information contained or referenced in this press release or in the documents referenced herein concerning the properties,
technical information and operations of Sandstorm and of Mariana has been prepared in accordance with requirements and standards
under securities laws, which differ from the requirements of US securities laws. The terms "mineral resource", "measured mineral
resource", "indicated mineral resource" and "inferred mineral resource" used in this or in the documents incorporated by
reference herein are mining terms as defined in accordance with NI 43-101 under guidelines set out in the Definition Standards
for Mineral Resources and Mineral Reserves adopted by the Canadian Institute of Mining, Metallurgy and Petroleum Council on
11 December 2005. While the terms "mineral resource", "measured mineral resource", "indicated
mineral resource" and "inferred mineral resource" are recognized and required by securities laws other than the requirements of
US securities laws, they are not recognized by the SEC. Disclosure of contained ounces are or may be permitted disclosure under
regulations applicable to Mariana and Sandstorm; however, the SEC normally only permits issuers to report resources as in place
tonnage and grade without reference to unit of production measures. As such, certain information contained in this document or in
the documents incorporated by reference herein concerning descriptions of mineralization and mineral resources under these
standards may not be comparable to similar information made public by US companies subject to reporting and disclosure
requirements of the SEC.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
This press release contains "forward-looking statements", within the meaning of the U.S. Securities Act of 1933, the U.S.
Securities Exchange Act of 1934, the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities
legislation, concerning the business, operations and financial performance and condition of Sandstorm. Forward-looking statements
include, but are not limited to, statements with respect to the future price of gold, the estimation of mineral reserves and
resources, realization of mineral reserve estimates, and the timing and amount of estimated future production. Forward-looking
statements can generally be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend",
"estimate", "anticipate", "believe", "continue", "plans", or similar terminology.
Forward-looking statements are made based upon certain assumptions and other important factors that, if untrue, could cause
the actual results, performances or achievements of Sandstorm to be materially different from future results, performances or
achievements expressed or implied by such statements. Such statements and information are based on numerous assumptions regarding
present and future business strategies and the environment in which Sandstorm will operate in the future, including the price of
gold and anticipated costs. Certain important factors that could cause actual results, performances or achievements to differ
materially from those in the forward-looking statements include, amongst others, gold price volatility, discrepancies between
actual and estimated production, mineral reserves and resources and metallurgical recoveries, mining operational and development
risks relating to the parties which produce the gold Sandstorm will purchase, regulatory restrictions, activities by governmental
authorities (including changes in taxation), currency fluctuations, the global economic climate, dilution, share price volatility
and competition.
Forward-looking statements are subject to known and unknown risks, uncertainties and other important factors that may cause
the actual results, level of activity, performance or achievements of Sandstorm to be materially different from those expressed
or implied by such forward-looking statements, including but not limited to: the impact of general business and economic
conditions, the absence of control over mining operations from which Sandstorm will purchase gold and risks related to those
mining operations, including risks related to international operations, government and environmental regulation, actual results
of current exploration activities, conclusions of economic evaluations and changes in project parameters as plans continue to be
refined, risks in the marketability of minerals, fluctuations in the price of gold, fluctuation in foreign exchange rates and
interest rates, stock market volatility, as well as those factors discussed in the section entitled "Risks to Sandstorm" in
Sandstorm's annual report for the financial year ended December 31, 2016 available at www.sedar.com. Although Sandstorm has attempted to identify important
factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be
other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements
will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking statements. Sandstorm does not undertake to update any
forward looking statements that are contained or incorporated by reference, except in accordance with applicable securities
laws.
SOURCE Sandstorm Gold Ltd.
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