Sandstorm Gold Ltd. ("Sandstorm Gold" or the "Company") (TSX
VENTURE:SSL)(NYSE MKT:SAND)(NYSE Amex:SAND) is pleased to announce
that it has entered into a precious metals purchase agreement with
Colossus Minerals Inc. ("Colossus") (TSX:CSI) to purchase an amount
of gold and platinum from the Serra Pelada Mine ("Serra Pelada")
located in Para, Brazil.
Sandstorm Gold has agreed to purchase an amount equal to 1.5% of
the gold and 35% of the platinum produced from Serra Pelada (the
"Precious Metals Purchase Agreement"). Pursuant to this agreement,
Sandstorm Gold will pay an upfront cash deposit to Colossus of
US$60 million and ongoing per ounce payments equal to the lesser of
US$400 per ounce of gold and the prevailing market price of gold,
and the lesser of US$200 per ounce of platinum and the prevailing
market price of platinum.
"Serra Pelada is a fantastic project run by a first-class
management team," said Sandstorm Gold President & CEO Nolan
Watson. "We are confident that the high-grade nature of the Serra
Pelada deposit will contribute to it being a low cost producer for
years to come."
As part of the transaction, Sandstorm Gold has also agreed to
purchase 35% of the palladium produced from Serra Pelada (the
"Palladium Purchase Agreement") in exchange for paying a US$15
million deposit (bringing the total deposit payment made by
Sandstorm Gold to US$75 million) plus ongoing payments of US$100
per ounce of palladium. In addition, Sandstorm Gold has entered
into a back-to-back agreement with Sandstorm Metals & Energy
Ltd. ("Sandstorm Metals") whereby Sandstorm Metals has purchased
the Palladium Purchase Agreement from Sandstorm Gold in exchange
for issuing a promissory note. The promissory note states that the
US$15 million will be repaid to Sandstorm Gold in cash or shares,
within one year's time. For more information, see the Sandstorm
Metals press release at
http://www.sandstormmetalsandenergy.com.
Colossus will have the option, until April 1, 2015, to purchase
in whole or in part, up to 50% of the obligation to purchase metals
under the Precious Metals Purchase Agreement and the Palladium
Purchase Agreement by making a US$48.75 million payment, whereupon
the percentage of gold and platinum to be purchased by Sandstorm
Gold shall be decreased to 0.75% and 17.5% respectively and the
percentage of palladium to be purchased by Sandstorm Metals shall
decrease to 17.5%.
About Serra Pelada
Serra Pelada is a high-grade gold-platinum-palladium deposit
located in the mineral and mining prolific Carajas region in Para
State, northern Brazil. The existing infrastructure and
accessibility to the site are excellent due to the close proximity
of a number of major mines. During the 1980's, Serra Pelada hosted
the largest ever gold rush in Latin America with up to 80,000
artisanal miners producing 2 million ounces of gold, plus platinum
and palladium, from a hand dug open pit. Colossus Minerals has been
involved in the development of Serra Pelada since 2007 and is
targeting initial production by the end of 2013. Serra Pelada is
fully permitted and construction is underway. It is expected to be
a high grade, low-cost polymetallic producer.
For more information on Serra Pelada, visit the Colossus
Mineral's website at http://www.colossusminerals.com/.
ABOUT SANDSTORM GOLD
Sandstorm Gold Ltd. is a gold streaming company. Sandstorm Gold
provides upfront financing for gold mining companies that are
looking for capital. In return, Sandstorm Gold receives a gold
streaming agreement. This agreement gives Sandstorm Gold the right
to purchase a percentage of the life of mine gold produced, at a
fixed price. Sandstorm Gold is a non-operating gold mining company
with a portfolio of eight gold streams (five of which are producing
gold), one platinum stream and three NSR gold royalties. Sandstorm
Gold plans to grow and diversify its low cost production profile
through the acquisition of additional gold streams.
Sandstorm Gold is focused on low cost operations with excellent
exploration potential and strong management teams. Sandstorm Gold
has completed gold purchase or royalty agreements with Brigus Gold
Corp., Colossus Minerals Inc., Donner Metals Ltd., Luna Gold Corp.,
Magellan Minerals Ltd., Metanor Resources Inc., Santa Fe Gold
Corp., SilverCrest Mines Inc., Rambler Metals and Mining plc and
Solitario Exploration & Royalty Corp.
For more information visit: www.sandstormgold.com.
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 Gold Ltd. ("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, 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, 2011 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.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Sandstorm Gold Ltd. Nolan Watson President & Chief
Executive Officer (604) 689-0234 Sandstorm Gold Ltd. Denver Harris
Investor Relations Contact (604) 628-1178 www.sandstormgold.com
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