Sandstorm Gold Ltd. ("Sandstorm" or the "Company") (TSX:SSL)(NYSE
Amex:SAND)(NYSE MKT:SAND) is pleased to announce that it has
entered into a gold stream agreement with Mutiny Gold Ltd.
("Mutiny") (ASX:MYG) to acquire an amount of gold from the
Deflector Project ("Deflector") located in Western Australia.
Sandstorm has agreed to purchase an amount equal to 15% of the
gold produced from Deflector (the "Gold Stream"). Pursuant to this
agreement, Sandstorm will make an initial upfront cash payment to
Mutiny of US$9 million (the "Initial Deposit") and will make a
future cash remittance of US$29 million (the "Second Deposit") once
Mutiny has received final mine permits for Deflector as well as
completed certain funding conditions. In addition, Sandstorm will
make ongoing per ounce payments equal to the lesser of US$500 per
ounce of gold and the prevailing market price of gold (the "Per
Ounce Payments"). If Deflector produces more than 85,000 ounces of
gold in a given year, Sandstorm will make a one-time US$4 million
payment to Mutiny (the "Conditional Deposit"). Aside from the
Initial Deposit, the Second Deposit, the Per Ounce Payments and the
Conditional Deposit, Sandstorm is not required to contribute to any
capital, exploration or operating expenditures in respect to
Deflector.
"The transaction with Mutiny Gold marks Sandstorm's first foray
into the Australian market which has had very limited exposure to
stream financing," said President & CEO Nolan Watson. "The
Deflector Project is expected to be a high-grade, low-cost producer
and we believe there is significant exploration upside on the
property. Australia has a number of excellent assets and we hope
this deal is the first of many in the country."
Mutiny will have the option, for a period of 36 months from the
date of the Second Deposit, to repurchase in whole or in part, up
to 50% of the Gold Stream by making a payment equal to the greater
of US$24.7 million or the value of 14,472 gold ounces, whereupon
the percentage of gold that Sandstorm is entitled to purchase shall
be decreased from 15% to 7.5%.
If Mutiny subsequently discovers and develops an additional mine
within a defined area outside of the area subject to the Gold
Stream, Sandstorm has the right, but not the obligation, to
purchase 15% of the gold produced at a per ounce price of US$500 in
exchange for Sandstorm paying 15% of the capital expenditures
incurred for the development.
About Deflector
Deflector is a high-grade gold and copper deposit located in the
South Murchison, Western Australia. A definitive feasibility study
completed in October 2012, projects 55,000 ounces of annual gold
production at Deflector over a 7.5 year mine life. Production will
begin from an open pit operation and expand underground, with ore
from both the open pit and underground being processed through the
existing Gullewa processing facility. The facility is being
upgraded and will include a floatation circuit as well as a
revamped mill and gravity circuit, providing plant capacity of
480,000 tonnes per year for oxide and transition ore during the
first two years of production and 380,000 tonnes per year for
primary ore thereafter.
Deflector JORC-compliant Resource - November 2012
----------------------------------------------------------------------------
Au Au Cu Cu Ag Ag Au Eq
Classification Tonnes (g/t) (oz) (%) (t) (g/t) (oz) (oz)
----------------------------------------------------------------------------
Measured 1,164,000 6.0 223,000 1.5 17,000 10.9 407,000 310,000
----------------------------------------------------------------------------
Indicated 1,043,000 7.3 246,000 0.6 7,000 4.2 140,000 279,000
----------------------------------------------------------------------------
Measured &
Indicated 2,207,000 6.6 468,000 1.1 24,000 7.7 547,000 589,000
----------------------------------------------------------------------------
Inferred 658,000 5.8 122,000 0.5 3,000 3.9 82,000 140,000
----------------------------------------------------------------------------
Totals 2,865,000 6.4 591,000 0.9 27,000 6.8 629,000 729,000
----------------------------------------------------------------------------
-The gold equivalence calculation represents total metal value
for each metal assuming 100% recovery, summed and expressed in
equivalent gold grade or ounces.
-The AUD metal prices used in the calculation were $1,700/oz Au,
$8,000/t Cu, $27.0/oz Ag.
-Totals may appear incorrect due to appropriate rounding
Deflector JORC-compliant Reserves - November 2012
----------------------------------------------------------------------------
Au Au Cu Cu Ag Ag Au Eq
Classification Tonnes (g/t) (oz) (%) (t) (g/t) (oz) (oz)
----------------------------------------------------------------------------
Proven 1,253,000 4.7 187,000 1.2 15,000 8.4 339,000 213,000
----------------------------------------------------------------------------
Probable 1,091,000 5.1 179,000 0.5 4,000 2.9 102,000 202,000
----------------------------------------------------------------------------
Totals 2,344,000 4.9 367,000 0.8 19,000 5.9 441,000 415,000
----------------------------------------------------------------------------
-The gold equivalence calculation represents total metal value
for each metal assuming 100% recovery, summed and expressed in
equivalent gold grade or ounces.
-The AUD metal prices used in the calculation were $1,700/oz Au,
$8,000/t Cu, $27.0/oz Ag.
-Totals may appear incorrect due to appropriate rounding.
Shane McLeay, Principal Consultant to Mutiny, FAusIMM, B. Eng,
Mining of Entech Pty Ltd., is the Qualified Person under NI 43-101
responsible for reviewing and approving the technical information
contained in this news release.
For more information on Deflector, visit the Mutiny Gold website
at http://www.mutinygold.com.au.
ABOUT SANDSTORM GOLD
Sandstorm Gold Ltd. is a gold streaming company. Sandstorm
provides upfront financing for gold mining companies that are
looking for capital. In return, Sandstorm receives a gold streaming
agreement. This agreement gives Sandstorm the right to purchase a
percentage of the life of mine gold produced, at a fixed price.
Sandstorm is a non-operating gold mining company with a portfolio
of nine gold streams, five of which are producing gold, and three
NSR royalties. Sandstorm plans to grow and diversify its low cost
production profile through the acquisition of additional gold
streams.
Sandstorm is focused on low cost operations with excellent
exploration potential and strong management teams. Sandstorm 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., Mutiny Gold Ltd.,
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 Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX 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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