VANCOUVER,
Aug. 14, 2013 /PRNewswire/ -
Sandstorm Gold Ltd. ("Sandstorm" or the "Company") (NYSE MKT:SAND,
TSX:SSL) and Premier Royalty Inc. ("Premier Royalty") (TSX:NSR) are
pleased to announce that they have entered into an arrangement
agreement (the "Arrangement Agreement") pursuant to which Sandstorm
will acquire 100% of the outstanding common shares in the capital
of Premier Royalty (the "Premier Royalty Shares"), other than the
common shares of Premier Royalty currently owned by Sandstorm, by
way of a plan of arrangement under section 182 of the Business
Corporations Act (Ontario) (the
"Arrangement").
Summary of the Arrangement
Premier Royalty shareholders will receive common
shares of Sandstorm (the "Sandstorm Shares") on the basis of 0.145
of a Sandstorm Share for each Premier Royalty Share held. The
Arrangement values the Premier Royalty Shares at approximately
C$0.89 per Premier Royalty Share,
which represents a premium of 16% to the 20-day volume weighted
average trading price of the Premier Royalty Shares on the Toronto
Stock Exchange (the "TSX") of approximately C$0.77. Based on Sandstorm's closing share
price on August 13, 2013, the total
value of this transaction would be approximately C$28.3 million.
In accordance with the terms of the outstanding
warrants to acquire Premier Royalty Shares (each, a "Premier
Royalty Warrant"), each holder of a Premier Royalty Warrant
outstanding immediately prior to the effective time of the
Arrangement will receive on subsequent exercise of such holder's
Premier Royalty Warrant, in accordance with its terms, for the same
aggregate consideration payable for such warrant, 0.145 of a
Sandstorm Share.
In addition, in accordance with the terms of the
outstanding options to acquire Premier Royalty Shares (each, a
"Premier Royalty Option"), each holder of a Premier Royalty Option
outstanding immediately prior to the effective time of the
Arrangement will receive on subsequent exercise of such holder's
Premier Royalty Option, in accordance with its terms, for the same
aggregate consideration payable for such option, 0.145 of a
Sandstorm Share.
The Arrangement is subject to the approval of at
least two-thirds of the votes cast by Premier Royalty shareholders
at a special meeting of Premier Royalty shareholders, which is
expected to be held in September
2013. The Arrangement is a related party transaction
for purposes of Multilateral Instrument 61-101 - Protection of
Minority Security Holders in Special Transactions ("MI
61-101"). Prior to executing the Arrangement Agreement, the
Board of Directors of Premier Royalty obtained a formal valuation
from Paradigm Capital Inc. as required by MI 61-101.
The valuation was prepared under the supervision of a special
committee of the Board of Directors of Premier Royalty consisting
of independent directors. The valuation will be included in the
management information circular being mailed to shareholders of
Premier Royalty. The approval of the disinterested
shareholders of Premier Royalty will be required in order for the
Arrangement to proceed, however, all shareholders of Premier
Royalty will be treated on the same basis and no additional
consideration or benefit is available to any shareholder of Premier
Royalty.
Completion of the Arrangement is also subject to
the approval of the Ontario Superior Court of Justice, the TSX, the
receipt of all other necessary regulatory and third party
approvals, and other customary conditions. In the event that the
Arrangement is not completed under certain circumstances, Premier
Royalty has agreed to pay Sandstorm a termination fee equal to
C$2 million. In addition, the
Arrangement Agreement includes standard non-solicitation and
superior proposal provisions and Premier Royalty has provided
Sandstorm with certain other customary rights, including a right to
match competing offers. Full details of the transaction will be
included in the management information circular of Premier Royalty
to be mailed to Premier Royalty shareholders in due course.
A copy of the Arrangement Agreement will be
filed under each of Sandstorm's and Premier Royalty's profiles on
SEDAR at www.sedar.com.
Voting Support and Board Approval
Prior to entering into the Arrangement
Agreement, Sandstorm and Premier Royalty entered into support and
voting agreements with certain shareholders of Premier Royalty
(together, the "Locked-Up Shareholders"), collectively holding
approximately 17.4% of the issued and outstanding shares of Premier
Royalty, whereby the Locked-Up Shareholders have agreed to vote
their Premier Royalty Shares in favour of the Arrangement at the
special meeting of Premier Royalty shareholders. As at the
date hereof, Sandstorm owns an aggregate of 46,678,221 Premier
Royalty Shares, representing approximately 59.5% of the outstanding
Premier Royalty Shares (51.6% on a fully-diluted basis). In
addition, Sandstorm currently owns Premier Royalty Warrants to
acquire an additional 6,965,676 Premier Royalty Shares.
The Board of Directors of Premier Royalty, other
than those who have declared an interest in the Arrangement and
abstained from voting, have unanimously approved the transaction
and will unanimously recommend that Premier Royalty shareholders
vote in favour of the Arrangement. Each director and senior
officer of Premier Royalty has indicated that they intend to vote
in favour of the Arrangement.
The Sandstorm Board of Directors has unanimously
approved the transaction and Sandstorm does not require, and the
transaction is not subject to, approval by the shareholders of
Sandstorm. The issuance of the Sandstorm Shares, including those
issuable on exercise of the Premier Royalty Warrants and the
Premier Royalty Options on a post-closing basis, is subject to
approval by the TSX.
Sandstorm's legal counsel is Cassels Brock & Blackwell LLP, Premier
Royalty's legal counsel is Bennett Jones LLP and the special
committee of the Board of Directors of Premier Royalty was advised
by Blake, Cassels & Graydon LLP.
None of the securities to be issued pursuant
to the Arrangement Agreement have been or will be registered under
the United State Securities Act of 1933, as amended (the "U.S.
Securities Act"), or any state securities laws, and any securities
issued pursuant to the Arrangement are anticipated to be issued in
reliance upon available exemptions from such registration
requirements pursuant to Section 3(a)(10) of the U.S. Securities
Act and applicable exemptions under state securities laws.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities.
ABOUT SANDSTORM GOLD
Sandstorm Gold Ltd. is a gold streaming company.
Sandstorm provides upfront financing for gold mining companies that
are looking for capital and in return 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 ten gold streams, six 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., Canadian Zinc Corp., Colossus Minerals Inc.,
Columbus Gold Corp., Donner Metals Ltd., Entrée Gold Inc., 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 "forward-looking information"
within the meaning of applicable Canadian securities legislation
(referred to as forward-looking statements below), 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 completion of the
Arrangement, including the receipt of court and shareholder
approval; the integration of Premier Royalty's business with
Sandstorm's business; 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, the ability to complete the
Arrangement; the receipt of necessary approvals; the inability to
satisfy the conditions to the Arrangement; the inability to achieve
the benefits of the Arrangement; 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, 2012 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 herein, except in accordance with applicable securities
laws.
SOURCE Sandstorm Gold Ltd.