VANCOUVER, Aug. 5, 2014 /CNW/ - Sandstorm Gold Ltd.
("Sandstorm" or the "Company") (NYSE MKT: SAND, TSX: SSL) has
agreed to enter into a strategic investment agreement (the
"Investment Agreement") with Luna Gold Corp. ("Luna"), as part of
which, Sandstorm will participate in a Luna non-brokered private
placement (the "Placement").
Strategic Investment Agreement
The Placement involves
Luna issuing up to 30 million common shares (the "Placement
Shares") at a price of $1.02 per
share, for gross proceeds of up to $30,600,000. Pursuant to the Investment
Agreement, Sandstorm will purchase a minimum of 19.5 million of the
Placement Shares, which when combined with the 8.5 million shares
of Luna already owned by the Company, will result in Sandstorm
becoming the largest shareholder of Luna, owning approximately
19.8% of Luna's issued and outstanding shares. Sandstorm will have
the right to maintain its ownership percentage of Luna through
future private placements or public offerings so long as the
Company owns greater than 15% of Luna's issued and outstanding
shares.
The Placement is necessary due to a combination of lower than
estimated cash flow and cost overruns at Aurizona, also requiring
Luna to delay the completion of the Phase One Expansion at the
mine. Luna has revised its 2014 production guidance to a range of
75,000 to 80,000 ounces of gold.
The Investment Agreement will allow Sandstorm to appoint one
member to Luna's Board of Directors. David
Awram, Senior Executive Vice President of Sandstorm, will
assume the Luna directorship role. The Chairman of Luna's Board of
Directors, Luis Baertl, has resigned
and will be succeeded by the current Lead Independent Director,
Steven Krause. Mr. Baertl will
remain a Director of Luna.
Gold Stream Discussions
Sandstorm and Luna have
commenced discussions related to the potential modification of the
Aurizona gold stream. The focus of the discussions is to explore
opportunities that will increase value for both Sandstorm and Luna
shareholders with the goal of improving Luna's access to capital,
accelerating production and cash flow to both Sandstorm and Luna
and leveraging the highly prospective brownfields and greenfields
exploration targets. Sandstorm currently holds a gold stream
agreement to purchase 17% of the life of mine gold produced from
the open-pit operations at Aurizona at a per ounce price of
US$404 (increasing 1% annually).
Sandstorm's President and CEO Nolan
Watson commented, "The interests of Sandstorm and Luna are
very much aligned and we are committed to working together in order
to unlock as much value as possible for our respective
shareholders."
Prior to completion of the Placement, Sandstorm owned 8.5
million shares of Luna (approximately 7%) and upon completion of
the Placement, Sandstorm will have ownership of 28 million shares
of Luna (approximately 19.8%). The Placement Shares will be
acquired for investment purposes. Sandstorm does not have any
present intention to acquire ownership of, or control over,
additional securities of Luna. It is the intention of Sandstorm to
evaluate its investment in Luna on a continuing basis and such
holdings may be increased or decreased in the future. The common
shares of Luna are listed on the TSX, and the Placement Shares will
be issued from treasury. The Placement and the issuance of the
Placement Shares are conditional upon receipt of approval of the
Toronto Stock Exchange. Sandstorm relied on Section 2.10 of
National Instrument 45-106 - Prospectus and Registration
Exemptions in the acquisition of the Placement Shares. The
address of Sandstorm for the purposes of National Instrument 62-103
– Take-over Bids and Special Transactions is 400 Burrard
Street, Suite 1400, Vancouver, British
Columbia V6C 3A6. A copy of Sandstorm's Early Warning
Report will be available on Luna's profile on SEDAR at
www.sedar.com or by contacting Sandstorm at the numbers shown
below.
ABOUT SANDSTORM GOLD
Sandstorm Gold Ltd. is a gold streaming company. Sandstorm
provides upfront financing to gold mining companies that are
looking for capital and in return, receives a gold streaming
agreement. A gold stream gives Sandstorm the right to purchase a
percentage of the gold produced from a mine, for the life of the
mine, at a fixed price per ounce. Sandstorm has acquired a
portfolio of nine streams and twenty-eight royalties, fourteen of
which are producing gold. Sandstorm plans to grow and diversify its
low cost production profile through the acquisition of additional
gold streams.
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, 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,
2013 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.