UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT
OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of November,
2015
Commission File Number: 001-35617
Sandstorm
Gold Ltd.
(Translation of registrant’s name into English)
Suite
1400 - 400 Burrard Street
Vancouver, British Columbia
V6C 3A6 Canada
(Address of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
Indicate
by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
If “Yes” is marked, indicate
below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-
EXHIBIT INDEX
| Exhibit |
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Description of Exhibit |
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| 99.1 |
|
MATERIAL CHANGE REPORT |
| 99.2 |
|
MATERIAL CHANGE REPORT |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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SANDSTORM GOLD
LTD. |
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| Date: November 6, 2015 |
By: |
/s/ Erfan Kazemi |
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Name: Erfan Kazemi |
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Title: Chief Financial Officer |
Exhibit 99.1
MATERIAL CHANGE REPORT
UNDER NATIONAL INSTRUMENT 51-102
| Item 1 |
|
Name and Address of Company |
Sandstorm Gold Ltd. (the “Company” or “Sandstorm”)
Suite 1400 – 400 Burrard Street
Vancouver, BC V6C 3A6
| Item 2 |
|
Date of Material Change |
October 27, 2015.
A news release was disseminated through
Marketwired on October 27, 2015 and filed on SEDAR.
| Item 4 |
|
Summary of Material Change |
On October 27, 2015, the Company announced
that it had entered into an agreement with a syndicate of underwriters pursuant to which they agreed to purchase, on a bought deal
basis, 8,772,000 units (the “Units”) of the Company at a price of US$2.85 per Unit, for aggregate gross proceeds
to Sandstorm of US$25 million (the “Offering”). In addition, Sandstorm granted the underwriters an over-allotment
option (the “Over-Allotment Option”) to purchase up to an additional 1,315,800 Units on the same terms and conditions
as the Offering, exercisable at any time, in whole or in part, until the date that is 30 days following the closing of the Offering.
The Offering closed on November 3, 2015. The Over-Allotment Option was exercised in full, resulting in aggregate gross proceeds
to Sandstorm of US$28.75 million.
| Item 5 |
|
Full Description of Material Change |
On October 27, 2015, the Company announced
that it had entered into an agreement with a syndicate of underwriters co-led by National Bank Financial Inc. and BMO Capital Markets,
pursuant to which they agreed to purchase, on a bought deal basis, 8,772,000 Units at a price of US$2.85 per Unit, for aggregate
gross proceeds to Sandstorm of US$25 million. In addition, Sandstorm granted the underwriters the Over-Allotment Option. Each Unit
consists of one common share of Sandstorm (each, a “Common Share”) and one-half of one common share purchase
warrant (each whole common share purchase warrant, a “Warrant”). Each Warrant entitles the holder to acquire
one common share of Sandstorm at a price of US$4.00 at any time prior to the date which is five years following completion of the
Offering (being November 3, 2020).
The Units issued under the Offering were
offered by way of an amended and restated prospectus supplement and an accompanying base shelf prospectus in all of the provinces
of Canada, other than Quebec, and were offered in the United States pursuant to an amended and restated prospectus supplement and
an accompanying base shelf prospectus filed as part of an effective shelf registration statement filed with the Securities and
Exchange Commission under the Canada/U.S. multi-jurisdictional disclosure system.
The Company listed the Common Shares, the
Warrants and the Warrant Shares on the Toronto Stock Exchange. The Company also listed the Common Shares and the Warrant Shares
on the NYSE MKT. There is no market in the United States through which the Warrants may be sold. This may affect the pricing of
the Warrants in the United States secondary market, the transparency and availability of trading prices, the liquidity of such
securities and the extent of issuer regulation.
The Company plans to use the majority of
the net proceeds from the Offering to reduce the balance of its revolving credit facility, which facility was used in funding the
acquisition of production streams from up to five projects from Yamana Gold Inc. (announced October 27, 2015) and for general working
capital purposes.
| Item 6 |
|
Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
| Item 7 |
|
Omitted Information |
Not applicable.
For further information contact Erfan Kazemi
at (604) 689-0234.
DATED as of this 6th day of November, 2015.
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Sandstorm Gold Ltd. |
|
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|
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By: |
“Erfan
Kazemi” |
|
| |
|
Erfan Kazemi |
|
| |
|
Chief Financial Officer |
|
Exhibit 99.2
MATERIAL CHANGE REPORT
UNDER NATIONAL INSTRUMENT 51-102
| Item 1 |
|
Name and Address of Company |
Sandstorm Gold Ltd. (the “Company” or “Sandstorm”)
Suite 1400 – 400 Burrard Street
Vancouver, BC V6C 3A6
| Item 2 |
|
Date of Material Change |
October 27, 2015.
A news release was disseminated through
CNW Group Ltd. on October 27, 2015 and filed on SEDAR.
| Item 4 |
|
Summary of Material Change |
On October 27, 2015, the Company announced
that it has entered into three agreements with Yamana Gold Inc. (“Yamana”) (NYSE: AUY, TSX: YRI) that include
production streams from up to five of Yamana’s projects. For upfront consideration of US$148 million in cash, US$4 million
in cash payable in six months and 15 million warrants of the Company, Sandstorm will receive a silver stream on the Cerro Moro
development project in Argentina (“Cerro Moro”) that includes interim silver deliveries during years 2016 to
2018 from currently operating mines, a copper stream on the operating Chapada mine in Brazil (“Chapada”) and
a potential gold stream on the Agua Rica project in Argentina (“Early Deposit Gold Stream”).
| Item 5 |
|
Full Description of Material Change |
On October 27, 2015, the Company announced
that it has entered into three agreements with Yamana that include production streams from up to five of Yamana’s projects
(the “Transaction”). For upfront consideration of US$148 million in cash, US$4 million in cash payable in six
months and 15 million warrants of the Company, Sandstorm will receive a silver stream on the Cerro Moro project in Argentina that
includes interim silver deliveries during years 2016 to 2018 from currently operating mines, a copper stream on the operating Chapada
mine in Brazil and a potential gold stream on the Agua Rica project in Argentina. The Sandstorm warrants issued to Yamana have
an exercise price of US$3.50, a term of five years and are exercisable upon achievement of specific milestones with respect to
the construction of Cerro Moro.
Multi-Asset
Silver Stream
Silver
Stream Terms
In exchange for US$70 million, Sandstorm
has agreed to purchase an amount of silver based on production from the Cerro Moro mine (the “Silver Stream”)
equal to:
| · | 20%
of the silver produced, up to a maximum of 1.2 million ounces of silver annually, until Yamana has delivered 7.0 million ounces
of silver to Sandstorm; then |
| · | 9.0%
of the silver produced thereafter, for the life of the mine. |
Sandstorm has also agreed to purchase an
amount of silver from Yamana’s Minera Florida mine in Chile and Chapada mine in Brazil, during the years 2016 through 2018
equal to:
| · | 38%
of the silver produced, up to a maximum of 200,000 ounces of silver annually, from Minera Florida; and |
| · | 52%
of the silver produced, up to a maximum of 100,000 ounces of silver annually, from Chapada. |
Sandstorm will make ongoing payments for
each ounce of silver received equal to 30% of the spot price per ounce of silver.
Downside Protection
If by January 1, 2019, the Cerro Moro processing
facility has not averaged 80% of its daily nameplate production capacity over a 30-day period (the “Commencement of Production”),
then Yamana’s producing El Peñon mine in Chile (“El Peñon”) will provide a 24 month backstop
until the Commencement of Production is satisfied. During the 24 month backstop, if applicable, Sandstorm will purchase an amount
of silver equal to 16% of El Peñon’s silver production up to a maximum of 1.2 million ounces per annum, which is expected
to generate US$13 million of cash flow per year to the Company.
If Cerro Moro has not achieved the Commencement
of Production and Sandstorm has not received cumulative pre-tax cash flow equal to US$70 million from the Silver Stream, then the
First Chapada Delivery Threshold and the Second Chapada Delivery Threshold (as defined below) will cease to be in effect and Sandstorm
will continue to purchase 4.2% of Chapada’s payable copper production, up to a maximum of 3.9 million pounds of copper annually,
until such time as Sandstorm has received cumulative pre-tax cash flow equal to US$70 million, or Cerro Moro has achieved the Commencement
of Production.
The Silver Stream on Cerro Moro is based
on production from the project and was structured between Sandstorm’s Canadian parent company and a Yamana entity outside
of Argentina and therefore, the Company does not anticipate being subject to tax risk or currency risk outside of Canada.
About
the Cerro Moro Project
The Cerro Moro project is located approximately
70 kilometres southwest of the coastal port city of Puerto Deseado in the Santa Cruz province of Argentina. Cerro Moro contains
a number of high grade epithermal gold and silver deposits, some of which will be mined via open pit and some via underground mining
methods. In February 2015, Yamana announced that it would proceed with the construction of Cerro Moro. The current plan indicates
average annual production in the first three years of 135,000 ounces of gold and 6.7 million ounces of silver, with the life of
mine annual production averaging approximately 102,000 ounces of gold and 5 million ounces of silver at a throughput of 1,000 tonnes
per day. The concentrator will consist of a standard crushing, grinding and flotation circuit with a counter current decantation
and a Merrill Crowe circuit included.
According to Yamana, the procurement of
long lead items is underway and Cerro Moro remains on track for construction to begin in early 2016, commencing with select bulk
earthworks activities. Project capital costs, as estimated in Q1 2015, are approximately US$265 million which includes US$31 million
in late 2015 for detailed engineering and pre-development.
Chapada
Copper Stream
Copper
Stream Terms
In exchange for US$70 million, Sandstorm
has agreed to purchase an amount of copper based on production from the Chapada mine (the “Copper Stream”) equal
to:
| · | 4.2%
of the copper produced, up to a maximum of 3.9 million pounds of copper annually, until Yamana has delivered 39 million pounds
of copper to Sandstorm (the “First Chapada Delivery Threshold”); then |
| · | 3.0%
of the copper produced until, on a cumulative basis, Yamana has delivered 50 million pounds of copper to Sandstorm (the “Second
Chapada Delivery Threshold”); then |
| · | 1.5%
of the copper produced thereafter, for the life of the mine. |
Sandstorm will make ongoing payments for
each pound of copper received equal to 30% of the spot price per pound of copper.
About
the Chapada Project
Chapada is an open pit gold-copper mine
located 270 kilometres northwest of Brasília in Goiás state, Brazil and has been in production since 2007. The ore
is treated through a flotation plant with capacity of 22 million tonnes per annum. The Chapada operations have a mine life of over
20 years based on the most recent proven and probable mineral reserves and the mine is projected to produce 120,000 ounces of gold,
120 million pounds of copper and 305,000 ounces of silver during the 2015 year.
Yamana has benefitted from significant
discoveries at Chapada in the past and expects to complete 10,000 metres of exploration drilling and 12,000 metres of infill drilling
over the course of 2015. The drill campaign has identified a 1.5 kilometre strike length of mineralization which remains open to
the southwest and to depth. Exploration will continue to test both the strike and down dip extensions of the mineral body. The
infill drilling programs are focused on upgrading mineral resources.
EARLY DEPOSIT GOLD STREAM
Early
Deposit Gold Stream Terms
In exchange for a US$12 million payment,
US$4 million of which is payable in six months (the “Advance Payment”), Sandstorm has entered into an Early
Deposit Gold Stream agreement on the Agua Rica project, a large 1,400 million tonne, copper-molybdenum-gold porphyry deposit. At
the time when 25% of the construction of Agua Rica has been completed, Sandstorm may elect to make an additional advance payment
in an amount between US$135 million and US$225 million based on the following formula: US$150,000 multiplied by the price of gold
plus US$7.5 million (the “Additional Advance Payment”). If Sandstorm elects to pay the Additional Advance Payment,
the Company will have the right to purchase an amount of gold equal to 20% of the life of mine gold produced from Agua Rica. Sandstorm
would make ongoing payments for each ounce of gold received, equal to 30% of the spot price per ounce of gold.
If Sandstorm elects not to pay the Additional
Advance Payment, the Advance Payment will convert into a 0.25% net smelter returns royalty on Agua Rica and all other rights under
the Early Deposit Gold Stream agreement will terminate. In addition, in the event that Sandstorm wishes to syndicate the gold stream
to a third party, it has the right to transfer any and all of its rights and obligations, under certain conditions.
About
the Agua Rica Project
Agua Rica is a porphyry copper, molybdenum,
gold and silver deposit located in the province of Catamarca, Argentina. In March 2015, Yamana signed a Definitive Agreement with
the provincial Government of Catamarca, Argentina, represented by the provincial mining company Catamarca Mineria y Energetica
Sociedad del Estado (“CAMYEN”). The agreement advances the Memorandum of Understanding between CAMYEN and Yamana,
which set the groundwork for cooperation to consolidate important mining projects and prospective properties in the province, creating
the Catamarca mining district.
RESERVES AND RESOURCES
Proven and Probable
Mineral Reserves
The following table sets forth the mineral
reserve estimates for Chapada as at December 31, 2014.
| |
Proven Mineral Reserves |
Probable Mineral Reserves |
Total Proven & Probable |
| Chapada |
Tonnes (000’s) |
Grade (g/t) |
Contained oz. (000’s) |
Tonnes (000’s) |
Grade (g/t) |
Contained oz. (000’s) |
Tonnes (000’s) |
Grade (g/t) |
Contained oz. (000’s) |
| Gold |
167,490 |
0.22 |
1,163 |
341,656 |
0.26 |
2,870 |
509,147 |
0.25 |
4,033 |
| |
| |
Tonnes (000’s) |
Grade (%) |
Contained lbs. (mm) |
Tonnes (000’s) |
Grade (%) |
Contained lbs. (mm) |
Tonnes (000’s) |
Grade (%) |
Contained lbs (mm) |
| Copper |
167,490 |
0.27 |
998 |
282,786 |
0.29 |
1,796 |
450,277 |
0.28 |
2,794 |
Measured, Indicated
and Inferred Mineral Resources
The following table sets forth the mineral
resource estimates for Chapada as at December 31, 2014.
| |
Measured Mineral Resources |
Indicated Mineral Resources |
Total Measured & Indicated |
Inferred Mineral Resources |
| Chapada |
Tonnes (000’s) |
Grade (g/t) |
Contained oz (000’s) |
Tonnes (000’s) |
Grade (g/t) |
Contained oz. (000’s) |
Tonnes (000’s) |
Grade (g/t) |
Contained oz. (000’s) |
Tonnes (000’s) |
Grade (g/t) |
Contained oz. (000’s) |
| Gold |
18,669 |
0.24 |
146 |
228,443 |
0.27 |
1,984 |
247,113 |
0.27 |
2,130 |
79,783 |
0.25 |
648 |
| Silver |
- |
- |
- |
82,161 |
1.4 |
3,775 |
82,161 |
1.4 |
3,775 |
27,553 |
1.1 |
982 |
| |
| |
Tonnes (000’s) |
Grade (%) |
Contained lbs. (mm) |
Tonnes (000’s) |
Grade (%) |
Contained lbs. (mm) |
Tonnes (000’s) |
Grade (%) |
Contained lbs. (mm) |
Tonnes (000’s) |
Grade (%) |
Contained lbs. (mm) |
| Copper |
11,387 |
0.20 |
50 |
146,282 |
0.25 |
818 |
157,669 |
0.25 |
867 |
52,230 |
0.29 |
332 |
Notes:
| 1. | Metal Prices and Cut-off Grades: |
Mineral Reserves:
$1,150 Au, $3.00 Cu, $4.55 average cut-off, $1,150 Au, $3.00 Cu and $4.84 average cut-off. $900 Au; 0.2 g/t Au cut-off for oxide
ore and 0.3 g/t Au cut-off for sulphide ore in Suruca Gold Project. Mineral Resources: $1,500 Au, $3.50 Cu and $4.81 NSR
cut-off out of pit for Chapada Mine (Main Pit, Corpo Sul and Corpo NE). 0.2 g/t Au cut-off for oxide and 0.3 g/t Au cut-off for
sulphide in Suruca Gold Project.
| 2. | All Mineral Reserves and Mineral Resources have been calculated in accordance with the CIM Standards
and NI 43-101. |
| 3. | All Mineral Resources are reported exclusive of Mineral Reserves. |
| 4. | Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. |
| 5. | Mineral Reserves and Mineral Resources are reported as of December 31, 2014. |
Mr. William Wulftange is Yamana’s
Senior Vice President, Exploration and a Qualified Person as defined by Canadian National Instrument 43-101. Mr. Wulftange reviewed
and approved all of the technical information in this material change report (excerpted from the press release dated October 27,
2015).
TRANSACTION FINANCING
To fund the Transaction, Sandstorm received
a US$10 million extension to its US$100 million credit facility (the “Revolving Loan”) and has fully drawn on
the US$110 million in available credit under the Revolving Loan. In addition, Sandstorm paid US$38 million from the Company’s
cash balance.
Scotiabank and Paradigm Capital Inc. acted
as financial advisors to Sandstorm in connection with the Transaction.
| Item 6 |
|
Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
| Item 7 |
|
Omitted Information |
Not applicable.
For further information contact Erfan Kazemi
at (604) 689-0234.
DATED as of this 6th day of November, 2015.
| |
Sandstorm Gold Ltd. |
|
| |
|
|
| |
By: |
“Erfan
Kazemi” |
|
| |
|
Erfan Kazemi |
|
| |
|
Chief Financial Officer |
|
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