VANCOUVER, Mar. 1, 2016 /CNW/ - Sandstorm Gold Ltd.
("Sandstorm" or the "Company") (NYSE MKT: SAND, TSX: SSL) has
amended its metal credit purchase agreement with Entrée Gold Inc.
("Entrée"). In exchange for US$5.5
million in cash and 5.1 million common shares in the capital
of Entrée (the "Consideration"), Sandstorm has agreed to reduce, by
17%, the amount of metal credits that the Company is contracted to
purchase under the metal credit purchase agreement. The
Consideration received by Sandstorm represents 17% of the value of
the original metal credit purchase agreement completed with Entrée
in 2013.
Under the amended agreement, Sandstorm has the right to purchase
metal credits from Entrée equivalent to 5.62% and 4.26% of the gold
and silver by-products produced from the Hugo North Extension and
Heruga deposits in Mongolia,
respectively, and 0.42% of the copper produced from the
deposits.
The original metal credit purchase agreement between Sandstorm
and Entrée contemplated certain events that would require Entrée to
repay a portion of Sandstorm's upfront deposit. The newly amended
agreement maintains these same contractual protections for the
benefit of Sandstorm should one of these events occur in the
future, but the amendment provides flexibility in terms of how
Entrée will refund up to an additional 17% of the refundable
deposit if necessary.
The US$5.5 million in proceeds
from this amendment will be used to repay amounts owing on the
Company's revolving debt facility.
FROOME ZONE CONTINUES TO GROW AND DEMONSTRATES SIGNIFICANT
CONTINUITY OF MINERALIZATION
After receiving positive exploration results in 2015, Primero
Mining Corp. ("Primero") has aggressively targeted the Froome zone,
located approximately 800 metres west of the Black Fox mine. This
area continues to demonstrate significant gold mineralization over
wide widths. Highlights from recent drilling at the Froome zone
include 5.0 g/t gold over 42.9 metres true width (15PR-G011), 4.6
g/t gold over 35.3 metres true width (15PR-G031) and 6.0 g/t gold
over 25.6 metres true width (15PR-G048). Additionally, Primero
recently completed a drill hole to test the down plunge extent and
continuity of mineralization, which featured notable intercepts of
6.1 g/t gold over 44.1 metres, 7.2 g/t gold over 14.7 metres, and
7.7 g/t gold over 102.6 metres (15PR-G016).
Recent drilling continues to confirm Primero's exploration
thesis that the long intercepts of significant gold grades found at
the Froome zone represent a different style of gold mineralization
than seen at the nearby Black Fox deposit. Notably, the Froome zone
demonstrates gold mineralization with consistent grades and good
continuity which may make the zone amenable to bulk underground
mining techniques. The Froome zone has been delineated from the
bedrock surface, located 18 metres below the ground surface level,
to approximately 260 metres below surface, and continues to remain
open to the east, west and at depth.
Froome is a priority for surface exploration at Black Fox in
2016. Primero expects to complete approximately 25,000 metres
of drilling by May 2016 in order to
define and delineate the Froome deposit, and will evaluate the
deposit as a medium term alternative to complement Black Fox ore in
order to fill the mill beyond the end of 2017. An initial
resource estimate for the Froome zone based on the results of all
drilling received to-date is expected to be included with Primero's
year-end reserves and resources update in early March 2016.
For more information and complete drill results, visit the
Primero website at
http://www.primeromining.com/English/investors/news/default.aspx
and see the press release dated February 29,
2016.
Sandstorm has a gold stream agreement to purchase 8% of the gold
produced from the Black Fox mine at $524 per ounce. The gold stream applies to an
area of interest that includes the recently discovered Froome
zone.
SANDSTORM COUNTERPARTIES BEING ACQUIRED
Recently, a number of mineral properties underlying Sandstorm's
streams and royalties have been acquired by larger, better
capitalized organizations. The most recent examples include Lake
Shore Gold Corp.'s ("Lake Shore") announced business combination
with Tahoe Resources Inc. (see Lake Shore press release dated
February 8, 2016) and the announced
acquisition of Magellan Minerals Ltd. ("Magellan") by Anfield
Nickel Corp. (see Magellan press release dated February 16, 2016). Sandstorm holds a 1.0% net
smelter returns ("NSR") royalty on the entirety of Lake Shore's
Thunder Creek and 144 deposits, and has a 2.5% NSR on Magellan's
Coringa property and a 1.0% NSR on the Cuiu Cuiu project. Other
projects underlying Sandstorm streams and royalties that were
acquired during the last twelve months include:
Project
Name
|
Former
Owner
|
Present
Owner
|
Sandstorm
Interest
|
Santa
Elena
|
SilverCrest Mines
Inc.
|
First Majestic Silver
Corp.
|
20% of gold @
$357/ounce
|
Mt.
Hamilton
|
Solitario Exploration
& Royalty Corp.
|
Waterton Global
Resources Management
|
2.4% NSR
|
East
My-Ritt
|
Mega Precious Metals
Inc.
|
Yamana Gold
Inc.
|
0.5% NSR
|
Windfall
Lake
|
Eagle Hill
Exploration Corp.
|
Oban
Mining
|
0.5%-1.0%
NSR
|
Buffelsfontein
|
Village Main Reef
Ltd.
|
Heaven-Sent Capital
Management Group Co. Ltd.
|
1.0% NSR
|
QUALIFIED PERSON, QA/QC
Keith Laskowski (MSc),
Sandstorm's Vice President, Technical Services is a Qualified
Professional (#01221QP) of the Mining and Metallurgical Society of
America and a Qualified Person as defined by Canadian National
Instrument 43-101. He has reviewed and approved the technical
information in this press release.
Black Fox complex drilling was conducted by Norex Drilling
supervised by Primero's exploration team. Mr. David Laudrum, P.Geo., is the Qualified Person
for Primero. All samples are 1/2 core and analyses reported herein
were performed by the independent laboratories Polymet Labs which
is ISO 9001:2000 certified, AGAT Laboratories of Mississauga, Ontario, which is ISO
9001/IEC17025 certified, Accurassay Laboratories, which is ISO/IEC
17025 certified, ALS Laboratories, which is ISO 9001/IEC17025
certified, SGS Canada Laboratories, which is ISO9001/IEC17025
certified, Swastika Laboratories, which is ISO 17025 certified.
Intercepts cited do not necessarily represent true widths, however,
with the exception of hole 15PR-G016 which specifically targeted
the down plunge extent of Froome zone, drilling is generally
intersecting interpreted mineralized zones at a high angle.
Primero's quality control program includes systematic insertion of
blanks, standard reference material and duplicates to ensure
laboratory accuracy.
ABOUT SANDSTORM GOLD
Sandstorm Gold Ltd. is a gold streaming and royalty company.
Sandstorm provides upfront financing to gold mining companies that
are looking for capital and in return, receives the right to a
percentage of the gold produced from a mine, for the life of the
mine. Sandstorm has acquired a portfolio of 132 streams and
royalties, of which 19 of the underlying mines are producing.
Sandstorm plans to grow and diversify its low cost production
profile through the acquisition of additional gold streams and
royalties.
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. 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,
2014 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.