Sandstorm Metals & Energy Ltd. ("Sandstorm" or "the Company")
(TSX VENTURE:SND) announces the release of its results for the
fourth quarter and the year ended December 31, 2011 (all figures in
U.S. dollars).
Fourth Quarter Summary (3 Months)
Sandstorm recorded a $13.1 million net loss for the three months
ended December 31, 2011, attributable to a number of factors
including:
-- A non-cash impairment charge of $14.6 million relating to the assets of
Royal Coal Inc. ("Royal Coal").
-- An increase of $0.5 million in administration expenses primarily driven
by an increase in the Company's professional fees and corporate
expenses.
-- The loss was partially offset by $2.7 million of income, representing
the amount owing on the 2011 Novadx Ventures Corp. ("Novadx") commodity
stream cash flow guarantee.
"Royal Coal represents approximately 10% of our capital base,
but has been a disproportionately large portion of our recent news
flow," stated Nolan Watson, President & CEO. "Sandstorm
management made the decision to write-down Royal Coal's assets and
take a loss for 2011, thus allowing our shareholders to focus on
the many positives ahead for our young company. We intend to
complete additional commodity streaming deals in 2012 that will
strengthen and further diversify our asset base and with $40
million in cash on hand and $80 million in minimum cash flow
guarantees, we are well positioned in the current market."
2011 Summary (12 Months)
-- Entered into an energy streaming agreement with Terrex Energy Inc.
("Terrex") to purchase 25% of all oil and natural gas for the life of
the Two Creek Jurassic A property and for five years of the Two Creek
Jurassic B property and 15% of all oil and natural gas for the life of
the Strathmore property.
-- Entered into a copper streaming agreement with Donner Metals Ltd.
("Donner") to purchase 17.5% of all copper for the life of mine at the
Bracemac-McLeod property.
-- Entered into an energy streaming agreement with Thunderbird Energy Corp.
("Thunderbird") to purchase 35% of all natural gas for the life of the
Gordon Creek property.
-- Sandstorm has minimum cash flow guarantees from its partners totaling
$80 million.
-- Completed an equity financing for gross proceeds of $51.4 million.
-- The Rosa Mine achieved commercial production and commenced shipments of
cleaned coal to customers in the coking coal and activated carbon
markets.
Operational Highlights
Producing Assets
Novadx's Rosa Mine is an auger and strip coal mining operation
located in Alabama, USA. Novadx has reached commercial production
at Rosa and is shipping cleaned coal to customers in the coking
coal and activated carbon markets.
Terrex has two oil and gas projects in Alberta, Canada. The Two
Creek property has 16 producing wells in two separate oil pools and
the Strathmore property has 10 producing wells in one main oil
pool. Production volumes are expected to increase materially with
the implementation of polymer floods at the Strathmore and Two
Creek properties in 2013.
Development Assets
Donner is the owner of a 35% joint venture interest in the
Bracemac-McLeod mine which is operated by Xstrata Canada
Corporation ("Xstrata"). Xstrata plans to utilize the existing
Matagami mill to produce concentrates of zinc and copper. The
Bracemac-McLeod mine will be an underground mine, accessed via a
ramp, and is expected to begin ore production in early 2013.
Underground drilling is scheduled to begin in the middle of 2012 to
expand resources and to bring additional deposits into the mine
plan.
Thunderbird's Gordon Creek property is located in Utah, USA.
Gordon Creek is comprised of roughly 7900 acres, four producing
wells, seven shut in wells and a 100% owned gas gathering and water
disposal system. Gordon Creek is located adjacent to and shares
geology with Utah's largest coal bed methane natural gas field
known as Drunkard's Wash. Thunderbird is contractually obligated to
workover 5 wells and drill an additional 50 wells by the end of
2013.
Novadx's Rex No. 1 Mine ("Rex") is a coal project located in
Tennessee, USA. Novadx recently assembled a continuous miner with a
beltline to transport mined coal to the surface. An on-site wash
plant is currently being permitted and is expected to be
constructed by the end of 2013.
Further details of the individual commodity streams can be found
within Management's Discussion and Analysis contained in the
Company's 2011 annual report and on the Company website.
Outlook
Sandstorm expects that revenue from coal and oil sales will
increase slightly during 2012. In 2013, copper production from the
Bracemac-McLeod mine, coal production from the Rex No. 1 Mine and
natural gas production from Gordon Creek is expected to lead to
material increases in cash flow and revenue.
Webcast and Conference Call Details
A conference call will be held on Friday, March 16, 2012
starting at 1:00 pm EST to further discuss the fourth quarter
results. To participate in the conference call use the following
dial-in numbers:
Local / International: 647-788-4916
North American Toll-Free: 877-214-4966
It is recommended that participants dial in five minutes prior
to the commencement of the conference call. Click here to access an
audio webcast of the conference call which will also be available
on the Sandstorm website.
ABOUT SANDSTORM METALS & ENERGY
Sandstorm Metals & Energy Ltd. is a growth focused resource
based company that seeks to complete commodity purchase agreements
with companies that have advanced stage development or operating
projects. A commodity purchase agreement involves Sandstorm making
an upfront cash payment to its partners and in exchange, Sandstorm
receives the right to purchase a percentage of the commodity
produced for the life of the asset, at a fixed price per unit.
Sandstorm helps other companies in the resource industry grow their
business, while acquiring attractive assets in the process.
Sandstorm Metals & Energy is focused on low cost operations
with excellent exploration potential and strong management teams.
Sandstorm has completed commodity purchase agreements with Novadx
Ventures Corp., Terrex Energy Inc., Donner Metals Ltd. and
Thunderbird Energy Corp.
For more information visit: http://www.sandstormltd.com.
Cautionary Note Regarding Forward-Looking Information
Except for the statements of historical fact contained herein,
the information presented constitutes "forward-looking information"
within the meaning of applicable Canadian securities legislation.
Forward-looking information is based on reasonable assumptions that
have been made by Sandstorm as at the date of such information and
is subject to known and unknown risks, uncertainties and other
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 the forward-looking information,
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; problems inherent to the marketability of minerals;
industry conditions, including fluctuations in the price of metals,
fluctuations in foreign exchange rates and fluctuations in interest
rates; stock market volatility; competition; 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. Although Sandstorm has attempted to identify important
factors that could cause actual results to differ materially from
those contained in forward-looking information, there may be other
factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such information will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such information.
Accordingly, readers should not place undue reliance on
forward-looking information. Sandstorm does not undertake to update
any forward-looking information that is contained or incorporated
by reference herein, except in accordance with applicable
securities laws. Sandstorm does not provide any representation as
to its comparability with other companies in its industry
including, but not limited to, Silver Wheaton Corp., Royal Gold,
Inc., and Franco-Nevada Corporation.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Sandstorm Metals & Energy Ltd. Erfan Kazemi Chief
Financial Officer (604) 628-0234 Sandstorm Metals & Energy Ltd.
Denver Harris Investor Relations Contact (604) 628-1178
www.sandstormltd.com