VANCOUVER, BC, May 26, 2022
/PRNewswire/ - Sandstorm Gold Ltd. ("Sandstorm Gold Royalties" or
"Sandstorm") (NYSE: SAND) (TSX: SSL) and Equinox Gold Corp.
("Equinox Gold") (TSX: EQX, NYSE American: EQX) are pleased to
announce the creation of Sandbox Royalties Corp. ("Sandbox
Royalties" or "Sandbox"), a new diversified metals royalty company.
Equinox Gold and Sandstorm have each entered into definitive
purchase and sale agreements (the "Definitive Agreements") with
Rosedale Resources Ltd. ("Rosedale") whereby Rosedale will acquire a portfolio of royalties
from Equinox Gold for consideration of $28.4
million in common shares of Rosedale and from Sandstorm for
consideration of $65 million
comprising $32.1 million in common
shares of Rosedale and $32.9 million
in a promissory note convertible into common shares of Rosedale
(collectively, the "Transaction"). Upon closing, Rosedale intends to change its corporate name
to Sandbox Royalties Corp. In this press release, Rosedale is used to refer to the company
before closing and Sandbox is used to refer to the company after
closing. All dollar figures are in US dollars unless otherwise
stated.
SANDBOX HIGHLIGHTS
- A new, well-funded and diversified metals royalty
company: Sandbox will have exposure to a range of resource
royalties including gold, silver, copper, zinc, graphite and
uranium, immediate cash flow from producing royalties, a strong
treasury and significant leverage to strengthening metal prices and
resource growth.
- Top mining jurisdictions: Sandbox's royalty portfolio
assets are primarily located in mining-friendly jurisdictions in
the Americas and Europe.
- Experienced management: Sandbox will be led by
Greg Smith as President and Chief
Executive Officer, Marcel de Groot
as Chair of the board, Victoria
McMillan as Chief Financial Officer, and Craig Rollins as General Counsel.
- Supportive shareholders: Sandstorm and Equinox
Gold will hold a 34% and 30% basic interest, respectively, in
Sandbox, providing the opportunity to participate in and facilitate
future growth of Sandbox.
Nolan Watson, President & CEO
of Sandstorm, commented: "Over the last several months, Sandstorm
has been actively working on finding unique and strategic ways to
unlock value for our shareholders. With the creation of Sandbox, a
diversified royalty company, we are taking royalties that don't
currently receive their warranted value within Sandstorm's existing
portfolio and surfacing their value so that our shareholders can
benefit now. Sandbox Royalties will join our growing list of
strategic partners, with which we can team up on future
transactions and garner the most value across a broad spectrum of
royalties in terms of size and metal type."
Christian Milau, CEO of Equinox
Gold, commented: "Equinox Gold has surfaced tremendous value as a
significant and supportive shareholder of Solaris Resources and
i-80 Gold, our previous spin-out companies, and intends to continue
that track record with Sandbox Royalties. Greg Smith will be an exceptional leader for
Sandbox Royalties. His industry knowledge and corporate development
skills have been integral to Equinox Gold's growth and success over
the last five years. Greg will continue to represent Equinox Gold
on the boards of Solaris Resources and i-80 Gold and will
transition from President of Equinox Gold to assume the new role of
President and CEO of Sandbox Royalties. We look forward to working
closely with him as a supportive partner in this new venture."
Ross Beaty, Chairman of Equinox
Gold, commented: "Sandbox Royalties will create immediate and
future value for Equinox Gold from our portfolio of royalties and
will continue our close relationship with Sandstorm. Greg Smith will focus on building Sandbox
Royalties while Equinox Gold slows its M&A activities to focus
on developing our peer-leading internal growth pipeline including
our new Santa Luz gold mine in
Brazil, which is ramping up to
commercial production, our large expansion projects at Los Filos,
Aurizona and Castle Mountain, and our major in-construction gold
mine at Greenstone."
SANDBOX PORTFOLIO
On closing of the Transaction, Sandbox will hold a portfolio of
23 metals royalties across a range of assets and jurisdictions,
including the existing royalties held by Rosedale. The royalties acquired from
Sandstorm and Equinox Gold will contribute meaningful portfolio
diversification through several producing and development stage
assets.
Sandstorm Portfolio
Royalties to be acquired from Sandstorm (the "Sandstorm
Portfolio") include:
- Hackett River: 2.0% net smelter return ("NSR") royalty
on the Hackett River silver-zinc-copper development project in
Nunavut, Canada owned by Glencore
plc;
- Prairie Creek: 1.2% NSR royalty on the Prairie Creek
zinc-silver-lead development project in the Northwest Territories, Canada owned by NorZinc
Ltd.;
- Vittangi: 1.0% NSR royalty on the Vittangi graphite
development project in Sweden
owned by Talga Group Ltd.;
- Mason: 0.4% NSR royalty on the Mason copper-gold
development project in Nevada, USA
owned by Hudbay Minerals Inc.; and
- Converse: 1.0% NSR royalty on the Converse gold
development project in Nevada, USA
owned by Waterton Global Resource Management LP.
The Sandstorm Portfolio also includes 1.0% NSR royalties on a
portion of the Ajax copper-gold
project in British Columbia, the
Buffelsfontein gold project in South
Africa and the Cuiu Cuiu gold project in Brazil, and a 2.0% NSR royalty on the Wiluna
uranium project in Australia.
Equinox Gold Portfolio
Royalties to be acquired from Equinox Gold (the "Equinox Gold
Portfolio") include:
- Mercedes: 2.0% NSR royalty on the producing Mercedes
gold mine in Sonora, Mexico owned
by Bear Creek Mining Corporation;
- Pilar: 1.0% NSR royalty on the producing Pilar gold mine
in Goiás, Brazil owned by Pilar
Gold Inc.; and
- Cuiu Cuiu: 0.5% NSR royalty on the Cuiu Cuiu gold
project in Pará, Brazil owned by
Cabral Gold Inc.
In addition, the Equinox Gold Portfolio includes a note
receivable from Gold Mountain Mining Corp. with a face value of
C$3 million due in full in
May 2023, and C$3 million in cash.
TRANSACTION DETAILS
Under the terms of the Definitive Agreements, Rosedale will acquire (a) the Sandstorm
Portfolio for $65 million comprising
58.9 million common shares of Rosedale at a price of C$0.70 per share and a $32.9 million 10-year secured convertible
promissory note, and (b) the Equinox Gold Portfolio for
$28.4 million payable in 51.9 million
common shares of Rosedale at a price of C$0.70 per share.
Post-completion of the Transaction, Sandbox intends to seek a
public listing on a Canadian stock exchange. Listing of Sandbox is
subject to approval of the applicable stock exchange. There is no
guarantee that Sandbox will receive approval for such listing.
In connection with the Transaction, Rosedale will undertake a non-brokered private
placement financing of common shares of Rosedale at C$0.70 per share for minimum gross proceeds of
C$5 million (the "Financing") with
such Financing expected to close concurrently with the Transaction.
Proceeds from the Financing will be used for the acquisition of
additional royalties and streams and for general corporate
purposes.
Before considering the Financing, on closing of the Transaction,
Sandbox will have 173.1 million shares outstanding with Sandstorm
holding a 34% basic interest in Sandbox and Equinox Gold holding a
30% basic interest in Sandbox. Each of Sandstorm and Equinox Gold
will enter into an investor rights agreement with Sandbox providing
for, among other things, customary anti-dilution provisions and
board representation rights.
The Transaction and the Financing are expected to be completed
by the end of June 2022 or such other
date as the parties may agree, and closing will be subject to
customary approvals and closing conditions.
ABOUT SANDSTORM GOLD ROYALTIES
Sandstorm is a gold royalty company that 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. After the closing of the
transactions announced on May 2,
2022, Sandstorm will have acquired a portfolio of more than
250 royalties, of which 39 of the underlying mines are producing.
Sandstorm plans to grow and diversify its low cost production
profile through the acquisition of additional gold royalties. For
more information visit: www.sandstormgold.com.
ABOUT EQUINOX GOLD
Equinox Gold is a Canadian mining company operating entirely in
the Americas, with six operating gold mines, a mine in
commissioning, and a clear path to achieve more than one million
ounces of annual gold production from a pipeline of development and
expansion projects. Equinox Gold's common shares are listed on the
TSX and the NYSE American under the trading symbol EQX. Further
information about Equinox Gold's portfolio of assets and long-term
growth strategy is available at www.equinoxgold.com or by
email at ir@equinoxgold.com.
EQUINOX GOLD CONTACTS
Christian Milau, Chief Executive
Officer
Rhylin Bailie, Vice President
Investor Relations
Tel: +1 604-558-0560
Email: ir@equinoxgold.com
ABOUT ROSEDALE
RESOURCES
Rosedale Resources is a private Canadian metals royalty company
holding a diverse portfolio of 11 exploration and development stage
royalties on assets in Peru,
Africa and Asia, a portfolio of public company shares in
exploration-stage Canadian mining companies and a treasury of
CAD$7.4 million.
CAUTIONARY STATEMENTS TO U.S. SECURITYHOLDERS
The financial information included or incorporated by reference
in this press release or the documents referenced herein has been
prepared in accordance with International Financial Reporting
Standards as issued by the International Accounting Standards
Board, which differs from US generally accepted accounting
principles ("US GAAP") in certain material respects, and thus are
not directly comparable to financial statements prepared in
accordance with US GAAP.
This press release and the documents incorporated by reference
herein, as applicable, have been prepared in accordance with
Canadian standards for the reporting of mineral resource and
mineral reserve estimates, which differ from the previous and
current standards of the United
States securities laws. In particular, and without limiting
the generality of the foregoing, the terms "mineral reserve",
"proven mineral reserve", "probable mineral reserve", "inferred
mineral resources,", "indicated mineral resources," "measured
mineral resources" and "mineral resources" used or referenced
herein and the documents incorporated by reference herein, as
applicable, are Canadian mineral disclosure terms as defined in
accordance with Canadian National Instrument 43-101 — Standards of
Disclosure for Mineral Projects ("NI 43-101") and the Canadian
Institute of Mining, Metallurgy and Petroleum (the "CIM") — CIM
Definition Standards on Mineral Resources and Mineral Reserves,
adopted by the CIM Council, as amended (the "CIM Definition
Standards").
For United States reporting
purposes, the United States Securities and Exchange Commission (the
"SEC") has adopted amendments to its disclosure rules (the "SEC
Modernization Rules") to modernize the mining property disclosure
requirements for issuers whose securities are registered with the
SEC under the Exchange Act, which became effective February 25, 2019. The SEC Modernization Rules
more closely align the SEC's disclosure requirements and policies
for mining properties with current industry and global regulatory
practices and standards, including NI 43-101, and replace the
historical property disclosure requirements for mining registrants
that were included in SEC Industry Guide 7. Issuers were required
to comply with the SEC Modernization Rules in their first fiscal
year beginning on or after January 1,
2021. As a foreign private issuer that is eligible to file
reports with the SEC pursuant to the multi-jurisdictional
disclosure system, the Corporation is not required to provide
disclosure on its mineral properties under the SEC Modernization
Rules and will continue to provide disclosure under NI 43-101 and
the CIM Definition Standards. Accordingly, mineral reserve and
mineral resource information contained or incorporated by reference
herein may not be comparable to similar information disclosed by
United States companies subject to
the United States federal
securities laws and the rules and regulations thereunder.
As a result of the adoption of the SEC Modernization Rules, the
SEC now recognizes estimates of "measured mineral resources",
"indicated mineral resources" and "inferred mineral resources." In
addition, the SEC has amended its definitions of "proven mineral
reserves" and "probable mineral reserves" to be "substantially
similar" to the corresponding CIM Definition Standards that are
required under NI 43-101. While the SEC will now recognize
"measured mineral resources", "indicated mineral resources" and
"inferred mineral resources", U.S. investors should not assume that
all or any part of the mineralization in these categories will be
converted into a higher category of mineral resources or into
mineral reserves without further work and analysis. Mineralization
described using these terms has a greater amount of uncertainty as
to its existence and feasibility than mineralization that has been
characterized as reserves. Accordingly, U.S. investors are
cautioned not to assume that all or any measured mineral resources,
indicated mineral resources, or inferred mineral resources that the
Company reports are or will be economically or legally mineable
without further work and analysis. Further, "inferred mineral
resources" have a greater amount of uncertainty and as to whether
they can be mined legally or economically. Therefore, U.S.
investors are also cautioned not to assume that all or any part of
inferred mineral resources will be upgraded to a higher category
without further work and analysis. Under Canadian securities laws,
estimates of "inferred mineral resources" may not form the basis of
feasibility or pre-feasibility studies, except in rare cases. While
the above terms are "substantially similar" to CIM Definitions,
there are differences in the definitions under the SEC
Modernization Rules and the CIM Definition Standards. Accordingly,
there is no assurance any mineral reserves or mineral resources
that the Company may report as "proven mineral reserves", "probable
mineral reserves", "measured mineral resources", "indicated mineral
resources" and "inferred mineral resources" under NI 43-101 would
be the same had the Company prepared the reserve or resource
estimates under the standards adopted under the SEC Modernization
Rules or under the prior standards of SEC Industry Guide 7.
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, concerning the
business, operations and financial performance and condition of
Sandstorm Gold Royalties. Forward-looking statements include, but
are not limited to, the expectations of Equinox Gold and Sandstorm
regarding the completion of the Transaction, the ability of Equinox
Gold and Sandstorm to work productively with each other and
Sandbox; the successful completion of the Financing; the ability of
Sandbox to obtain listing approval; and the respective abilities of
Equinox Gold and Sandstorm to realize a benefit from their
investments in Sandbox. 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
Gold Royalties 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 Gold Royalties will operate in
the future, including the receipt of all required approvals, the
price of gold and copper 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, failure to receive necessary
approvals, changes in business plans and strategies, market
conditions, share price, best use of available cash, gold and other
commodity 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 or other commodity
the Company 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
the Company 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 the
Company will purchase gold, other commodities or receive royalties
from, 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 and
other commodities, 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 the
Company's annual report for the financial year ended December 31, 2021 and the section entitled "Risk
Factors" contained in the Company's annual information form dated
March 31, 2022 available at
www.sedar.com. Although the Company 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. The Company does not
undertake to update any forward-looking statements that are
contained or incorporated by reference, except in accordance with
applicable securities laws.
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SOURCE Sandstorm Gold Ltd.