Re
Title: Sandstorm Resources Acquires Gold Stream
from Brigus Gold's Black Fox Mine
Announcement Highlights:
- Sandstorm has entered into a
gold purchase agreement with Brigus Gold Corp. on its Black Fox gold mine
in Ontario
- Sandstorm to purchase 12% of
the life of mine gold production
- Sandstorm will make an upfront
payment of US$56.3 million with cash on hand
- Sandstorm will pay US$500 per
ounce as an ongoing payment
- The Black Fox mine is currently
in production and Sandstorm expects to receive delivery of gold beginning
in January 2011
Vancouver, British Columbia, November 9, 2010 -- Sandstorm Resources Ltd.
("Sandstorm") (TSX-V: SSL) is pleased to announce that it has entered
into a gold purchase agreement with Brigus Gold Corp. ("Brigus")
(TSX: BRD).
Sandstorm has agreed to purchase 12% of the life of mine gold produced from
Brigus' Black Fox mine, located in Ontario, Canada (the "Black Fox
Mine") for US$56.3 million as an upfront payment plus ongoing per ounce
payments equal to the lesser of US$500 (subject to an inflationary adjustment
beginning in 2013, not to exceed 2% per annum)(the "Per Ounce
Payments") and the then prevailing market price per ounce of gold. Brigus
will have the option, for a period of 24 months, to repurchase 50% of the gold
purchase agreement by making a US$36.6 million payment to Sandstorm, upon
receipt of which, the percentage of gold Sandstorm is entitled to purchase
shall be decreased from 12% to 6%. Also, for no additional upfront
consideration, Sandstorm will have the right to purchase, by remitting the Per
Ounce Payments, 10% (decreasing to 4.5% if the full repurchase option is
exercised within 24 months) of the gold produced from an area defined as the
Black Fox Extension, covering a portion of Brigus' Pike River property.
About The Black Fox Mine
The Black Fox Mine is located outside of Matheson, Ontario, Canada in the
Timmins Gold District and has been in commercial production since May 2009. It
is currently operating as an open pit mine, but since mid 2010, began
development of an underground mine which it expects to begin production in
early 2011. At this time, both open pit and underground operations are expected
to run concurrently. Ore is trucked to the Black Fox mill, which is a 2,000
tonne per day mill and tailings facility located east of the mine. Brigus has been
operating the asset with improving production rates and reducing cash costs
quarter over quarter since the beginning of commercial production. In the third
quarter of 2010, the Black Fox Mine produced in excess of 21,000 ounces of
gold, and production is continuing to ramp up.
The Black Fox mineralization is an Archean age, lode gold deposit located
within the Abitibi greenstone belt along with several other producing gold
mines and gold camps. Exploration is ongoing with a drill program being pursued
at the mine.
"This is a very significant and transformative deal for Sandstorm,"
stated Nolan Watson, President and Chief Executive Officer of Sandstorm
Resources, "the Black Fox mine is expected to provide us with cash flow
from gold sales immediately and is also a project that has fantastic growth
prospects on the exploration front. Brigus has assembled an excellent operating
team and seems to be in a position to grow the project effectively."
ABOUT SANDSTORM RESOURCES
Sandstorm Resources Ltd. is a growth focused resource based company that seeks
to complete transactions with companies that have advanced stage development
projects or operating mines. By making upfront payments to its partners,
Sandstorm receives gold purchase agreements (i.e. metal stream deals).
Sandstorm helps other companies in the resource industry grow their businesses,
while acquiring attractive assets in the process.
Sandstorm is focused on low cost operations with excellent exploration
potential and strong management teams. Sandstorm has completed gold purchase
agreements with Luna Gold Corp., SilverCrest Mines Inc., Santa Fe Gold
Corporation, Rambler Metals and Mining plc and Brigus Gold Corp. For more
information visit: http://www.sandstormresources.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 "Risk Factors" in
Sandstorm's annual information form for the financial year ended December 31,
2009. 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 is a precious metals
company. Sandstorm does not provide any representation as to its comparability
with other companies in its industry including, but not limited to, Gold
Wheaton Gold Corp., Silver Wheaton Corp., Royal Gold, Inc., and Franco-Nevada
Corporation.
Contact Information:
Sandstorm President & CEO
Nolan Watson
(604) 689-0234
Investor Relations Contact
Denver Harris
(604) 689-0234
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.
Copyright �
2010 SANDSTORM RESOURCES LTD. (SSL) All rights reserved. For more information
visit our website at http://www.sandstormresources.com/ or send email to info@sandstormresources.com ..
Message sent on Tue Nov 9, 2010 at 7:57:41 AM Pacific
Time